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Timothy Noah: Why the Rich Are Getting Richer and the Middle Class Is Disappearing

In his new book "The Great Divergence," Noah digs into the causes of America's rapidly increasing inequality. In this interview, he talks to AlterNet about what he found.

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SJ: When we start outsourcing economists?

TN: Right. (Laughs) In fact, Dean Baker is the person I quote making this point and I think it’s an interesting one.

SJ: You talk about the point he makes, that we could allow immigration in certain high-skill fields, and that would have an effect on income inequality.

TN: Yes, and that’s an interesting point of agreement between Dean Baker and Alan Greenspan. I think it’s the one idea in my solutions chapter that will probably be embraced more wholeheartedly by Republicans than by Democrats, because business has been pushing for more of these kind of H-1B visas over the years. I think there is an argument to be made for them based on equality.

SJ: Although in certain high skilled fields we are already seeing problems because of money. We have a primary care doctor shortage because medical students are going into specialties because they can’t afford to pay off their student debt as a primary care doctor – specialists make more money. So if we started allowing doctors to come into the country then we’re really going to have a problem with the wages going down in fields that are really expensive to become qualified for.

TN: Well, that speaks to a whole other issue, which is the rising cost of education. I don’t think you can fix that by fine-tuning a student loan program. I think you can only fix it by limiting the amount of debt that gets taken on in the first place and that means you have to limit tuition increases.

SJ: You have another long thoughtful chapter on the college wage premium. But as student debt keeps going up, it’s going to start eating into that college premium, especially for people like me who had liberal arts degrees that don’t tend to have a great wage boost when you get out of school.

TN: Right, but the cost of not going to college is so great that it would take a lot to reverse that premium. The college premium is no longer growing, but it has given way to the grad school premium. The reason that tuition has gone up so much is the “because they can” argument that I quote. College tuition has to be really, really high to make it not worthwhile to anybody. What’s happening now is it remains worthwhile to a big segment of the population – it’s increasingly not even affordable or achievable to people at the lower end of the income scale.

SJ: It’s less that the college premium has gone up and more that we just don’t have the sort of union jobs that we used to have, the middle class job that you could do with a high school diploma and raise your family on. It increasingly doesn’t exist and so you have to go to college just to get a decent job.

TN: A lot of people think you shouldn’t talk about the education part of the Great Divergence because it somehow plays into the hands of conservatives who want to blame everything on the state of our education system. Conservatives don’t mind beating up on colleges for jacking up tuition because they don’t really like colleges in the first place.

That’s only half of the story. The other half of the story is the decline of labor because that has been an alternative path to a middle class income.

SJ: More people got a middle class manufacturing job than had gone to college and gotten a white-collar job up until not that long ago.

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