NCPA - National Center for Policy Analysis


November 22, 2006

Increasing levels of education may not be the economic cure all for reducing inequality and raising middle-class incomes, says Clive Crook in the Atlantic.

A progressive education system has always been at the cornerstone of political and economic thought for helping spur economic growth and lessen inequality, says Crook.  And at least on the surface it appears to be working:

  • In 2004, 67 percent of American high-school graduates went straight on to college.
  • In 1972, the number was just under half of 2004 levels.

But while this seems like progress, in reality, it hurts many Americans, says Crook.  Failing to go to college did not always mark people out as unfit for any kind of well-paid employment, as it often does now.  In fact, a college degree has become an expensive passport to good employment, but one that looks unaffordable to many poor families.

This cruel paradox may be one reason why parental incomes better predict children's incomes in the United States than they used to, in other words, one reason why America is becoming less meritocratic.  Consider:

  • During the 1990s, CEO salaries roughly doubled in inflation-adjusted terms.
  • Median pay actually went up more slowly than pay at the bottom of the earnings distribution.
  • Even pay at the 90th percentile (highly educated workers, mostly, but not CEOs) increased only a little faster than median wages.

To be sure, the country will always need highly trained specialists in an array of technical skills, in which the best place to learn will be universities.  However, for most, university education is not mainly for acquiring directly marketable skills that raise the nation's productivity, but rather for securing a higher ranking in the labor market, and for cultural and intellectual enrichment; both goods within their own right, but not silver bullets for reducing inequality or raising middle-class incomes, says Crook. 

Source: Clive Crook: "A Matter of Degrees," the Atlantic, November 2006.

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