Paying Attention to the Kids

Whether Americans are doing right by their kids is a recurrent subject of often bitter debate. With controversies about the “tiger mom,” or “helicopter parents,” or career women “dumping” their children on others, or men doing their share, there is no end of worry about whether 21st-century American parents are properly committed to their children.

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Some recent data suggests that American parents in the last generation have been at least trying harder than parents did decades ago. They are spending more money on their kids and, given their work schedules, spending more time with their kids. This trend developed in the face of other trends have made attending to kids more and more difficult: the growth of single parenting, the entry of most mothers into the labor force, and the exacerbated financial strains on middle- and working-class families. While parents are making the effort, as is so often the case these days, widening inequality makes it harder for some parents and kids than others.

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A Modern “Antebellum Puzzle”?

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As described in an earlier post, there was a long period during America’ nineteenth-century economic growth in which progress was so uneven, so unequal that the height and life spans of Americans declined for a few decades. On average, those who were born between roughly 1830 and 1870 grew up a bit shorter and lived a bit shorter lives than those born before and after. Wealthier Americans’ children, however, did not suffer this setback.

The “antebellum puzzle” of widespread GDP growth but worsening lives for average Americans is explained, in part, by the increasing spread of disease among an urbanizing and traveling people and even more by a reduction in nutritious food for children. Growing national and international demand drove up the price of foods like milk and meat and even led farmers to divert their production from feeding their families to selling crops on the global market. The unevenness of developing commerce helps explain the unequal pattern of height loss.¹

This history raises for us the question of whether the recent expansion of inequality since the 1970s is creating its own, modern version of the “antebellum puzzle.”

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A Cost of Inequality: Growth

A recent story in The New York Times, back in its business section, had important news about inequality: “Income Inequality May Take Toll on Growth.” A couple of economists at the IMF reported research (here) showing that, across many countries, periods of greater income inequality tend to be followed by slow-downs in economic growth.

Percent of All Income Gained by Top Tenth, 1917-2007 (Atkinson et al, 2011)

This is, actually, old news. About twenty years ago the research literature already showed that inequality probably damped the economy (see pp. 126ff here). But this remains important to repeat – not just because reporting the baleful effects of inequality now has the imprimatur of the IMF, but also because so many people still resist the news; they insist instead on believing the opposite, that inequality stimulates the economy, to the benefit of everyone. And, of course, this insistence has political implications right now.

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The Assets Gap

Income inequality is widening, especially in the United States, which already has the widest income inequality among comparable nations. Just about everyone who pays attention knows this. The debate has now moved on to whether growing income inequality is inevitable. Should we just live with it? Is it really bad  — perhaps inequality is just how economies grow? (Wrong.) But in focusing on Americans’ paychecks, we attend too little to the greater component of widening social inequality: wealth.

aging.ohio.gov

It is accumulated wealth that better defines economic inequality, in quite visible ways — the mansion on the hill versus the trailer in the flats –  and in subtle but important ways, too, such as the risks some young people can  take and others cannot. Go to college? Accept an unpaid internship? Start a business? Or, play it safe and  take the cash register job at the supermarket?

Family wealth helps a lot. But wealth is hard to to assess — and to tax.

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Geography of Inequality

One vision of the digital electronic future is that it would “erase” place and space. One can Skype over a cell phone with people half a globe away. A law firm can send audio to India and get back transcriptions in the morning. A firm in California can order goods from Korea and have them shipped to a customer in Europe. The vision that all places are one is not new. Over a hundred years ago a journalist wrote that, thanks to the telephone, by our time everyone would live on their own mountain top and do their work over the electronic wire. Didn’t happen then; isn’t happening now. Where you live and work seems to matter economically and culturally at least as much now as decades ago. The obvious example is the continuing concentration of the IT industries themselves – Silicon Valley, Silicon Alley, Silicon Wadi, etc. (here).

Wikimedia: Uptown

Wikimedia: Bev. Hills

This musing is occasioned by a recent article in the Times occasioned by a report from the Brookings Institution on how American metropolitan areas are becoming increasingly different from one another with respect to the educational levels of their residents. Some places, like Washington, Boston, and San Francisco are experiencing growing concentrations of the college-educated; others like Las Vegas, Memphis, and Dayton are falling further behind. Early followers of this blog will have read of this trend 16 months ago and of a related trend, the concentration of twenty- and thirty-something college graduates in particular downtown neighborhoods of those cities.  But why does this matter?

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Cheerful Yanks?

In the 20th century a common stereotype of Americans was that they were a cheerful lot – perhaps too booming cheerful for Europeans who had to endure “have-a-nice-day!” tourists. An interesting article by a scholar of Bulgarian origin identifies a particular period in American history when “good cheer” first became an important value here, displacing an earlier, more dour phase. It appears that, now, in the 21st century, our modern cheeriness is in recession — and unequally so.

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Unequal Denial

That economic inequality is great and growing in the United States is now hard to deny. An earlier post reviewed how average Americans see and understand economic inequality. But one of the side stories is the expert debate about this inequality. Having followed the public and academic arguments about inequality for a few decades, I have a sense of how the terms of the debate have shifted and how defenders of post-1960s policies have responded. It’s an interesting dance of denial.

After a brief recap of the basic evidence, I’ll turn to that dance.

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Protected Class

For all the fierce debate in Washington about cutting government spending, it is striking how the interests of one class — the elderly — are protected by politicians on both sides. The Democrats roundly attack the GOP for proposing radical changes in Medicare and Medicaid that would, they charge, undermine the security and health of the elderly.

(image via CDC)

The GOP loudly proclaims that these changes would affect only those now under 55, so none of today’s elderly and soon-to-be-elderly would be touched (grandfathering them in, so to speak). And neither side would do more than delicately tinker with Social Security. Hardly anyone dares whisper that senior citizens might be discomfited.

This is odd: Today’s senior citizens are better off than other Americans – certainly better off than American children. And yet, they are to be protected more than other Americans. (Disclosure: I will soon join this protected class.)

There is increasing awareness of growing inequality in the United States, of the widening gap between the rich and everyone else. But here is another dimension of growing inequality: the gap between the generations. And these haves are getting to have more.

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Buying a Head Start

The widening gaps between Americans of average wealth and well-off Americans, and especially, super-well-off Americans over the last 40 years have now been fully documented and heavily discussed. But it’s not just about money. We are seeing, as well, growing economic, social, geographical, and cultural divisions between Americans of less and more education. (See, e.g., this earlier post.)

barnaby watson via flikr

Now, Sean Reardon of the Stanford School of Education has described another way that these two developments have increasingly combined to widen social class differences. More and more over the last four decades, affluent parents have leveraged their financial assets into better academic skills for their children. Having those greater skills, in turn, gives their kids an even larger head start in the race for higher education and its financial payoff.

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Degree Inequality

It is now generally understood that economic inequality has expanded greatly since about 1970. (Well, there are exceptions. For a couple of decades, some commentators denied that economic inequality was growing, claiming that it was all a statistical illusion. A few holdouts against reality may remain.) Now the debate has shifted to what – if anything at all – should be done about inequality.

UC Berkeley

Most of that discussion has been about income inequality. Between 1979 and 2007, the one-fifth of American households with the highest income experienced a roughly 100% increase in their annual, inflation-adjusted, after-tax income (280% [!] for the highest one percent of households); the middle one-fifth got about 25% more income; and the poorest one-fifth got about 15% more (see pdf). For wealth – property, stocks, and the like – the gap is enormously greater and has also widened over the last few decades (see Ch. 6 here).

Less discussed is the widening college degree gap. Yet its implications go considerably beyond money, to widening differences in life experiences and ways of life. (I draw in particular on the work of my colleague, Michael Hout, notably here [pdf], and on two books we wrote together, here and here.)

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