The ’1 Percent’ isn’t America’s biggest source of inequality. College is.

The Washington Post ^ | May 22, 2014 | Jim Tankersley

[2ndDivisionVet]

One of the striking stories in the American economy over the last several decades is just how much the incomes of the super-rich have grown, compared to the incomes of everyone else.

But what if the focus on those super-rich - the top 1 percent of all earners - has overshadowed a larger, more troubling gap: the widening one between college graduates and workers whose education stopped after high school?

That's the argument MIT economist David Autor makes in a brief research paper out Thursday - that "the growth of skill differentials among the 'other 99 percent' is arguably even more consequential than the rise of the 1% for the welfare of most citizens."

By Autor's calculations, if you'd taken all the income gains that flowed to the 1 percent over the last 35 years and redistributed them evenly to everyone else in the economy, that would have delivered an extra $7,100 a year to every household in the bottom 99 percent. That's a lot of money. But it's not as much as the growing pay differential between workers who went to college and those who didn't.

In the last 35 years, he calculates, the so-called college premium - the boost in your paycheck from earning a diploma - increased by $28,000, adjusted for inflation. So if you took that entire increase and redistributed it to non-college workers, you'd be giving them a raise four times the size of the 1 percent redistribution....

[2ndDivisionVet]

Explain all the college graduates working at Starbucks & McDonalds or unemployed in mom's basements while college drop-outs own companies or make millions in sales.

[KarlInOhio]

By Autor's calculations, if you'd taken all the income gains that flowed to the 1 percent over the last 35 years and redistributed them evenly to everyone else in the economy, that would have delivered an extra $7,100 a year to every household in the bottom 99 percent.

Or you would have distributed an extra $200 the first year and absolutely nothing in years 2-35 after the top 1% goes Galt. The 100% end of the Laffer curve is a bitch.

[Captain Compassion]

The multimillionaires without college degrees are few when compared to those who are well off with colleges degrees in law, medicine, education, engineering, data processing or such. It's a matter of numbers.

CC

[zeestephen]

The problem is, there are more college graduates than jobs that require a college graduate.

Also, the further down you reach into the population pool, the more likely you are to find students who simply lack the intellectual skills or the self-discipline to benefit from a college education.

Increasing the number of college graduates is a “feel good” solution to a problem that does not have a solution.

I’m beginning to think an “income” tax on machines and computer software might be more fair than taxes on human beings.

[Jonty30]

Not everybody is suited for post-secondary learning the way it is structured. As a society, we would be far better off creating as many acceptable pathways as possible for people to acquire marketable skills.

[Jonty30]

The few notable ones who could do that are very few in number, compared to ones who have graduate degrees.

[2ndDivisionVet]

That's weird. I was a career counselor for about 20 years. I knew more millionaires without a degree than with. Especially in sales and entrepreneurship. The exception being highly technical sales and start-ups, but even there, many times the "money man" was a high school dropout, a HS grad or a community college trained individual. YMMV.

[Jonty30]

Not everybody can be a ringmaster. Some people are great assets to business, but need to be taught and others have good instincts from the beginning.

[Neoliberalnot]

We are looking at the average here, and more than that, we are looking at degrees in areas where there is a demand for skills in the job market. Much of higher education, is concerned with degree programs that are useless, low skill, feel good, degree programs. Degrees in hard sciences, engineering, math, medicine and the like pay well.

[Mariner]

The problem with these College stats is that the smart guys who learned a trade and started a business is in the same column as the ghetto denizen welfare mom.

Don't buy into this non-sense.

[Mariner]

There is not a Cisco CCIE in American making less than $150k/yr. And it doesn't even require a HS diploma.

Even IT Project managers make $100k without any formal educational requirements.

The tech business is built on non-graduates. And they're almost all doing quite well.