The Disastrous Impact of Income Inequality on Education Policy

Our society continues to become increasingly segregated not only by race but also by income—with the rich living near each other in wealthy enclaves and the poor concentrated in intergenerational ghettos. Stanford University educational sociologist Sean Reardon documents that the proportion of families in major metropolitan areas living in either very poor or very affluent neighborhoods increased from 15 percent in 1970 to 33 percent by 2009, and the proportion of families living in middle income neighborhoods declined from 65 percent in 1970 to 42 percent in 2009. Reardon also demonstrates that along with growing residential inequality is a simultaneous jump in an "income-inequality school achievement gap" among children and adolescents. The achievement gap between students with income in the top ten percent and students with income in the bottom ten percent is 30-40 percent wider among children born in 2001 than those born in 1975, and is now twice as large as the black-white achievement gap.

This research shocked people when it was published in 2011 in the book, Whither Opportunity? Rising Inequality, Schools, and Children’s Life Chances. In it, Greg Duncan and Richard Murnane, the book’s editors, conclude:

“We need a national policy debate about the consequences of economic policies that have permitted the growth in family  income inequality…. Only if our country faces the consequences of growing income inequality will it be able to maintain its rich heritage of upward social mobility through educational opportunity.” (Whither Opportunity, p. 20)

As far as I can tell, we have not begun that national policy debate.

But [earlier this month], the Economic Policy Institute and the Economic Analysis and Research Network released a study that once again calls attention to the extent of growing income inequality -- not only nationally but across the states. In The Increasingly Unequal States of America, economists Estelle Sommeiller and Mark Price find that,

“After incomes at all levels declined as a result of the great Recession, income growth has been lopsided since the recovery began in 2009, with the top 1 percent capturing an alarming share of economic growth. University of California at Berkeley economist Emmanuel Saez estimates that between 2009 and 2012, the top 1 percent captured 95 percent of total income growth.”

More stunning is that in Delaware, Florida, Missouri, South Carolina, North Carolina, Connecticut, Washington, Louisiana, California, Virginia, Pennsylvania, Idaho, Massachusetts, Colorado, New York, Rhode Island, and Nevada, “all income growth between 2009 and 2012 accrued to the top 1 percent.”

In 22 other states, half or more of total income growth went to the top 1 percent: Alabama (98.9 percent), Illinois (97.2 percent), Texas (86.8 percent), Arkansas (83.7 percent), Michigan (82 percent), New Jersey (80.5 percent), Maryland (80.5 percent), Nebraska (74.9 percent), Kansas (74.4 percent), Ohio (71.9 percent), Wisconsin (69.6 percent), Oklahoma (69.2 percent), Tennessee (68.5 percent), Iowa (65 percent), Georgia 63.6 percent), New Hampshire (59.5 percent), Arizona (59 percent), Maine (58.3 percent), Oregon (57.3 percent), Utah 56.6 percent), Minnesota 56 percent, and South Dakota (53.4 percent).

In the top two states for inequality for 2012, New York and Connecticut, “the top 1 percent earned average incomes more than 48 times those of the bottom 99 percent.”

It is very hard to grasp the consequences of such numbers. Here is something to consider, however: public schools continue to serve approximately 90 percent of America’s children. As the Southern Education Foundation recently documented, 51 percent of the children served by public schools live in families below 185 percent of the federal poverty level of $23,850 for a family of four. Public schools are perhaps the quintessential institution of the 99 percent, but too often these days public policy is being made by elected officials in the state legislatures and in Congress who do not understand, personally, the challenges for public schools, teachers and students in the poorest communities. And the growing role of money in politics has expanded the reach of the 1 percent. Just last week, for example, we learned that the Koch brothers plan to invest $889 million—more than the projected expenditure of either major political party— in the 2016 Presidential and Congressional races.

In their new report on inequality across the states, economists Sommeiller and Price conclude,

“More than in most other advanced countries, in America the children of affluent parents grow up to be affluent, and the children of the poor remain poor… Can rising inequality be tolerated in a country that values so dearly the ideal that all people should have opportunity to succeed, regardless of the circumstances of their birth?”


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