Inequality Matters Summary

Rubinson Lei

The essay of Inequality in American society.

In the “Inequality Matters” by Jared Bernstein and Ben Spielberg. They wrote that inequality affects the lower and middle income family. How inequality affects is that family are struck in poverty have less material that doesn’t allow them to realize their full potential. To address the hard problems of poverty or the inadequate of opportunity if people isn’t concerns about it and to boosting mobility will require the reductions in wage, income, and inequalities. In the article they wrote that inequality focus people on trying to redistribution and in mobility try to create ideas for more wealth creation. Many of our politicians and analysts would not address the inequality income

that most of the wealth is going highest income family. They focusing more on economic growth that can supposed to improve everybody at the same time. A body of research show a strong links inequality, poverty, and opportunity. There a study in Economic Policy Institute by Elise Gould reveals factors that cause poverty in Americans. Education, family structure, race, inequality, growth, and interaction among them the leading cause of poverty is inequality.

Jared Bernstein and Ben Spielberg also wrote that childhood family income and life outcomes are relate to each other. With socioeconomic status can hinders a child’s academic achievement. The family income of the child with low income can affect their mobility. In a research by Raj Chetty of Harvard and his colleagues link for every 10 percentile point increase during the childhood the income as an adult increase by 3.4 percentile. Another large, growing body of evidence reviewed by Katharine Bradbury and Robert Triest of the Federal Reserve Bank of Boston found that the inequality of outcomes directly connects to inequality of opportunity. They also found significant, negative relationship between livings in an area with greater income inequality and children’s expected upward mobility. They wrote about that there a fundamental difference between the findings and Cowen, Rubio, and other people believe that America can address poverty without addressing inequality. They also noted that the rising inequality implies came from income and wealth generated by GDP and productivity growth increasingly to the top. This means fewer resources would go to the lower people. Fewer income going to the lower

income family means less able to spend for the children’s futures. When they go to college they might be indebted and they are most likely to be stuck in neighborhoods that lack opportunity. The children will also face a lot of stressors that can do a lot of damage to their educational and earnings outcomes. Research also indicates pathway for lower income family that inequality constrains their opportunity. One of the effect that inequality affect lower class is the residential segregation. The neighborhoods of families’ concentrated wealth and poverty have more than doubled between 1970 and 2009 while the middle-income neighborhoods have declined from 65 percent to 42 percent. Now there are more high poverty neighborhoods it also means a lasting disadvantages for those who are living there. One studies in order to fix the problem is to relocates families with kids younger than 13 years old from a high to a low poverty neighborhood this will allow kids to achieve better academic and economic outcomes later in life. Another effect is that inequality leads to an unequal access to quality educational experiences throughout a child’s lifetime. The growing inequality have increase that in 1995 families with education debt in the lower half net worth distribution have mean deb to income ration around 0.26. It means every dollar that they makes they owed about a .26 cent in their incomes. For richer families that is in the top 5 percent the ratio is eight cents on the dollar. By 2013 the debt to income ration changed for the lower income in the bottom half of the economy class. The debt doubled to a 0.58 cent while it remain the same for upper class people. They wrote again in the articles that as inequality widen the gaps between rich and poor families with low income have less options to enrichment goods. They also have less extensive and privileged social networks, and they mostly likely face a “toxic” stress that can affect brain development, academic, health, and economic outcomes. Inequality entrenches immobility by unequal transfers of wealth but a number path affect opportunity on a regular basic. This inequality affect how rich and poor children score very differently on school readiness tests before they reach kindergarten because of the big gap of inequality between the rich and poor. People in the political ignored the reality inequality. Even though they want to help the poor but they are busy trying to repeal an estate tax and writing a budgets that gut the safety net. They makes policies that restrict mobility for both upper and lower class. It also make it worse for the lower class, while the rich gain more privilege of being rich, and eliminating revenue sources for investments that help lower class people and, shorten the gap of rich and poor. The reason they put up all these policies up is because they were nudged by wealthy donors. The lack of opportunity is not a separate problem of inequality distribution of wealth and income across society that lower and middle class face a disadvantages while upper class have a lot advantages. Barbara Sard and Doug Rice want to eliminate the barriers of moving to a low poverty areas by having detailed a number of changes so people would have the benefits of moving out high poverty areas. They want to balance the educational playing field by the proposal in 2013 from the Center for American Progress by making pre-school free for low income family’s children and partially fund for higher income kids. The council of Economic Adviser suggests that the economic gains, higher tax revenues, and lower public cost would be beneficial and, offset the cost in the long run.

Through they need to fund increases as the overall state and local per pupil funding has declined in 35 states since 2007. Another evidence that college enrollment and completion can be boosted by improvements in Pell grant awards and eligibility. While these things are important less income means inhibits mobility even with educational are take into account that they will unlikely to move up in class. It important to have policies that address inequality and poverty by boosting income of low and middle class family for better mobility. One way to do this is by having safety-net programs like the Earned Income Tax Credit, Supplemental Nutrition Assistance Program are good for long terms effect that will help the children in the future. Inequality and immobility are intimately linked that we need to reduce the former in order to also reduce the latter. It means to attack immobility we also have to attack inequality. Wealthy Children are most likely to die wealthy because they get inherit a big wealth their parents left behind. This is a problem and a concern. It a problem because most of the

wealth that wealthy children inherit doesn’t go back to society. Even they could use a lot of the money in their life it wouldn’t be like half the money they own and they would left it to their children and the cycle would continue and, the money would accumulation over time. One way we could improve social mobility is to have programs to help people with mobility and increase income, and the rich would donate their money to help people. Another way to help is to have a certain percent the government can take on certain people after their death.