I am not one to worry about income inequality. If someone earns millions or billions, that isn’t a “social problem.”
The reasons why there is increasing inequality (and it’s a matter of raging debate whether inequality is actually on the rise) are, however, a matter of interest and in today’s New York Times, George Mason University economics professor Tyler Cowen suggests that education has a good deal to do with it. His piece is here.
Cowen points to the gap between the earnings of people with college educations and those without them and says, “The problem isn’t so much capitalism as it is that American lower education does not prepare enough people to receive gains from American higher education.”
I couldn’t agree more that our K-12 system does a poor job on the whole, as evidenced by the National Assessment of Adult Literacy and other measures, but I’m not convinced that income distributions would change much even if our K-12 system worked as well as the education systems seem to in countries like Singapore. What I think Cowen has failed to consider is the impact of credential inflation that has progressively closed off more and more entry level jobs (few of which really demand much in the way of academic preparation) to kids who haven’t obtained college degrees.
As I’ve argued many times before, a college degree is neither a necessary nor a sufficient condition for earning a good income.
Cowen does say that merely ushering more people through college isn’t the answer — they have to be ready to learn. Yes, but the “learning” done by many college students is of scant benefit to their later productivity. If you think that increasing the years of formal education will do anything to reduce income differentials in the U.S., you’re going to be very disappointed.
