A Growing Wealth Gap

Monday, April 29, 2013

The Statue of Liberty (Devon Jefferson/flickr)

A new study from the Urban Institute offers strong evidence that the recession has exposed the United States as an economy without equality of opportunity.  The study shows a growing disparity in wealth between non-Hispanic white Americans and most minority groups-- and argues that major policy reforms are necessary to level the playing field for all Americans.

Darrick Hamilton, associate professor of urban policy and economics at the New School in New York breaks down the Urban Institute's findings.

Guests:

Darrick Hamilton

Comments [6]

dbaldwin from Seattle, WA

This idea should not be easily dismissed, but it does need some careful thought.
The time for such a plan to be effective is at birth. If a meaningful endowment is provided at birth, the natural functioning of the economy will keep the funds growing. But the initial amount needs to be meaningfully indexed; for example, it could be pegged to the sum of a 10% down payment on a median priced home and 4 years tuition at a state institution. Provided at birth but accessible only for post-secondary education before an age at which the fund would be fully invested in the individual. Two probable effects: 1. the parents of newborns would know that their children were welcomed into American life and 2. K-12 education would need to be modified so that recipients would understand how to make good use of their capital. On financing, one means would be a "tax" on corporations of 1-2% of outstanding shares, a device that would be minimally disruptive of markets because it would dilute the value of all outstanding shares rather than requiring payment of taxes.
Think on it.

May. 01 2013 07:47 PM

Equality is a popular theme, but social stratification is a reality. We need the poor for all the jobs we’ve worked hard to avoid, and while we may each struggle to be king of our mountain with the most toys and largest estate, giving each an equal amount would create much unhappiness to those who have the skills needed to actually make things work and who would soon capture the capital of those less familiar with the market place.
That said, some supposedly smart people were conned by Enron, Arthur Anderson Accounting, and the like, but that was a trifling relative to the passage of the Gramm–Leach–Bliley Act (GLB), also known as the Financial Services Modernization Act of 1999, which repealed part of the Glass–Steagall Act of 1933, removing barriers in the market among banking, securities and insurance companies that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company, and justified in part by having SEC fail to enforce the law when Citicorp, a commercial bank holding company, merged with the insurance company Travelers Group in 1998 to form the conglomerate Citigroup.
Could Pres. Clinton, Senator Phil Gramm, et al, have been ignorant of the school boy wisdom of the history of the insurance industry and why it became regulated? Thank these players for the financial industry set up and the multi-billion dollar bail out that enriched a few and impoverished many.
Common corruption aside, wealth is more than a measure of money; it is a culture, investments in habits of thought and practice that marketing routinely challenges. Does the time invested in social media, pop culture and watching TV provide a better return than would seriously doing homework?

Apr. 30 2013 04:00 PM
Linda from New Jersey

Hasn't Mr. Hamilton figured out by now that throwing more money at inequality isn't the answer. Perhaps parenting programs would help. I also think that the minority communities need to come together to make education and success a priority. There are many examples of non-white immigrants coming to this country with no education or money but focused on raising their children to see the importance of hard work at school and at home. Then the next generation of these families graduated top in their class and go on to higher education. That was the way it was with my grandparents who came to America uneducated and poor and with great sacrifice helped put my father through college and a law degree. While we were not minority we were Jewish and my grandparents faced many obstacles to success but knew that the way up was through hard work and education.

Apr. 29 2013 04:39 PM
Todd from Dallas, TX

Any psychometrics department at any college could tell you why different races have different level employment rates:

http://www.google.com/imgres?imgurl=http://3.bp.blogspot.com/-qsxtlJ8grzE/TaEZxIDLrOI/AAAAAAAAHHI/0iIpIYaSv_o/s1600/race-and-iq_bell_curve_shift.jpeg&imgrefurl=http://alfin2100.blogspot.com/2011/04/getting-to-bottom-of-iq-differences.html&h=578&w=722&sz=47&tbnid=Oj1gJiZJ_sCDkM:&tbnh=86&tbnw=108&prev=/search%3Fq%3DBELL%2BCURVE%2BIQ%2BRACE%26tbm%3Disch%26tbo%3Du&zoom=1&q=BELL+CURVE+IQ+RACE&usg=__t1hScgF_46bSfRx181-ANjC1PKE=&docid=zBykHLe-2tgEZM&hl=en&sa=X&ei=PHV-UaDeNqPa2AWr1oG4AQ&ved=0CEsQ9QEwAw&dur=78

The problem is that America has decided we're too good to do hands on work like manufacturing, that we'll just put the low IQ through college and make everyone in America a highly paid engineer. The truth is we need every job that exists because the wider range of jobs there are to do the better those all along the path of The Bell Curve will have a job suitable to their intelligence level.

Apr. 29 2013 12:33 PM
Warren from Mass

I don't think that idea could ever work in practice, it would require MASSIVE funding, where would this come from? Furthermore the idea of giving endowments to individuals who don't have any experience managing their own finances and won't have guidelines to act responsibly with these fund sounds like a disaster. If you want to really empower people financially the only real way to do so is through education starting at a young age. PEOPLE DONT GET ANY EDUCATION ABOUT money or CREDIT in school!! Considering the huge amount of private dept we hold, that is INSANE!! It all starts with better education about finance, NOT just throwing money at people and expecting them to act responsibly with it.

Apr. 29 2013 11:37 AM
Bob from Boston

Giving an asset to newly graduated high schoolers, with more towards low income high schoolers in an effort to level the playing field raises a few questions.
1. How will we ensure that this asset is used for starting a business or for schooling?
2. How will we pay for this asset in terms of budget cuts elsewhere/ higher taxes? and on whom?
3. Has the speaker considered the effect on the economies that will use this money-as the effect of all of the easy money floating around in higher education has drastically risen prices. Would it not be possible for those effects to be exacerbated with this plan.

Apr. 29 2013 11:33 AM

Leave a Comment

Register for your own account so you can vote on comments, save your favorites, and more. Learn more.
Please stay on topic, be civil, and be brief.
Email addresses are never displayed, but they are required to confirm your comments. Names are displayed with all comments. We reserve the right to edit any comments posted on this site. Please read the Comment Guidelines before posting. By leaving a comment, you agree to New York Public Radio's Privacy Policy and Terms Of Use.