Monday, January 6, 2014

The Atlantic: RIP, American Dream? Why It's So Hard for the Poor to Get Ahead Today

In honor of the 50th anniversary of the War on Poverty, this is an The Atlantic article by Matthew O'Brien that everyone should read. Although many anti-poverty programs (e.g., Head Start, Medicaid, Upward Bound, VISTA, etc.) still exist today, the United States in the last thirty years has become a nation where the gap between the rich are getting richer and the poor are being left behind. This is truly sad because the middle class is also feeling the crunch. The cost of necessities (food, housing, transportation) continue to increase. Wages and salaries has not kept up with inflation since the 1970s. Even a college degree alone does not guarantee that the poor can obtain upward social mobility. We need a domestic Marshall Plan to revitalize the middle class and our underserved communities.

Inequality is breeding more inequality. It's a story about paychecks, marriage, and homework. Now, it's not entirely clear why the top 1 percent have pulled so far away from everyone else, but there's a long list of suspects. Technology has let winners take, if not all, at least most, in fields like music; deregulation has set Wall Street free to make big bonuses off big bets (and leave taxpayers with the bill when they go bad); globalization and the decline of unions have left labor with far less leverage andshare of income; and falling top-end tax rates have exacerbated it all. But high-earners aren't just earning more today; they're also marrying each other more. It's what economists romantically call "assortative mating" -- and Christine Schwartz, a professor of sociology at the University of Wisconsin, estimates inequality would be 25 to 30 percent lower if not for it.

Marriage is widening inequality today, and keeping it wide tomorrow. Well-off couples get married more, stay together more, read to their children more, and otherwise have more time and money to spend on their children's education. As the New York Times points out, economists Richard Murname and Greg Duncan have found that high-income couples have poured resources into the educational arms race at a prodigious pace the past generation. For one, the amount of time college-educated parents spend with their kids has grown at double the rate of others since 1975; for another, high-income households invested 150 percent more in "enrichment activities" for their kids from 1972 to 2006, compared to a 57 percent increase for low-income households.

UPDATE [January 8, 2014]: Fifty years ago, President Lyndon B. Johnson introduced his plan, the War on Poverty, in his State of the Union address in January 8, 1964. The national poverty rate was 19 percent in 1964. His War on Poverty project created Medicare, Medicaid, a permanent food stamp rpogram, Head Start, Volunteers in Service to America, and the Job Corps. Since 1964, much remain the same -- the national poverty rate hovers around 15 percent. The New York Times' Room for Debate has a discussion on whether the United States needs another War on Poverty. Six experts, ranging from research institutes to non-profit organizations, debate the issue. Watch the six-minute speech below:

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