Posts Tagged ‘education’
Tags: cartoon, debt, education, gay, gender, inequality, pay, poor, privatization, Republicans, students, Ted Cruz, workers
Tags: capitalism, crisis, economic representations, economics, education, film, mainstream, Minsky
Apparently, there’s a new documentary film [ht: ja]—Boom Bust Boom, directed by Monty Python’s Terry Jones—whose aim is to to popularize the work of Hyman Minsky.
Minsky’s genius was to show that financially complex capitalism is inherently unstable. Under conditions of stability, firms, banks and households will, over time, move from a position where their income pays off their debt, to one where it can only meet the interest payments on it. Finally, as instability rises, and central banks respond by expanding the supply of money, people end up borrowing just to pay back interest. The price of shares, homes and commodities rockets. Bust becomes inevitable.
This logical and coherent prediction was laughed at until it came true. Mainstream economics had convinced itself that capitalism tends towards equilibrium; and that any shocks must be external.
This is the latest attempt, in a long sequence since the crisis of 2007-08, to rediscover and examine the implications of Minsky’s work (which I’ve discussed many times on this blog).
Tags: age, Asians, blacks, chart, education, ethnicity, Hispanics, inequality, race, United States, wealth, whites
According to a new study by the Federal Reserve Bank of St. Louis, little has changed over the past 25 years in terms of the glaring wealth gap in the United States between blacks and Hispanics on one hand, and whites on the other.
The median wealth levels of Hispanic and black families are about 90 percent lower today than the median wealth levels for whites. Back in 1989, the median wealth of a white family was $130,102. In 2013, it was $134,008, after adjusting for inflation. For a Hispanic family, they were $9,229 and $13,900, while for a black family, they were $7,736 and $11,184.
The one group that has experienced an improvement, both absolutely and relative to whites, are Asian families. Their real median wealth grew between 1989 and 2013 from $64,165 to $91,440. And, because of that growth, and the precipitous decline in white family wealth after 2007, Asian household wealth rose from 49 to 68 percent of white wealth.
While the authors of the study do not attempt to analyze all the factors causing the large and persistent gap between white and black/Hispanic wealth, they do look at the role of age profiles and educational attainment and conclude that
differences in the age composition and in the level of educational attainment across groups explain relatively little of the gaps. Indeed, race- and ethnicity-related financial-health disparities are greatest among older and better-educated groups, where financial health and wealth generally are at their highest levels.
Tags: banks, cartoon, education, food, healthcare, HSBC, money laundering, politics, schools, Scott Walker, unions, United States, wages, winter, Wisconsin
Tags: education, inequality, productivity, profits, technology, United States, wages
As I have explained to generations of students, Americans like to think that education is the solution to all economic and social problems. Including, of course, growing inequality.
Why? Because focusing on education—encouraging people to get more higher education—involves no particular tradeoffs. More education for some doesn’t mean less education for others (at least in principle). And providing more education doesn’t involve any structural changes in society—just more funding. (Of course, suggesting more education under current conditions—when public financing of higher education continues to decline, and students and their families are forced to take on more and more debt—is itself disingenuous).
As a result, there’s a broad consensus in the middle—among conservatives and liberals alike—that encouraging more young people who have yet to enter the labor market and existing workers who want to get ahead to obtain a college education will solve the problem of inequality.
Uh, no. That’s because, as Paul Krugman points out, focusing on education is an elaborate dodge from the real issues.
the reason this is an evasion is that whatever serious people may want to believe, soaring inequality isn’t about education; it’s about power. . .
The education-centric story of our problems runs like this: We live in a period of unprecedented technological change, and too many American workers lack the skills to cope with that change. This “skills gap” is holding back growth, because businesses can’t find the workers they need. It also feeds inequality, as wages soar for workers with the right skills but stagnate or decline for the less educated. So what we need is more and better education. . .
As for wages and salaries, never mind college degrees — all the big gains are going to a tiny group of individuals holding strategic positions in corporate suites or astride the crossroads of finance. Rising inequality isn’t about who has the knowledge; it’s about who has the power.
There are two ways to look at this. One, using the chart above (from the Economic Policy Institute), is to see how workers with different levels of education have fared since 2007. It is clear that those in every education category experienced falling or, at best, stagnant wages since 2007. And while the data do show that college graduates have fared slightly better than high school graduates since 2007, this is not because of spectacular gains in the wages of college graduates, but because their wages fell more slowly than the wages of high school graduates.
The other way is to look at changes in average incomes within the top 10 percent, most of whom have college and advanced degrees. As we can see, the top 1 percent (blue line) has been pulling away from everyone below them (such that, between 1976 and 2012, the ratio of the average incomes of the top 1 percent to the bottom 90 percent rose from 10.5 to 33.5). But the top .01 percent (bright green line) has been pulling away even faster—from the bottom 90 percent (the ratio of their incomes to the bottom 90 percent increased over the same period from 80 to 661) and from their fellow college graduates in the top 1 percent (that ratio increased from 7 to 21).
In other words, the wages of college graduates haven’t been faring all that well in recent years and, over the longer term, inequality has been growing among college graduates. Thus, the lack of education is not the problem, and more education is not the solution.
The fact is, in recent years and since the mid-1970s, wages of most workers have been stagnant, while productivity has continued to grow. As a result, corporate profits have soared to new record highs and a tiny minority at the top has been able to capture a share of those profits in the form of spectacularly high earnings and capital gains. That’s not because they have more education; it’s because they happen to be at the right place at the right time.
The “very serious people” at the top may try to convince the rest of us that obtaining more education will make us “worthy” of more income, thus leading to less inequality. But that’s just an attempt to deflect attention from the real causes.
And, to be honest, it doesn’t take a college education to understand the real causes of growing inequality in the United States.
Tags: bailout, cartoon, education, film, Jamie Dimon, JPMorganChase, middle-class, Mitt Romney, politics, regulation, student loans, unpaid internships
Tags: books, economic representations, economics, education, films, lists
I don’t know if economics has made any progress. (I don’t know what that would mean, and I certainly don’t know how I would measure it.)
But I do know that my students last semester, in Topics in Political Economy, read five books (The Wealth of Nations, Capital, The Great Transformation, The Theory of the Leisure Class, and Capital in the Twenty-First Century) on the list of the 100 Best Economics Books of All Time [ht: sk], and two more books (Knowledge and Class and The Price of Inequality) by authors on that list. And they watched four classic economics films (Modern Times, Harlan County USA, Roger & Me, and Inside Job).
Not a bad semester’s work, if I do say so myself. . .