Tag Archives: stjohns

Inequality on the rise, and why you should care

Why has the gap between the rich and the rest of us increased steadily in the last thirty years?

Some studies, such as Controversies about the Rise of American Inequality: A Survey by Robert J. Gordon and Ian Drew-Becker, list a number of reasons. These can include a decline of unionization, disparities in the growth of price indexes and in life expectancy between the rich and poor, investment opportunities among the rich, cheap foreign labor, and corporate exploitation.

However, there are innumerable factors that come into play, from both governmental and societal sources. The real question is: what are the main factors that have increased such unprecedented inequality.

Camden, New Jersey, which is the poorest per capita city in the U.S. By Phillies1fan777 at en.wikipedia [Public domain], from Wikimedia Commons

Camden, New Jersey, which is the poorest per capita city in the U.S By Phillies1fan777 at en.wikipedia [Public domain], from Wikimedia Commons

Result of Inequality

As a country, in the last thirty years, we have moved toward less manufacturing and productivity and to greater inequality and economic decline. We have also witnessed the decline of labor unions, the only large institution that represents working and middle class people against the lobbyists, lawyers and consultants of the money class.

The victims of this inescapable misfortune are the common people, the masses who find it difficult to find good-paying jobs. Certainly centuries-old stagnation has disappeared and our economic model has engineered great wealth for Americans, but wealth not for the majority but a tiny minority. In good times, few people questioned the America model of free enterprise and free markets, despite the fact we were producing fewer things and our recent wealth was based on financial engineering and excessive consumerism which has driven us into massive debt…

We are destined to an uncertain future, very different from projections of unlimited power and wealth that characterized speeches of our presidents and pundits from the Wilson era to the Reagan and Bus II era. President Obama inherited a misguided free-marker system, with minimal transparency and restraint, and attempted to redefine American capitalism. He is not only trying to create a more intrusive government as a counter weight to market forces, by he is also attempting to represent the needs of working people and the middle class.
-Allan Ornstein, Wealth vs Work: How 1% Victimizes 99%

Downtown Short Hills, NJ, one of the richest towns in the U.S... Only an hour and a half from Camden, NJ.  Daniel Case at the English language Wikipedia [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0/)], via Wikimedia Commons
Downtown Short Hills, NJ, one of the richest towns in the U.S… Only an hour and a half from Camden, NJ.
Daniel Case at the English language Wikipedia [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0/)%5D, via Wikimedia Commons

Why should we care?

Inequality, some may argue, is merely an inherent result of capitalist economies. However, inequality now is the highest it has been since the Great Depression, according to many studies. Historically, this bodes badly for business. Evidence of this is the drop in the Black Friday weekend spending by nearly 11% this past Fall, according to TIME Magazine.

More obvious, rising inequality is bad for society. In the book Ill Fares the Land by Tony Judt, he wrote, “There has been a collapse in inter-generational mobility: in contrast to their parents and grandparents, children today in the UK as in the US have very little expectation of improving upon the condition in which they were born.”

In today’s world, unless you are born rich, extraordinarily lucky, or graduate from an Ivy League college, your hopes of social mobility are far slimmer than they were 30 years ago.

I see this as the decline of the American dream…As you read this blog, what do you think are the main factors that have induced this unprecedented growth of inequality? Does social mobility still exist in your view? 

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A push to enroll low-income students in elite universities

Colleges boast their religious, ethnic, and racial diversity…but can they brag about economic diversity?

Many selective, elite colleges tend to avoid enrolling many low-income students. This is because these students need financial aid. Colleges choose students with political connections, legacy preference, and athletic ability. Therefore, academic excellence and talent are ignored, while saving money and pleasing alumni are enforced practices.

“Children from advantaged homes have parents with political and social connections as well as alumni and business-related connections by birth that help them get into Ivy League colleges and high-paying jobs. Competition for good jobs requires that you get into the right university, not just a university. According to former Harvard President Lawrence Summers, “Just 3 percent of students at the nation’s top 146 colleges come from families in the bottom socioeconomic quartile,” that is the bottom 25 percent. These figures are echoed in a 2006 higher education report that less than 10 percent of the students in the most selective colleges come from the bottom half of the income scale, whereas 74 percent come from the top quarter, evidencing marked disparities based on income”
Wealth vs. Work: How 1% Victimize 99%. p. 214. Allan Ornstein

Prestigious institutions of higher learning discriminate against students on the basis of tuition and price out the majority of applications because of financial need.

In order to incentivize colleges to enroll more low-income students, the Jack Kent Cooke Foundation of Northern Virginia has announced a new, no-strings-attached $1 million prize. According to the New York Times, “it will be awarded each year to a college that excels in enrolling and graduating low-income high achievers.”

Noteremote [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], from Wikimedia Commons

Noteremote [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)%5D, from Wikimedia Commons

Several elite colleges, such as Vassar, Princeton, Harvard and Amherst, have begun to make changes in a similar direction. Vassar college will be the inaugural winner of the award, and plans on using the prize money to fund scholarships and orientation programs.

What other changes can be made to push colleges toward economic diversity? Do you think top universities need change?

If education won’t fix the income gap, what will?

“Will we accept an economy where only a few of us do spectacularly well?” asked President Obama in the State of the Union speech this past January. “Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?”

However, a new study from the Hamilton Project, co-authored by Treasurer Secretary Lawrence Summers, says decreasing inequality won’t be so easy. In a simulation created by the study, one of every ten men in the U.S. without a B.A. suddenly graduated college (which in reality would be a huge national accomplishment.

The results were astounding:

According to a TIME magazine article on the issue, “The results show income in the bottom 25th percentile would increase from $6,100 to $8,720, and median income would increase from $34,000 to $37,060, while those with higher incomes were hardly affected.” This is barely a dent on the income distribution, and the majority of the nation’s money will still be concentrated at the top—the super rich.

-credits: The Hamilton Project, Increasing Education paper

-credits: The Hamilton Project, Increasing Education paper

I tend to have a more pessimistic view on economics. Thinking locally, societally, nationally and globally: failed aspirations are a part of life. We are chasing after dreams framed on achieving a certain income, without taking the appropriate time to notice the inequality that most of humanity faces. My view is outlined here in an excerpt:

“I have little patience with the central tenants of economics, for I think they are grand frameworks which often do not apply to the changing world, they are one-sided (in favor of the rich and super rich) and organized to keep ordinary people down. Despite all the gurus with big ideas who publish books or give speeches, and despite all the politicians who claim to represent people, the system has always worked for the favored few. Of course, if you believe in the gospel, or if you are some sought of Reaganite conservative, then you have a different explanation why there are so many poor and powerless people, so many working people who have to hold down two or three jobs to make ends meet, and why there are so many shameful social deficits within our society.” Source: Allan Ornstein, Wealth vs Work: How 1% Victimize 99%. P. xvii.

Now that this research has come out…What do you think could be a remedy for the income gap? Do you believe there is a fix at all? With such a complex, economic question comes thousands of answers and possibilities.

Excellence vs. Equality: A conscience of the times

This blog, titled Excellence Vs. Equality, is an updated and in-depth commentary on schools and society in the 21st century, as well as a supplement to my website, allanornsteinbooks.com. The focus will be framed around globalization, technology, and inequality: major trends shaping the world around us. Other topics will include a shrinking middle class, the rich and super rich, educational opportunity, human potential, innovation and creativity, economic growth and development, and the rise of Asia as an economic force. As an education enthusiast, of sorts, I have a lot to say about the aforementioned subjects. I hope to inform, spark debate, and serve as a constant commentary on every day social, economic, and educational news and policy.

If you must know my background, I am a Professor of Education and Social Policy at St. John’s University. I have also authored more than 60 books and 400 articles. Most of these books can be found on my website. Feel free to comment, remark on, or retort any of the posts on this blog. In that way, we can all contribute to an ongoing conversation.