Income inequality, a challenge or an opportunity?

Jerome Powell, Chairman of the Board of Governors of the Federal Reserve Board, was quoted recently in calling income inequality the biggest challenge in America over the next decade.  Personally, I think the biggest challenge occupies an oval office at present, but that's a different topic for another day.  Powell was quoted in the Washington Post as saying "We want prosperity to be widely shared." He followed up with "We need policies to make that happen."  He did not exactly define who "we" are, but fortunately it seems he meant other government agencies, not the Federal Reserve.  The Fed's job is not social engineering, thankfully, but rather influencing money, credit and interest rates in such a way as to provide a reasonable balance among the competing goals of income/output growth, full employment and the rate of change in price levels in the American economy.

Didn't income inequality exist 100 years ago?  I think so. Won't it exist a century from now?  I hope so.  Income inequality should motivate those on the low end of the income scale to take steps to improve their incomes. And if those at the high end did not have to defend their incomes and assets by taking all sorts of steps to offset income taxes as much as possible, they could spend even more time being successful, including the creation of more jobs for those farther down the income scale.  Rather than decrying income inequality, therefore, this nation's policy leaders should work to identify not only its causes but also its effects, including its benefits. Causes such as the tsunami of changes in technology over the last 30 years and how those changes have disrupted labor markets, enabled outsourcing to explode, eliminated jobs and raised the bar for hiring of trained and skilled workers.

 I could argue too that by creating an American culture that presupposes every high school graduate needs to earn a four-year college degree, or attend a community college in a two-year program at a minimum, we have done perhaps millions of young adults a disservice.  Many graduates of those programs have limited job skills at best, depending on the quality of their education and the nature of their studies, or major fields of interest.  Not all fields pay well or even have plentiful job opportunities, so in many instances students in those programs graduate with dim employment prospects (in good jobs) but mountains of student debt (mountains versus the molehills of job skills they possess).  For far too many college graduates their first words upon entering the job market are "Now what?" For students earning an education beyond high school but freely choosing fields offering little to enhance their job skills, should public policies "fix" this situation?  No.

The "fix" should be to change the public perception of community college and four-year college educations being essential for everyone in this country.  I think it is wrong to view young men and women as somehow inadequate or  as failures because they did not continue their academic education beyond high school.  When I desperately need a plumber, or electrician, or roofer after a storm, or heaven forbid, a handyman, I don't want to call a history or philosophy major.  I want someone who attended a school to learn a skilled trade, and for as long as I have been a homeowner (almost 50 years) I have found the supply of those skilled workers is far below the demand for them.  Hence, they are relatively high-income jobs.  Lower income workers and recent high school graduates should be motivated by knowing millions of others are earning higher incomes, and so can they if they apply themselves. We need many more skilled workers in this country, need to promote trade schools, and build more of them to accommodate society's needs in the future.  I am not ignoring the need for more individuals trained in robotics or marine biology, because those sorts of educational pursuits do lead to higher-paying jobs and need less promotion than does plumbing, etc. One more point.  Jobs in the highly skill trades are not easily outsourced or even replaced by technology.

If perchance America did wake up to its needs for more plumbers and electricians and fewer poorly motivated, debt-burdened college graduates in fields without great job or income prospects, one might fear a shortage of teachers and mentors for the education and training of skilled tradesmen and women. It's a misplaced fear, however.  America is bursting at the seams with senior citizens, this country's most undervalued and underutilized national resource.  Not happy sitting around, many have become volunteers, mentors, caregivers, counselors and teachers, in this country and overseas.  We already call on many senior citizens to work with children and youth at risk, the homeless, and others unable to get ahead by themselves. Let's expand those efforts and marshal their skills and wisdom in a nationwide effort to match them with young adults seeking training in skilled trades and technology.  We should pay the senior citizens to take these opportunities to give of themselves to future generations because the value of what they will accomplish is great.

Back in my childhood, when America was still the land of promise, the operative term was "equal opportunity" and over time many obstacles to equal opportunity were broken down.  Today, instead of being dedicated to breaking down even more barriers to equal opportunity, far too many of our nation's leaders are pursuing goals designed to achieve equal outcomes.  The theory must be that those who want more income (as opposed to a higher-paying job) should be given more, with those extra dollars coming from successful consumers and businesses who worked hard, saved money, invested it in themselves to better themselves, saved even more rather than going drinking with their buddies, and took great advantage of America as a land of (equal) opportunity for all.  It's a horrible theory and should be ended as a practice.

 Heaven forbid, if ever America achieved the goal of equal outcomes for all. I daresay we would have become a dispirited, disgruntled and disgraced nation, facing a bleak future, no longer a super power.  No longer a country I want to live in,  so if I can't afford to move or live elsewhere can I petition the Federal Government to pay for me to move and cover my living expenses while I earn my college degree in Ireland? If the government turns me down I might be forced to attend a skilled trades program and earn those dollars myself!  What a novel concept...