Most recent discussion about economic inequality in the United States has focused on the top 1 percent of the nation’s income distribution, a group whose incomes average $1 million (with a bottom threshold of about $367,000). “We are the 99 percent,” declared the Occupy protesters, unexpectedly popularizing research findings by two economists, Thomas Piketty and Emmanuel Saez, that had previously drawn attention mainly from academics. But the gap between the 1 percent and the 99 percent is only half the story.
Granted, it’s an important half. Since 1979, the one-percenters have doubled their share of the nation’s collective income from about 10 percent to about 20 percent. And between 2009, when the Great Recession ended, and 2011, the one-percenters saw their average income rise by 11 percent even as the 99-percenters saw theirs fall slightly. Some recovery!
This dismal litany invites the conclusion that if we would just put a tight enough choke chain on the 1 percent, then we’d solve the problem of income inequality. But alas, that isn’t true, because it wouldn’t address the other half of the story: the rise of the educated class.
Since 1979 the income gap between people with college or graduate degrees and people whose education ended in high school has grown. Broadly speaking, this is a gap between working-class families in the middle 20 percent (with incomes roughly between $39,000 and $62,000) and affluent-to-rich families (say, the top 10 percent, with incomes exceeding $111,000). This skills-based gap is the inequality most Americans see in their everyday lives.
Conservatives don’t typically like to talk about income inequality. It stirs up uncomfortable questions about economic fairness. … Liberals resist talking about the skills-based gap because they don’t want to tell the working classes that they’re losing ground because they didn’t study hard enough.