The Growing Challenges of Inequality

December 12, 2011

Harvard University's Institute of Politics hosted a discussion earlier this month on inequality in America. The panel included RSF trustee (and Harvard economist) Lawrence Katz, as well as former trustee William Julius Wilson. You can watch the panel's discussion below, but here are some of the highlights from Katz's introduction to the issue (which starts about 8 minutes into the video):

• There is little doubt about inequality trends. "Any way you slice or dice data on income earnings or wealth," Katz said, "one has seen large increases in inequality over the last 30 years."

• The share of the national income going to the top 1 percent more than doubled from 1979 to the present, from 10 percent to 23.5 percent. "If, magically, we could have kept the share of income of the top 1 percent where it was in 1979 and redistributed all that income to the bottom 90 percent," Katz said, "everyone would have 9,000 more dollars, or about 27 percent higher income."

• There are also gaps growing within the bottom 99 percent. Education seems to the major driver of these trends. The college-high school wage gap more than doubled from 1979 to the present. "To put in context how large these education gaps are relative to the top 1 percent," Katz said, "if you are a full-time full-year worker with a college degree, your income gap relative to someone with a high school degree for a male grew by about $20,000 from 1979 to the present, and for females by $13,000." Katz estimates two-thirds of the growth of inequality in the bottom 99 percent is associated with the education gradient.

You can learn more about the Russell Sage Foundation's efforts to examine the effects of inequality on its Social Inequality page. Here is the video:

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