TIME Economy

Here’s the Secret Truth About Economic Inequality in America

Mmmmmoney: Get a grip; it's just paper
KAREN BLEIER; AFP/Getty Images Mmmmmoney: Get a grip; it's just paper

Once you look at the issue this way, it's hard to think of it any other way

We all know that inequality has grown in America over the last several years. But the conventional wisdom among conservatives and even many liberals has always been that inequality was the price of growth–in order to get more of it, we needed to tolerate a bigger wealth gap. Today, Nobel laureate Joseph Stiglitz, the Columbia professor and former economic advisor to Bill Clinton, blew a hole in that truism with a new report for the Roosevelt Institute entitled “Rewriting the Rules,” which is basically a roadmap for what many progressives would like to see happen policy wise over the next four years.

There are a number of provocative insights but the key takeaway–inequality isn’t inevitable, and it’s not just a social issue, but also an economic one, because it’s largely responsible for the fact that every economic “recovery” since the 1990s has been slower and longer than the one before. Inequality isn’t the trade-off for economic growth; rather, it’s both the cause and the symptom of slower growth. It’s a fascinating document, particularly when compared to the less radical Center for American Progress policy report on how to strengthen the middle class, authored by another former Clinton advisor, Larry Summers, which was widely considered to set out what may be Hillary Clinton’s economic policy agenda.

While the two have some overlap, the Stiglitz report is bolder and more in-depth. It’s also a much more damning assessment of some of the policy changes made not only during the Bush years, but also during Bill Clinton’s tenure, in particular the continued deregulation of financial markets, changes in corporate pay structures, and tax shifts of the early 1990s. During a presentation and panel discussion on the topic of inequality and how it relates to growth (I moderated the panel, which included other experts like Nobel laureate Bob Solow, labor economist Heather Bouchley, MIT professor Simon Johnson and Cornell’s Lynn Stout, as well as pollster Stan Greenberg), Stiglitz made the point that both Republican and Democratic administrations have been at fault in crafting not only policies that forward inequality, but also a narrative that tells us that we can’t do anything about it. “Inequality isn’t inevitable,” said Stiglitz. “It’s about the choices we make with the rules we create to structure our economy.”

One of the big economic questions in the 2016 presidential campaign will be, “why does inequality matter?” The answer–because it slows growth and thus affects everyone’s livelihood–is simple. But the reasons behind it are complex and systemic. Senator Elizabeth Warren and New York Mayor Bill de Blasio were on hand to help connect the dots on that front, with de Blasio calling for more social action in order to “move to a society that rewards work over wealth,” and Warren re-iterating a hot button point that she made last week about inequality and the trade agenda; she believes that Fast Track trade authority for President Obama would allow big bank lobbyists on both sides of the Atlantic to further water down financial reform that could combat inequality, which led the President to call her ill-informed (he didn’t elaborate much on why). Warren noted that the trade deal was being crafted in conjunction with 500 non-governmental actors, 85 % of whom are either industry lobbyists or from the big business sector.

Warren’s mantra about how America’s economic game “is rigged,” ties directly into two of the key takeaways from the Stiglitz report; first, that inequality is all about the political economy and Washington policy decisions that favor the rich, and secondly, that it’s not one single decision–Dodd Frank, capital gains tax, healthcare, or labor standards–but all of them taken together that are at the root of the problem. “Our economy is a system,” says Stiglitz, and combatting inequality is going to require a systemic approach across multiple areas–financial reform, corporate governance, CEO pay, tax policy, anti-trust law, monetary policy, education, healthcare, and labor law. It might also involve revamping institutions like the Fed; Stiglitz and Solow both agreed that the Fed needs to start tabulating unemployment in a new way, perhaps focusing not on a particular number target, but on when wages actually start to go up, which Stiglitz said is the best sign of when the country’s employment picture is actually improving.

Thinking in these more holistic terms would be a big shift for lawmakers used to tackling each of these issues alone in their respective silos. But as Stiglitz and the other economists on the panel pointed out, they are often interrelated–consider the way in which pension funds work with shareholder “activists” to goad corporations into over-borrowing to make large payouts to investors even as lowered wages and profits kept in offshore tax havens mean that long-term investments aren’t made into the real economy, slowing growth. Or how continuing to tie worker’s healthcare benefits to companies makes them virtual slaves, decreasing their ability to negotiate higher wages, not to mention start their own businesses.

It’s a huge topic, and the Roosevelt discussion was part of the continuing campaign on the far left to try to make sure that presumptive nominee Hilary Clinton doesn’t continue business as usual if and when she’s in the White House. Progressives are looking for her to do more than talk about minimum wage and redistribution; they want her to make fairly radical shifts in the money culture and political economy of our country. That would mean a decided split from the policies of the past, including many concocted by her husband’s own advisors, ghosts that Hilary Clinton has yet to publically reckon with.

TIME society

Why Education Alone Won’t End Income Inequality

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The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

We must address the dynamics that encourage companies to extract from, rather than invest in, their employees

We live in a paradoxical time of historically high income and epic wealth inequality. Academics, politicians, business leaders and religious leaders are all concerned about it. Indeed, the extreme level of inequality we now face is often cast as a moral challenge and a threat to the ideals and values of our society. The ideal of the American Dream — the idea that through hard work and individual effort Americans can create a better life for themselves and their families — is confronted by a reality of stagnant incomes, growing numbers of working poor, evidence that economic mobility in the U.S. is elusive, and rising concern that things will be worse for future generations.

This challenge is broadly recognized, but agreement on solutions is hard to find — with one big exception: education. That the route to a good job must pass through higher education is almost universally embraced. Political leaders from both parties as well as a host of academics, foundations and others promote postsecondary education as a silver bullet for ending poverty and inequality. How to achieve or pay for ever greater numbers of post-secondary degrees is a matter of sharp debate, but the idea that improved education is somehow the solution to poverty, economic disenfranchisement and inequality seems to have broad purchase. Alas, it almost surely — on its own — will not work.

First, let’s try this thought experiment. Imagine that every poor person suddenly has successfully completed a rigorous course of study and has earned a bachelor’s degree. Do we then no longer need child care workers, home health aides, landscape workers, security guards, food servers, office cleaners and retail sales associates? Or will companies employing workers in these occupations suddenly decide that, since these workers now have bachelor’s degrees, they should be paid more than $11 or $12 per hour? Will these corporations now decide that these workers should have regular or at least predictable schedules and a predictable income? Or that they are due at least a modest amount of paid sick leave and the opportunity to save for retirement?

It seems unlikely that either the demand for these workers or their wages and working conditions will change as their education levels increase. Indeed that has been the experience to date. The truth is that we have more bachelors’ degreed workers than ever. Some economists find there is an excess of college graduates who are competing for jobs that don’t require a degree. The New York Federal Reserve found that 46 percent of recent college graduates, and 35 percent of college graduates overall, are employed in jobs that do not need a college degree.

In addition, while the rate of growth of jobs that require post-secondary skills is high, it is still the case that most jobs do not requires post-secondary credentials at all—of any type. The U.S. Bureau of Labor Statistics reported that in 2012 only about one-third of jobs required any post-secondary credential. And while the rate of growth for jobs requiring post-secondary credentials is faster, America will still create more jobs in the next decade that don’t require anything beyond a high school diploma. No one can deny that it’s heart-warming to see an individual come from difficult circumstances, get an education and achieve economic security. But we should not imagine that inspiring story for an individual provides a solution for the masses.

Next, let’s look at what keeps people from succeeding in education right now. One of the leading indicators that children and young adults will do poorly in school is their economic status: poverty correlates with poor education attainment. In particular, for young adults in post-secondary school, Public Agenda found that the main reason these students leave college without completing is the need to work and make money. In fact, the students who leave college report that, even if they had free tuition, they would still need to work to support themselves and would be unlikely to go back to school. This leaves us with a bit of a catch-22: to escape poverty one should get an education; but poverty is likely to prevent a person from succeeding in education.

Education is a wonderful thing, but it is not costless and it is not a silver bullet to address poverty. One factor glaringly absent from all the celebratory discussions of education is the changing condition of work. The reason it remains a good idea for most individuals to at least try to get a college degree is not because today’s jobs require college level skills. Rather, it’s because employment options available to people without a college degree are terrifyingly awful. And in a country that purports to value work, we ought to consider why we are so unwilling to pay for it. We should ask ourselves why the people who care for our children and elderly parents or grandparents, the people who prepare and serve us food, the people who clean our homes and secure our office buildings — why do all of these people deserve poverty-level wages?

It is undeniable that investing in education is a good thing. But if we want the masses to get “good jobs” so they can support themselves through their work — and not just the lucky few who can get ahead of their peers through education — then we need to look much more carefully at the nature of work and the kind of opportunity a job offers. Businesses have choices about the ways they structure work just as surely as individuals have choices about pursuing education. Our society is unlikely to address the inequality we face by encouraging an arms race among people desperate to gain access to shrinking opportunities for decent work. We must address the dynamics that encourage companies to extract from, rather than invest in, their employees. We need to raise our expectations of the rewards of work and improve the quality of opportunities available to people willing to work hard. If we want people to climb the economic ladder through education, then we need to ensure that ladder rests on a stable foundation of work that pays enough to live on.

Maureen Conway is the Executive Director of the Aspen Institute Economic Opportunities Program.

This article originally appeared in the Aspen Journal of Ideas.

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TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

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The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Economy

Low Wage Workers Are Storming the Barricades

Activists Hold Protest In Favor Of Raising Minimum Wage
Alex Wong—Getty Images Activists hold protest In favor of raising minimum wage on April 29, 2014 in Washington, DC.

A few weeks back, when Walmart announced plans to raise its starting pay to $9 per hour, I wrote a column saying this was just the beginning of what would be a growing movement around raising wages in America. Today marks a new high point in this struggle, with tens of thousands of workers set to join walkouts and protests in dozens of cities including New York, Chicago, LA, Oakland, Raleigh, Atlanta, Tampa and Boston, as part of the “Fight for $15” movement to raise the federal minimum wage.

This is big shakes in a country where people don’t take to the streets easily, even when they are toiling full-time for pay so low it forces them to take government subsidies to make ends meet, as is the case with many of the employees from fast food retail outlets like McDonalds and Walmart, as well as the home care aids, child caregivers, launderers, car washers and others who’ll be joining the protests.

It’s always been amazing to me that in a country where 42% of the population makes roughly $15 per hour, that more people weren’t already holding bullhorns, and I don’t mean just low-income workers. There’s something fundamentally off about the fact that corporate profits are at record highs in large part because labor’s share is so low, yet when low-income workers have to then apply for federal benefits, the true cost of those profits gets pushed back not to companies, but onto taxpayers, at a time when state debt levels are at record highs. Talk about an imbalanced economic model.

A higher federal minimum wage is inevitable, given that numerous states have already raised theirs and most economists and even many Right Wing politicos are increasingly in agreement that potential job destruction from a moderate increase in minimum wages is negligible. (See a good New York Times summary of that here.) Indeed, the pressure is now on presidential hopeful Hillary Clinton to come out in favor of a higher wage, given her pronouncement that she wants to be a “champion” for the average Joe.

But how will all this influence the inequality debate that will be front and center in the 2016 elections? And what will any of it really do for overall economic growth?

As much as wage hikes are needed to help people avoid working in poverty, the truth is that they won’t do much to move the needle on inequality, since most of the wealth divide has happened at the top end of the labor spectrum. There’s been a $9 trillion increase in household stock market wealth since 2008, most of which has accrued to the top quarter or so of the population that owns the majority of stocks. C-suite America in particular has benefitted, since executives take home the majority of their pay in stock (and thus have reason to do whatever it takes to manipulate stock price.)

Higher federal minimum wages are a good start, but it’s only one piece of the inequality puzzle. Boosting wages in a bigger way will also requiring changing the corporate model to reflect the fact that companies don’t exist only to enrich shareholders, but also workers and society at large, which is the way capitalism works in many other countries. German style worker councils would help balance things, as would a sliding capital gains tax for long versus short-term stock holdings, limits on corporate share buybacks and fiscal stimulus that boosted demand, and hopefully, wages. (For a fascinating back and forth on that topic between Larry Summers and Ben Bernanke, see Brookings’ website.)

Politicians are going to have to grapple with this in the election cycle, because as the latest round of wage protests makes clear, the issue isn’t going away anytime soon.

Read next: Target, Gap and Other Major Retailers Face Staffing Probe

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MONEY Viewpoint

Taxpayers Should Stop Subsidizing “Country Club” Colleges

An education policy expert argues that it's time for more elite colleges to open their doors to low-income students.

For years, Washington University in St. Louis has held the dubious distinction of being the least socioeconomically diverse college in the country.

Just 85 members of its freshmen class entering in the fall of 2012 (5%) came from families with incomes low enough (typically below $50,000 a year) to qualify for a federal Pell Grant. (That’s the most recent year with federal data available.)

Washington University’s proportion of low-income students is remarkably tiny, considering more than a third of all full-time undergraduates qualify for the need-based Pell Grants. It’s also low for schools with tough academic standards. Other elite colleges maintain top reputations while providing many more opportunities to the non-rich: About a third of the students at the University of California-Berkeley—generally considered one of the top universities in the world—qualify for Pell Grants, for example. And more than 20% of students at elite schools like Amherst College and Columbia University come from low-income families.

Adding financial injury to this insult: “country club” private colleges that bar the door to the poor—thus reinforcing socioeconomic inequality—are receiving large tax subsidies from you and me, in part because of their tax-exempt status.

But there finally may be a little good college opportunity news on the horizon. Perhaps in response to the growing criticism of taxpayer subsidies of such country club colleges, some schools like Washington University are starting to at least inch towards providing more opportunities.

This January, Washington University announced a plan to double the proportion of Pell Grant recipients that it enrolls by 2020. Under the plan, Wash U. will spend at least $25 million a year for five years to increase the share of students who qualify for Pell Grants.

“Improving the socioeconomic diversity of our student body is not just important; it’s critical to our success as a university,” Holden Thorp, the university’s provost and executive vice chancellor for academic affairs, said in a news release.

Four other private colleges that currently have low-income populations of only about 10% tell me they are also now working to recruit more low-income students.

Some of the colleges say the problem—and solution—boils down to money.

Officials at Whitman College in Walla Walla, Wash., for example, say one key reason their student body is currently only 10% low-income is that the financial crisis of 2008 reduced their endowment, which is used to fund financial aid. They are now trying to raise more money for scholarships so a more diverse group of students can afford to attend the school. “We have a responsibility to increase access wherever we can,” says school president George Bridges, who is leaving Whitman at the end of the school year to become president of The Evergreen State College in Olympia, Wash.

Likewise, Elon University, in North Carolina, is in the middle of a 10-year campaign to double the amount of need-based institutional aid that it awards. “Elon must not become a gated community open only to those of privilege,” the college states on its website, “and our classrooms and campus life will be much richer when we recruit more students from diverse backgrounds who challenge and lead us by sharing their own life stories…” Because of the difficulty of raising the large sums needed, however, Elon is making “slow progress” in increasing the proportion of Pell students it enrolls, says President Leo Lambert. “We are digging hard into this issue of access, because it makes a big difference in the quality of the kind of community we aspire to be,” he says.

Other colleges are combining fundraising with new recruiting efforts. Colorado College is raising more money for financial aid and partnering with nonprofits such as QuestBridge to recruit low-income historically underrepresented students. “We are really diversifying the pool of highly qualified low-income students that we enroll,” says president Jill Tiefenthaler.

And Kenyon College, in Gambier, Ohio, is increasing its diversity in part by changing its application. In 2013, Kenyon simplified its admissions application, removing extra essays that the school found discouraged first-generation students. It seems to be working: For next year’s incoming class, Kenyon admitted 408 minority students, up 9% from last year, and 128 first-generation college students, the second most the college has admitted in the last decade. “It’s clear to us that we can do better than where we are and where we’ve been in recent years,” says Sean Decatur, Kenyon’s president.

But this battle is far from won. There are still plenty of other colleges that aren’t making an effort to provide opportunities to more than a handful of lucky low-income students. “Just trying to increase the number of Pell Grant recipients might be good for PR, but may be bad policy for our college,” says Randy Helm, the outgoing president of Muhlenberg College, a private college in Pennsylvania where only 8% of the students come from low income families.

Part of the reason is financial. Washington University can afford to spend more on financial aid, since its endowment equates to about $500,000 per student. Muhlenberg’s endowment equates to one-tenth of that: $50,000 per student.

Helm, who is retiring in June, doesn’t think it would be healthy for Muhlenberg to make a concerted effort to recruit and finance substantially more Pell-eligible applicants. If it did, the school would have to spend its entire $36 million financial aid budget supporting them, and wouldn’t have any aid left for middle-income students who are also struggling to pay the school’s $55,000 annual cost of attendance.

“We’re not going to be a school that serves the very, very rich and the very, very poor,” he says. “I don’t think that would be fair to middle-income students, the college, or the country.”

Another reason for the lack of college opportunities may be the pursuit of prestige. Muhlenberg, for example, devotes a significant share of its institutional aid to the pursuit of high-achieving students, who often come from well-to-do families.

A page on Muhlenberg’s website, entitled “The Real Deal on Financial Aid,” acknowledges that the college and many of its competitors often use institutional aid as a “recruiting tool.” “It used to be that you could try for that reach school and if you got in, you didn’t have to worry because everybody who got in, who needed money, got money,” the college’s financial aid office states. “Today, however, as colleges are asked to fund more and more of their own operation with less and less assistance from government, foundations, and families, they are increasingly reluctant to part with their money to enroll students who don’t raise their academic profile.”

Muhlenberg provides “merit aid”—which is not based on financial need—to about 32% of its freshmen, with an average award of nearly $12,500 per student, according to data the college reports to magazines that publish college rankings.

Higher education researchers, the news media, and even the White House have been putting colleges on notice that they must do a better job serving low-income students. It’s encouraging to see that this pressure has been pushing some of the biggest laggards to make progress in this area. Those colleges that continue to hold out, however, deserve additional scrutiny. At a time of growing inequality, we can no longer afford to subsidize colleges that cater to the rich at the expense of the poor.

(Here are Money’s lists of the Most Generous Colleges and the 25 Best Colleges You Can Actually Get Into.)

Stephen Burd is a senior policy analyst with New America’s Education Policy Program. This story was produced by The Hechinger Report, a nonprofit, independent news website focused on inequality and innovation in education.

MONEY College

Many Colleges Offer Affirmative Action for the Rich and Powerful

School girls in uniforms
Hepp—Getty Images

Survey finds 25% of college admissions officers felt pressured to admit influential slackers.

Didn’t get into the college of your dreams? Maybe you weren’t qualified. Or maybe you weren’t connected, influential, or rich enough.

One hundred admissions officers at 400 top colleges and universities surveyed by Kaplan Test Prep—so fully 25% of respondents—said they have “felt pressured to accept an applicant who didn’t meet (the) school’s admissions requirements because of who that applicant was connected to.”

And 16% said their school gives an edge in admissions to applicants who are the children or siblings of alumni.

The Kaplan survey confirms what has long been one of the worst-kept secrets in the college admissions world: Many colleges give admissions advantages to applicants related to people college officials believe can help the institution in some way.

Many college officials have defended the practice, noting that these comparatively few exceptions help them raise big donations and recruit powerful backers to do things like fund scholarships for smart but needy students.

But this age-old policy of “affirmative action for the rich” has also been criticized as one factor contributing to the continuing gaps between college graduation rates for the rich and poor, as well as ongoing economic inequality. (Colleges’ chintzy financial aid policies also worsen inequality, charges one high school principal.)

Even colleges that say they are “need-blind” in admissions—in other words, don’t hold a student’s need for financial aid against them when making admission decisions—aren’t wealth-blind. Many wealthy and generous private colleges, such as Duke University, set aside at least a few letters of admission for “development admits”—underqualified children of families whom the school’s Development Office fundraisers hope will make large donations, journalist Dan Golden documented in his book The Price of Admission.

Many public universities also bend the rules in favor of influential slackers. Investigators found that between 2005 and 2009, the University of Illinois admitted an estimated 800 underqualified students who were connected to politically powerful families, for example.

And the president of the University of Texas at Austin, Bill Powers, pressured his admissions officers to admit as many as 73 underqualified students from influential families in the last six years, a state investigation recently found. Powers defended his actions, arguing that the number of exceptions affected less than one-tenth of 1% of the student body and “served the best interests of the institution.”

Seppy Basili, vice president of college admissions and K-12 programs at Kaplan Test Prep, cautions ordinary applicants against giving up because of this “thumb on the scale” for a small group of “development admits” and “legacies” (children of alumni). “The overwhelming majority of accepted college applicants are successful due to their own merits,” he says.

(Get tips on how to get your application to the top of the pile.)

In addition, Basili noted that such programs are under increasing scrutiny, thanks in part to the growing transparency of admissions practices. An increasing number of students are using an obscure provision in a federal law to gain access to their previously secret admissions files.

MONEY College

Principal: Colleges’ Chintzy Financial Aid Offers Betray the American Dream

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Colleges and states are expecting students to take on an insane amount of debt.

Editor’s note: One of the nation’s leading public high school principals, a 2014 winner of the prestigious Harold W. McGraw Jr. Prize in Education, wrote this after viewing the financial aid awards sent by colleges to the seniors at his Philadelphia magnet high school. Two-thirds of his students at the Science Leadership Academy are minorities, and one-third are considered economically disadvantaged.

This year has been a fantastic year for Science Leadership Academy college acceptances. We’ve seen our kids get into some of the most well-respected schools in record numbers—and many of our kids are the first SLA-ers to ever get accepted into these schools.

Whether or not they are able to go to is another question.

Today, I was sitting with one of our SLA seniors. She’s gotten into a wonderful college—her top choice. The school costs $54,000 a year. Her mother makes less than the federal deep poverty level. She only received the federal financial aid package with no aid from the school, which means that, should she go to this school, she would graduate with approximately $200,000 of debt.

She would graduate with approximately $200,000 of debt—for a bachelor’s degree.

Now, how in good conscience could a college do that? I’ve sat with kids as they’ve opened the emails from their top choice schools. Watching the excitement of getting into a dream school is one of the real joys of being a principal. It’s just the best feeling to see a student have that moment where a goal is reached.

And as amazing as that moment is … that’s how horrible it is to sit with a student when they get the financial aid package and counsel them that the school just isn’t worth that much debt.

I sat with my student today and pulled up a student loan calculator. I showed her that $200,000 of debt would mean payments of $1,500 a month until she was 52 years old—and then we pulled up a budgeting tool so she saw how much she would have to make just to be able to barely get by.

(Are you in the same situation? Here’s how to negotiate for more aid.)

Then we looked at the state schools she’s gotten into, and we talked about what it would mean to be $60,000 in debt after four years, because Pennsylvania has had so much cut from higher education that Penn State is now $27,000 / year—in state, and we’ve noticed that their financial aid packages have dropped by quite a bit.

So we have to tell the kids to apply to the private schools because the aid packages the kids get from private colleges are sometimes significantly better than what the public schools are offering. Kids have to apply to a wide range of schools and hope. And then we sit down with kids and help them make sane choices, as the $60K a year schools send amazing brochures and promises of semesters abroad and pictures of brand new multi-million dollar campuses, all while promising that there are plenty of ways to finance their tuition.

(Check out Money’s lists of the 100 Best Private Colleges For Students Who Don’t Want To Borrow, 25 Most Affordable Colleges and the 10 Colleges With The Most Generous Financial Aid.)

Dear colleges—you are doing this wrong.

It doesn’t have to be this way. When I was a teacher in New York City even as recently as ten years ago, I felt that kids could go to amazing and affordable CUNY and SUNY schools if the private schools didn’t give the aid the kids needed. But Pennsylvania ranks 47th out of 50 in higher ed spending by state, and as a result, seven of the top 14 state colleges are in Pennsylvania.

And as private colleges hit times of financial crisis and public colleges become more tuition dependent, students are being asked to take out more and more loans, which is putting a generation of working class and middle class students tens—if not hundreds—of thousands of dollars in debt to start their adult lives.

The thing is—I still powerfully agree with those who say that a college education is a worthwhile investment. And on the aggregate, it is true – especially because the union manufacturing jobs of the last century have been lost. But when we look at the individual child, and the choices that kids and families are being asked to make, we have to ask how we can ask kids to take that kind of risk and take on that kind of debt.

Of course, all of this is exacerbated for kids from economically challenged families and for kids who are the first in their families to go to college. And if you are thinking about leaving a comment about kids getting jobs in college to help make it affordable, you show me the job market for college kids to make $30,000 a year while in school full-time. I must have missed those listings in the morning paper.

A college education can—and should—be a pathway to the middle class.

Colleges should have a moral responsibility to offer sane packages that don’t saddle students with unimaginable debt to start their adult lives.

Work hard, go to college, live a meaningful life. That is what we hear promised to children all the time from President Obama to parents across America.

Colleges and universities have to be honest and fair agents in that dream. Asking students to take out $30,000 and $40,000 of debt a year for access to that dream is a betrayal of the educational values so many of us hold dear.

Chris Lehmann is the founding principal of the Science Leadership Academy, a Philadelphia public high school. This story first appeared on his blog, Practical Theory.

MONEY Inequality

New Research Shows Education Won’t Fix Inequality

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Max Oppenheim—Getty Images

A new study shows giving more Americans a college education will help lower-income groups, but won't do much to close the income gap.

There is a growing acknowledgement that inequality is one of the most pressing national issues. President Obama certainly feels that way. In his State of the Union Speech this past January, Obama focused his speech around the issue, framing the debate as a question about the future of America.

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

Obama made no secret of his own position, or that education was his preferred method of closing the gap between rich and poor. His address centered around a number of policies that would increase college access for lower-income Americans, including a $60 billion proposal to make community college free for all.

But is education really the solution to inequality that it’s often presented as? A new paper from the Hamilton Project, co-authored by former Treasury Secretary and former Harvard University president Lawrence Summers, argues that the answer is no. Instead, the researchers assert, policymakers tend to conflate two separate issues: helping lower-income Americans become more financially secure and decreasing inequality overall.

Increased educational attainment across lower-income brackets would indeed result in higher income and more economic security for vulnerable groups, the paper finds. But so much income is concentrated among America’s richest citizens that a modest increase in earnings at the bottom end of the income distribution will barely make a dent in overall inequality.

To reach this conclusion, Summers and his co-authors—Hamilton Project director Melissa Kearney and visiting fellow Brad Hershbein—created a simulation in which one out of every ten American men between the ages of 25 and 64 without a bachelor’s degree suddenly graduated from college. (The simulation was restricted to men because less-skilled males have seen particularly steep drops in employment, earnings, and college attainment.)

“To be clear, this would be a tremendous accomplishment,” the researchers note. Creating this many new graduates would be “only slightly less than the observed increase in the college share over the entire 34-year period of 1979 to 2013.”

The authors then randomly assigned each of the newly credentialed Americans an income based on the earnings of actual graduates, and adjusted for the reduced premium a college degree would offer if more workers obtained one. 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.

Despite this significant surge in the earnings—the above increase would be “enough to nearly erase the decline in median earnings between 1979 and 2013, and cut the decline at the 25th percentile by one-third,” according to the paper—inequality barely budged. Under the simulation’s conditions, the Gini coefficient, a metric for measuring income inequality, declined from 0.57 to 0.55. For comparison, the Gini coefficient for the U.S. in 1979 was 0.43.

“Overall earnings inequality would hardly change—and would not come close to 1979 levels—if the share of working-age men with a college degree were to increase by even a sizable margin,” add the authors.

Why does more education attainment have such a small effect? The researchers find that decreasing the portion of the population without a college degree primarily helps those in the bottom 25% of earnings, raising their wages relative to higher income groups. Meanwhile, this scenario would do little to decrease inequality in the top half of the earnings spectrum, where most of the nation’s income disparity is contained.

The authors are clear to note that better access to higher education, whether it reduces inequality or not, is still an important goal. “Our nation should aim to increase the educational attainment and, more generally, the skills of less-educated and lower-income individuals because in the long-run, this is almost surely the most effective and direct way to increase their economic security, reduce poverty, and expand upward mobility,” the paper concludes.

However, the group notes, fixing inequality and growing the salaries of the less-educated are not the same issue, and won’t be solved by the same policies. “These are distinct, albeit interrelated challenges,” the researchers explain, “and the public discourse would be much improved if it stopped conflating them.”

TIME Innovation

Five Best Ideas of the Day: March 31

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Is the sharing economy opening the door for big business to abuse contract workers?

By Jon Evans in TechCrunch

2. With fins off many menus, scientists see a glimmer of hope for sharks.

By Ted Williams in Yale Environment 360

3. The Houthi rebels in Yemen are following the ISIS playbook and crowdfunding their revolt online.

By Vladi Vovchuk in Vocativ

4. It might be possible to create a non-meat burger that helps the environment and improves your health. But will it taste good enough to win over the masses?

By Corby Kummer in MIT Technology Review

5. Medicaid may not be a slam dunk for physical health, but it yields huge returns in quality of life.

By the Mailman School of Public Health at Columbia University

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Innovation

Five Best Ideas of the Day: March 30

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Blue-collar jobs are coming back, and pay well. But women are missing out.

By Mitchell Hartman in Marketplace

2. Ikea is known for affordable, flat-pack furniture. Now they’re selling the U.N. flat-pack refugee housing.

By Amar Toor in the Verge

3. With an eye on the White House, politicians won’t admit it, but the ethanol mandate is terrible policy.

By Josiah Neeley in the American Conservative

4. With billions in profits, tech giants must lead the charge against inequality in Silicon Valley.

By John D. Sutter in CNN

5. Can better customer service make primary medical care affordable and sustainable?

By Margot Sanger-Katz in the Upshot

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

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