Income Inequality: What Does It Really Mean?

The current concern on the issue of Income Inequality is really not new. As I have noted before it started in the early 19th century and seemed to peak during the first Progressive era from 1890 to 1920. The issue then was that with the influx of immigrants and the extreme wealth of a few, that the country was going to Hell in a hand basket.

Recent authors such as the left wing Irishman at the New Yorker states:

Now for the bad news: the Horatio Alger myth is still a myth. Relative to many other advanced countries, the United States remains a highly stratified society, and most poor kids still have few prospects of making big strides. I’ve already mentioned the finding that the odds of a child moving from the bottom fifth of the income distribution to the top fifth are less than one in ten, and have been that way for decades. For children who are born in the second fifth of the income distribution, those who might be categorized as working class or lower-middle class, the probability of moving up to the top quintile has fallen significantly. For someone born in 1971, it was 17.7 per cent; for someone born in 1986, it was 13.8 per cent.

 Frankly to see that this does not really add up all one has to do is to look at the backgrounds of the top earners at Goldman Sachs. Unlike the UK we in the US do not have a Constitutionally mandated Aristocracy. The UK does and they believe there is a Divine right to, well money. Here in the US frankly any person if they are smart, so inclined, and can fast talk themselves to the right places, can get to Goldman.

In a similar fashion, I look at the many students from China who come here and with just a bit of searching one finds near poverty a generation or so in the past.

The problem as I see it is what we expect of our children. When I approached college it was; what was I going to do for a living? In the late 1950s most kids in Catholic Schools in New York saw the police or fire departments as a path forward. Many looked for union jobs, sinecures that guaranteed high pay for low yield. Only some 20% or more went to college. A few of us looked past the good Brothers and even Vatican 2 and saw opportunity. Thus one got a degree, by hook or by crook, so as to get a well paying job, not to be "educated". The problem today is we seem to send our children to college and seem never to ask them how they will earn a living.

The kids coming out and going to Goldman had asked that question early on and were directed to go there. Goldman and the like are one of the many opportunities available. Entrepreneurs have a much better chance than when I started with my first start up in 1969. There were at best a handful of venture companies, if such was even an appropriate term. Now, there are still thousands. And there are globalization trends. There are very few silver spoons. This is not the UK. Fortunes are made and lost. Then they are made again. That is the glory of the United States.

Perhaps, as I suppose, the drop in some incomes, is because we failed to ask, "What are you going to do for a living?" Instead we allowed a generation or two to take up their interests never worrying about their lives!