Cndi 2017 – Title I finance Affirmative

Case – Inequality Adv

XT – Education = Income Inequality

Education level plays a huge role in unemployment rates, leading to even more income inequality.

Strauss 11 (Steven, founding Managing Director of the Center for Economic Transformation at the New York City Economic Development Corporation, Advanced Leadership Fellow at Harvard University for 2011-2012, “The Connection Between Education, Income Inequality, and Unemployment”, Huffington Post, 2 November 2011, http://www.huffingtonpost.com/steven-strauss/the-connection-between-ed_b_1066401.html, Accessed 2 July 2017, JY)

High and rising income inequality in the United States has recently been widely commented upon. What has not been as widely discussed is the role educational attainment has played in these disparities. Indeed, America is in some ways two different countries economically, segregated by educational achievement. Table 1 below shows a significant relationship between income levels and educational attainment. Basically, the higher the education level, the higher the income. For example, people with professional degrees earned 6x as much as people who did not graduate from high school (in 2009: $128,000 vs. $20,000). However, this is not just an income effect. Table 2 demonstrates that US unemployment rates and educational attainment are also strongly related to each other. The better educated the group, the lower the unemployment rate — and this striking result is consistent over a ten-year period and is highly significant. These figures strongly suggest weak demand in our economy — over a long period — for less educated workers, and greater demand for more educated workers. Even assuming an imperfect labor market, this indicates rising wages for workers in demand (high educational attainment), and weak-to-flat wages for workers not in demand (low educational attainment). At the extremes, if you have less than a high school education, you’ve spent the last 10 years in a recession — with the lowest unemployment rate being 7%, and the highest reaching 15%. If you have a four-year college degree and at least some graduate school, recessions have been mild — with current unemployment rates of 4.5%, compared to an overall rate of 9%. In many ways, our two economies have created two separate societies. Those with low educational attainment drift permanently between recessions and depressions, with little stability. Those with high educational attainment experience increased wealth, only mild recessions, and interesting projects with personal growth. Additionally, these numbers suggest that our lack of highly-skilled knowledge workers is a major binding constraint on the growth of the American economy. In 2006 and 2007, unemployment rates for the highly-skilled group were as low as 2% — a figure viewed as basically beyond full employment. These results also imply that further economic growth in 2007 would have resulted in even higher wages (and more income inequality) for the more highly educated group. Interestingly, it appears that high school students are already reacting to these price signals from the market. In 2000, 63% of high school completers enrolled in college. By 2009, this number approached 70% (SAUS, Table 276). Some potential policy implications: Finding employment for older workers with limited educational attainment may be challenging. A significant number of people may prematurely withdraw permanently from the labor force. The next cyclical economic upswing will likely again see shortages of highly-skilled workers. Visa reform allowing increased importation (or retention) of ‘top talent’ would greatly benefit our economy, by reducing a major constraint on economic growth. Most flat tax proposals appear to only increase income inequality (by lowering taxes for higher income groups) without addressing the structural unemployment issues. With due respect to our presidential hopefuls — flat taxes, regulatory reform and fiscal austerity don’t address a major cause underlying income inequality and unemployment. Instead, their proposals might just make things worse.

Poor public education in impoverished communities restricts access to higher education, a key driver of income inequality.

Porter 15 (Eduardo, member of the Times editorial board, “Education Gap Between Poor and Rich Is Growing Wider”, The New York Times, 22 September 2015, https://www.nytimes.com/2015/09/23/business/economy/education-gap-between-rich-and-poor-is-growing-wider.html, Accessed 2 July 2017, JY)

The wounds of segregation were still raw in the 1970s. With only rare exceptions, African-American children had nowhere near the same educational opportunities as whites. The civil rights movement, school desegregation and the War on Poverty helped bring a measure of equity to the playing field. Today, despite some setbacks along the way, racial disparities in education have narrowed significantly. By 2012, the test-score deficit of black 9-,13- and 17-year-olds in reading and math had been reduced as much as so percent compared with what it was 3o to 4o years before. Achievements like these breathe hope into our belief in the Land of Opportunity. They build trust in education as a leveling force powering economic mobility. We do have a track record of reducing these inequalities," said Jane Waldfogel, a professor of social work at Columbia University. But the question remains: Why did we stop there? For all the progress in improving educational outcomes among African-American children, the achievement gaps between more affluent and less privileged children is wider than ever, notes Sean Reardon of the Center for Education Policy Analysis at Stanford. Racial disparities are still a stain on American society, but they are no longer the main divider. Today the biggest threat to the American dream is class. Education is today more critical than ever. College has become virtually a precondition for upward mobility. Men with only a high school diploma earn about a fifth less than they did 35 years ago. The rap between the earnings of students with a college degree and those without one is bigger than ever. And yet American higher education is increasingly the preserve of the elite. The sons and daughters of college-educated parents are more than twice as likely to go to college as the children of high school graduates and seven times as likely as those of high school dropouts. Only 5 percent of Americans ages 25 to 34 whose parents didn't finish high school have a college degree. By comparison, the average across 20 rich countries in an analysis by the Organization for Economic Cooperation and Development is almost 20 percent. The problem, of course, doesn't start in college. Earlier this week, Professor Waldfogel and colleagues from Australia, Canada and Britain published a new book titled "Too Many Children Left Behind" (Russell Sage). It traces the story of America's educational disparities across the life cycle of its children, from the day they enter kindergarten to eighth grade. Their story goes sour very early, and it gets worse as it goes along. On the day they start kindergarten, children from families of low socioeconomic status are already more than a year behind the children of college graduates in their grasp of both reading and math. And despite the efforts deployed by the American public education system, nine years later the achievement gap, on average, will have widened by somewhere from one-half to two-thirds. Even the best performers from disadvantaged backgrounds, who enter kindergarten reading as well as the smartest rich kids, fall behind over the course of their schooling. The challenges such children face compared to their more fortunate peers are enormous. Children from low socioeconomic backgrounds are seven times more likely to have been born to a teenage mother. Only half live with both parents, compared with 83 percent of the children of college graduates. The children of less educated parents suffer higher obesity rates, have more social and emotional problems and are more likely to report poor or fair health. And because they are much poorer, they are less likely to afford private preschool or the many enrichment opportunities — extra lessons, tutors, music and art, elite sports teams — that richer, better-educated parents lavish on their children. When they enter the public education system, they are shortchanged again. Eleven-year-olds from the wrong side of the tracks are about one-third more likely to have a novice teacher, according to Professor Waldfogel and her colleagues. They are much more likely to be held back a grade, a surefire way to stunt their development, the researchers say. Financed mainly by real estate taxes that are more plentiful in neighborhoods with expensive homes, public education is becoming increasingly compartmentalized. Well-funded schools where the children of the affluent can play and learn with each other are cordoned off from the shabbier schools teaching the poor, who are still disproportionally from black or Hispanic backgrounds. Even efforts to lean against inequality backfire. Research by Rachel Valentino, who received her Ph.D. in education policy at Stanford University this year, found that public prekindergarten programs offered minorities and the poor a lower-quality education. Perhaps pre-K programs serving poor and minority children have trouble attracting good teachers. Perhaps classrooms with more disadvantaged children are more difficult to manage. Perhaps teachers offer more basic instruction because disadvantaged children need to catch up. In any event, Ms. Valentino told me, "the gaps are huge." This is arguably education's biggest problem. Narrowing proficiency gaps that emerge way before college would probably do more to increase the nation's college graduation rate than offering universal community college, easier terms on student loans or more financial aid. "If we could equalize achievement from age zero to 14," Professor Waldfogel told me, "that would go a long way toward closing the college enrollment and completion gaps." It can be done. Australia, Canada — even the historically class-ridden Britain — show much more equitable outcomes. The policy prescriptions go beyond improving teachers and curriculums, or investing in bringing struggling students up to speed. They include helping parents, too: teaching them best practices in parenting, raising their pay and helping them with the overlapping demands of work and family. And yet the strains from our world of increasing income inequality raise doubts about our ability to narrow the educational divide. Poorer, less educated parents simply can't keep up with the rich, who are spending hand over fist to ensure that their children end at the front of the rat race. Our public school system has proved no match to the forces reproducing inequality across the generations. Fifty years ago, the black-white proficiency gap was one and a half to two times as large as the gap between a child from a family at the top Both percentile of the income distribution and a child from a family at the loth percentile, according to Professor Reardon at Stanford. Today, the proficiency gap between the poor and the rich is nearly twice as large as that between black and white children. In other words, even as one achievement gap narrowWe have all heard the political rhetoric that has been used against unions, painting them as standing in the way of economic growth and as a drag on the freewheeling economics of recent years. However, history portrays a different picture.

Education is key to reducing income inequality.

Dabla-Norris 14 (Era, deputy chief in the IMF’s Strategy, Policy and Review department, “Why education policies matter for equality”, World Economic Forum, September 2014, https://forumblog.org/2014/09/education-policies-matter-for-equality/, Accessed 2 July 2017, JY)

Much of the debate on inequality focuses on its deleterious social and political effects and its impact on growth. But an equally important question is which policies play a clear role in reducing income inequality. The results of our new study suggest that improvements in education – even more than factors such as government expenditure or financial-sector development – have contributed in an important way to reducing income inequality within countries. In our study, we first explore whether a country’s income distribution becomes more equal as it grows richer – a question that has intrigued economists as far back as Simon Kuznets. Is income inequality reduced as countries grow more prosperous? Does this relationship depend on the country’s stage of economic development? Which factors affect it? Examining historical data, we found that increased prosperity, on average, leads to lower inequality. A 1% increase in GDP per capita reduces the Gini coefficient – a measure of income inequality that ranges from 0 for perfect equality to 1 for absolute inequality – by around 0.08 percentage points. Further, we found that growth in a country’s GDP boosts the relative income share of the poor and the middle class at the expense of the richest 20%. In other words, not only do the poor and the middle class benefit from growth, they actually benefit proportionately more than the rich. These results hold true across regions and across different stages of development. We tried to pinpoint exactly how increased prosperity helps reduce inequality, and discovered that education plays a key role. Indeed, our results suggest that education policies – particularly those that concentrate on equity and skills – can be among the most potent levers that countries possess to reduce income disparities over the longer term. If growth reduces inequality, how does this square with the increase in labour income and earnings inequality that has been observed in many countries over the past few decades? Technology and globalization are two possible ways to explain this phenomenon. Technological change has conferred an advantage to those adept at working with computers and information technology. And global supply chains have moved low-skilled jobs out of advanced economies, depressing prospects of workers who previously held these jobs. Even in countries to which these jobs relocate, the initial beneficiaries are often the more skilled workers. Education matters because educated individuals are better able to cope with technological and environmental changes that directly influence productivity levels. Indeed, better education is the best policy to help countries avoid the increase in income inequality that often results from technological change and globalization. So what can be done? For many advanced economies, including the United States, bringing down inequality in the future means increasing the supply of highly educated workers. Too many young people drop out of high school; too many high-school graduates are not college-ready. Then there is the cost of higher education, which in the US is prohibitively expensive for many families. These are problems that could be solved by better government policies. In many developing countries, levels of educational attainment still remain uncomfortably low, with access to even basic education constrained by market failures and inefficient policies. While the precise focus of policies necessarily varies across countries, a number of broad areas can sketched out. Education policies that help students achieve strong academic outcomes, continue on to higher levels of education and acquire the skills to succeed in a globally competitive economy can foster greater inter-generational earnings mobility and help reduce income inequality over time. In developing countries, policies that promote equal access to basic education, such as cash transfers aimed at encouraging better attendance at primary schools or spending on public education that benefits the poor, could reduce inequality by helping build human capital and making educational opportunities less dependent on socio-economic circumstances.