The correlation between income equality and education inequality

Bird Dog's picture

The Tax Foundation has an interesting graphic on the relationship between incomes and levels of education.

 

[img]http://www.taxfoundation.org/UserFiles/Education_and_Income_Gaps.png[/img]

It is more than ironic that those, such as President Obama, who advocate for increased government funding for student aid would then decry the inequality that results from a growing class of college-educated workers. Last year, Census reported that "for the first time ever, more than 30 percent of U.S. adults 25 and older had at least a bachelor's degree...As recently as 1998, fewer than one-quarter of people this age had this level of education."

Census data also shows that in 2010, a worker with a high school degree made an average of $50,561, while a person with a bachelor's degree made an average of $94,207 - 86 percent more. Someone with a master's degree made an average of $111,149 - roughly 120 percent more. In 2010, there were 5.6 million more Americans with bachelor's degrees than in 1998 and nearly 3.5 million more with master's degrees. The income differences are even more extreme for those with professional degrees or doctorates.

This raises two questions for those who advocate for using the tax code to address inequality. First, how will higher tax rates on highly educated individuals make them less successful? And, how will taxing the educated rich somehow make the legions of workers with high school degrees more successful?

Either way, a higher tax bill should not be the price of a college diploma.

Regarding the final sentence, I think the Tax Foundation has it backwards because higher incomes net of taxes is the benefit of a college diploma. Regarding their raised questions, my answer to the first is "they won't", at least, not at the present marginal rates. To the second, it depends. The bottom line is that, more than ever, getting through high school isn't enough for making a successful living in the 21st century.

 

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'certification inflation'

(#276942)

If you have education in mind, are interested in increasing the level of equality in society, and unwilling to increase taxes on those benefitting from higher education, the solution seems obvious: Raise the standards of education, especially in post graduate programmes.


On a recent vacation trip I came across a surprising number of PhD students. Not a particularly impressive bunch, I have to say. Clever enough, no doubt, but one spend all his spare time obsessively doing sudoku puzzles from a book he carried. Another was never seen without his computer from which blared a never-ending torrent of god-awful trance music. In my work I come across a few PhD candidates, most recently one in 'software quality control engineering'. To say the intellectual impact of this research was minimal is putting it charitably. Granted, this last case was in Korea, notorious for its PhD mills, but I assume the West is not too far behind.


I think we would do well to at least consider the possibility of stemming the endemic 'certification inflation' implied in the stats presented here.

You will kill 10 of our men, and we will kill 1 of yours, and in the end it will be you who tire of it. - Ho Chi Minh

More emotional arguments about taxes

(#276888)
HankP's picture

for the millionth or so time: taxes are not theft, taxes are not punishment. Taxes are the price to live in an advanced society.

 

But conservatives keep pushing this line because they think with their guts.

I blame it all on the Internet

How does spending more on education

(#276885)

help educate more Americans & raise their standard of living? Uh....

 

That is one of the dumbest articles I've ever seen linked on this site, and that's saying something. Also, what corph said.

"Hell is truth seen too late." --Thomas Hobbes

Right, because level of education

(#276883)

is totally independant of parental wealth and access to networks of rich people.  The article brlilliantly shows that there is a high correlation between education level of income.  Extremely valuable insight.


 


It then lazily tries to infer that... I'm not sure what exactly.  A more educated populace leads to more inequality?  That's moronic.  Case in point: pretty much every other country in the world.  I'm not going to look up Gini coefficients and scholarization in my Almanac to prove myself right because this is only a comment.



This raises two questions for those who advocate for using the tax code to address inequality. First, how will higher tax rates on highly educated individuals make them less successful? And, how will taxing the educated rich somehow make the legions of workers with high school degrees more successful?



These have got to be two of the stupidest inferences I've ever read.  As you correctly state, they won't. Taxing a rich person doesn't make him "less successful" (the Luntz framing!  It burns!).  It reduces his take-home pay.  Increasing the rich's tax burden is not an end in itself; it's the means to provide access to those less fortunate and perhaps to reduce the incentive to hoard cash so much.  As to the second, that's why we have tax brackets.  I understand plumbers not being crazy about paying higher taxes to support Art History PhDs.  But if crushing student loan debt, unemployability and non-pensionable earning years don't make up the difference, it's reasonable to increase the burden on those who have benefited the most from society, with or without an education.

Filled out a FAFSA lately?

(#276933)
Bird Dog's picture

nt

"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009

Yes I have, what's your point? nt

(#276939)
HankP's picture

.

I blame it all on the Internet

Huh

(#276990)
Bird Dog's picture

If you have, then the point should be easily understood.

 

"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009

Humor me and make it explicit nt

(#277001)
HankP's picture

.

I blame it all on the Internet

Pass

(#277269)
Bird Dog's picture

I owe you nothing.

"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009

The

(#277276)

-atrical.

"Hell is truth seen too late." --Thomas Hobbes

"more educated populace leads to more inequality"

(#276909)
mmghosh's picture

is that entirely a bad formulation?  I read here that the USA had a much more egalitarian college admissions system in the 70's and 80's.  And the 70's and 80's people are in charge of the 00's and 10's - we've been shown plenty of graphs showing increasing income inequality.  

 

So can we not conclude that those who took advantage of the 70's egalitarian education now favour policies that reverse the system?  Is an educated populace willing to take on more environmental protection, or less?  Noah's Ark and Creation Museums are being built today, not in 1950s.  And so forth.

 

Everyone here knows how I go on about adverse sex ratios.  Well, both in China and here, adverse sex ratios are higher [i]where[/i] the economic situation is better (Punjab vs Kerala).

History doesn't show that in the US

(#276916)
HankP's picture

the G.I. bill after WWII led to the largest increase in the college educated populace in US history. Yet we did not see inequality in the 50s, 60s and 70s. It took Reaganomics to kill the goose that laid the golden egg.

I blame it all on the Internet

The framers of post WW2 policy

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mmghosh's picture

went through the Depression-era relative deprivation experience.  Its the 50's generation who set policies for the 90's - I was probably incorrect in suggesting the 70s generation.

Yes.

(#276944)
Bernard Guerrero's picture

The 70s generation was, in fact, experiencing said policies in the 90s.