Study of Los Angeles: Prosperity increases income inequality

Study of Los Angeles: Prosperity increases income inequality

th_one_percenter_bigCoverage of income inequality is shockingly slanted and inept. Lazy, populist demonization of the 1 percent is the standard default starting position for explaining why poor people make a small fraction of what the very wealthy do. But as I’ve written for CalWatchdog before, there are a lot of much more solid reasons for what we’re seeing. They’re obvious and easily documented:

“When you set aside the class-warfare rhetoric that Democrats so enjoy, the drivers of income inequality are plain. The first is rarely acknowledged. It’s the increasing tendency of highly educated professionals to marry each other. Doctors used to marry nurses. Now they marry other doctors, concentrating family wealth.

“The second is that the modern economy places an ever-higher premium on job skills, and yet we don’t have a public education system that responds to this fact. In 2013, how is it possible that a year or more of computer science isn’t a universal high school graduation requirement?

“It’s not just information-technology jobs going unfilled because of a mismatch between what schools teach and what employers need. In many skilled-job categories — welders, critical-care nurses, electrical linemen, special-education teachers, geotechnical engineers, respiratory therapists — unemployment is practically zero.

“So long as we have an absurdly complex tax code in which the amount that the very wealthy pay depends on the skill of their tax attorneys, the Occupy argument that the U.S. is rigged to help the rich will resonate with some. But this doesn’t address the disconnect between what our schools teach and what our economy needs.”

Liberal think tank: Higher job skills more rewarded than ever

logo_brookings.gif_.axd_Now the most venerable liberal think tank of all — the Brookings Institution, the one a Nixon aide wanted to firebomb — has released a study of big-city income inequality that makes some of the same points. This is from the L.A. Times’ write-up of the study:

“Los Angeles has one of the highest levels of income inequality in the nation, but that’s due in part to a relatively strong local economy that’s stoking the fortunes of higher-income people, according to a new study.

“Of the 50 largest U.S. cities, L.A. has the ninth-highest level of income disparity, according to the analysis by Brookings Institution, a Washington think tank. …

“Inequality has become a flash point nationwide as the wealth of top earners surges while the middle and lower classes grapple with stubborn income stagnation. Politicians have clashed loudly on what’s driving the dichotomy, and what steps, if any, should be taken to reverse it.

“The study found, however, that rising inequality may simply be an unavoidable byproduct of robust local economies that plump the incomes of coveted workers.

“Fast-growing industries with highly paid employees — such as technology, finance and entertainment — tend to cluster in large metropolitan areas, said Alan Berube, a Brookings researcher who specializes in inequality. And the ongoing gentrification of many cities, such as in downtown Los Angeles, is drawing wealthier people.

“At the same time, big cities also draw large numbers of low-income people seeking lower-skilled jobs.”

Needed: a much smarter and more focused education system

joel-kotkinJoel Kotkin, the shrewd Los Angeles Democratic futurist, points to the best approach to income inequality in his piece last week in New Geography:

“A pro-growth program today could take several forms that defy the narrow logic of both left and right. We can encourage the growth of high-wage, blue-collar industries such as construction, energy and manufacturing. We can also reform taxes so that the burdens fall less on employers and employees, as opposed to those who simply profit from asset inflation. And rather than impose huge tuitions on students who might not  finish with a degree that offers employment opportunities, let’s place new emphasis on practical skills training for both the new generation and those being left behind in this ‘recovery.'”

The problem facing this approach in California, alas, is that the state’s education status quo has fierce guardians. They don’t want sweeping change because it would cost many CTA and CFT members their jobs.

And given that the CTA and CFT are by far the most powerful forces in the state, this is an immense problem for those who want to do something more constructive about income inequality than tampering at the margins with pseudo-solutions like raising the minimum wage.

 

13 comments

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  1. Queeg
    Queeg 23 February, 2014, 07:43

    Trees, weeds and bushes grow, so we need lots and lots of gardeners…..you know….keep em dumb.

    Of course, a $80,000. school teacher needs their yard manicured too by one of these exploited $20,000. gardeners.

    Income inequality?

    Nah!

    Reply this comment
    • Donkey
      Donkey 23 February, 2014, 09:16

      The Chicago way, the LA way, the fascist way, the communist way, the RAGWUS way, this is the democrat way you write about Queeg, and it’s the wrong way!!

      Let freedom ring again, destroy the RAGWUS before it’s too late!! 🙂

      Reply this comment
  2. Steve Mehlman
    Steve Mehlman 23 February, 2014, 13:04

    Of course the WalMartization of America–eliminating full time jobs, cutting pay and benefits, etc.–has nothing to do with the increased income inequality. LOL

    WalMart has this slick TV ad about how it is spending $250 billion on job creation. Yet it refuses to pay its current employees enough to keep them off food stamps and other forms of public assistance.

    Only care about the bottom line. That’s the Donkey way. And it’s the wrong way!

    Reply this comment
    • Donkey
      Donkey 23 February, 2014, 17:25

      The cost of government, (pay, pensions, and benefits), is one of the reasons pay is so low in the private sector. The RAGWUS is stealing the wealth of the nation using its inside connections to commit fraud on the private sector taxpayers, not unlike is happening in the Ukraine at this time. 🙂

      Reply this comment
  3. Ronald Stein
    Ronald Stein 23 February, 2014, 18:56

    Government actions resulting in over regulations on businesses, over taxation and uncontrollable fees are contributing to the middle class becoming an endangered species as the inequality has deepened. The results are that consumers are paying for over regulations to businesses.

    Extra costs resulting from government actions on businesses are a slight inconvenience to those making the big bucks such as those making the big bucks. Those behind the over regulations, over taxation, and uncontrollable “fees” on businesses are mostly the highly compensated, and most with sweet defined retirement benefit packages waiting for them upon retirement, i.e., those that CAN afford the higher costs that trickle down to all citizens for products and services.

    Those that earn less than $20 per hour, which includes virtually all those in the food and hospitality industries, are the ones that can least afford higher costs for power, transportation fuels, and food. There is minimal impact to those that can afford the results of our relentless business unfriendly efforts, but little hope for those that barely exist at today’s cost of living.

    How will the political environment explain to the middle and poor classes why over regulations and more costs being imposed on businesses is helping to improve the inequality of the middle class that has been growing rather than shrinking?

    Reply this comment
  4. Queeg
    Queeg 23 February, 2014, 21:44

    You have really been bitter this past week Donkey.

    Did you get rejected for a good and stable government job?

    Reply this comment
  5. Steve Mehlman
    Steve Mehlman 24 February, 2014, 11:21

    Shhhh! Don’t wake him from his delusion. He’s comparing the greedmeisters of our country to the Ukrainian patriots who are bringing down their government and kicking Putin in the butt. If the Ukrainians were over here, they’d be called Occupy.

    Reply this comment
    • Donkey
      Donkey 24 February, 2014, 13:54

      No, they would be against the power wielded by statist bureaucracies and the RAGWUS feeders that exist off the private sectors labor. If you would have listened to the protesters they are against their freedom destroying government. They are not after free cell phones, an EBT card, or free medical, they want freedom from their RAGWUS crowd. 🙂

      Reply this comment
    • Donkey
      Donkey 24 February, 2014, 20:25

      Get out and earn your own wealth then SM, and stop stealing it from the taxpayers!! 🙂

      Reply this comment
  6. Queeg
    Queeg 24 February, 2014, 20:30

    Donkey……decorum please…..your frustrations are becoming more intense……many poor people work very hard and are amazing people……hard work is to be honored….government worker, GED cops, immigrants.

    Reply this comment
  7. SeeSaw
    SeeSaw 24 February, 2014, 21:39

    Nobody is pointing fingers at the banks either are they? The tellers are all part-time, when they used to be full-time. I know many part-time government workers, in my locale, who are working 39 hours per week, with no fringe benefits. When we see what is happening all over the rest of the world right now, we need to be grateful for where we live, and concentrate on being good citizens. If there is something we don’t like, we need to get out and vote to change it. People in the public sector are there because the public needs to be protected, and the public needs infrastructure. Calling them names is useless and stupid!

    Reply this comment
  8. Ulysses Uhaul
    Ulysses Uhaul 24 February, 2014, 23:42

    See Saw….

    Best comprehensive positive post in months…..heartfelt and personalized.

    Great work!

    Reply this comment

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