Thursday, November 11, 2010

The Great Divergence

Part Two:

Most discussion about inequality in the United States focuses on race and gender. That makes
sense, because our society has a conspicuous history of treating blacks differently from whites
and women differently from men. Black/white and male/female inequality persist to this day.
The median annual income for women working full time is 23 percent lower than for their male
counterparts. The median annual income for black families is 38 percent lower than for their
white counterparts. The extent to which these imbalances involve lingering racism and sexism or
more complex matters of sociology and biology is a topic of much anguished and heated debate.
But we need not delve into that debate, because the Great Divergence can't be blamed on either
race or gender. To contribute to the growth in income inequality over the past three decades, the
income gaps between women and men, and between blacks and whites, would have to have
grown. They didn't.
The black/white gap in median family income has stagnated; it's a mere three percentage points
smaller today than it was in 1979.3 This lack of progress is dismaying. So is the apparent trend
that, during the current economic downturn, the black/white income gap widened somewhat. But
the black/white income gap can't be a contributing factor to the Great Divergence if it hasn't
grown over the past three decades. And even if it had grown, there would be a limit to how much

It is possible to argue that the black/white wage gap grew worse during the past three decades, for instance by factoring in blacks’ higher incarceration rate and lower participation in the job market. It has also been shown that, within income groups, blacks enjoyed less upward mobility during this period than whites. But the Great Divergence is a phenomenon that’s measured according to family (“household”) income, so in examining whether black/white income inequality contributed to it, I’ll consider only the 30-year change in black family income relative to white family income. And that change is nonexistent.

impact it could have on the national income-inequality trend, because African-Americans
constitute only 13 percent of the U.S. population.
Women constitute half the U.S. population, but they can't be causing the Great Divergence
because the male-female wage gap has shrunk by nearly half. Thirty years ago the median annual
income for women working full-time was not 23 percent less than men's, but 40 percent less.4
Most of these gains occurred in the 1980s and early 1990s; during the past five years they halted.
But there's every reason to believe the male-female income gap will continue to narrow in the
future, if only because in the U.S. women are now better educated than men. Ever since the late
1990s female students have outnumbered male students at colleges and universities. The femalemale
ratio is currently 57 to 43, and the U.S. Department of Education expects that disparity to
increase over the next decade.
Far from contributing to the Great Divergence, women have, to a remarkable degree, absented
themselves from it. Take a look at this bar graph by David Autor, an MIT labor economist:

The graph demonstrates that during the past three decades, women have outperformed men at all
education levels in the workforce. Both men and women have (in the aggregate) been moving
out of moderately skilled jobs—secretary, retail sales representative, steelworker, etc.—women


more rapidly than men. But women have been much more likely than men to shift upward into
higher skilled jobs—from information technology engineer and personnel manager on up
through various high-paying professions that require graduate degrees (doctor, lawyer, etc.).
These findings suggest that women's relative gains in the workplace are not solely a You've-
Come-a-Long-Way-Baby triumph of the feminist movement and individual pluck. They also
reflect downward mobility among men. My Slate colleague Hanna Rosin, writing in the Atlantic,
recently looked at these and other data and asked, "What if the modern, postindustrial economy
is simply more congenial to women than to men?"
She might have asked the same about the modern, postindustrial family. The declining economic
value of men as Ward Cleaver-style breadwinners is a significant reason for the rise in single
parenthood, which most of the time means children being raised by an unmarried or divorced
mother. The percentage of children living with one parent has doubled since 1970, from 12
percent to more than 26 percent in 2004. Conservatives often decry this trend, and they rightly
point out that children who grow up in single-parent homes are much likelier to be poor. "Single
mothers seldom command high wages," confirmed David Ellwood and Christopher Jencks, both
of Harvard's Kennedy School of Government, in a 2004 paper. "They also find it unusually
difficult to work long hours." But it would be difficult to attribute much of the Great Divergence
to single parenthood, because it increased mostly before 1980, when the Great Divergence was
just getting under way.5 By the early 1990s, the growth trend halted altogether, and though it
resumed in the aughts the rate of growth was significantly slower.6
Also, single parenthood isn't as damaging economically as it was at the start of the Great
Divergence. "That's mostly because the percentage of women who are actually working who are
single parents went up," Jencks told me. In a January 2008 paper, three Harvard sociologists
concluded that the two-thirds rise in income inequality among families with children from 1975
to 2005 could not be attributed to divorce and out-of-wedlock births. "Single parenthood
increased inequality," they conceded, "but the income gap was closed by mothers who entered
the labor force." One trend canceled the effects of another (at least in the aggregate).
While we're on the topic of single versus two-parent households, perhaps we ought to consider
what a "household" is.
Stephen J. Rose is a labor economist at Georgetown best-known for publishing, since the 1970s,
successive editions of Social Stratification in the United States, a pamphlet and poster much
revered by the left that depicts economic inequality in the United States. In his recent bookRebound, Rose made an apparent 180-degree turn and argued that worries about rising income
inequality and a disappearing middle class were overblown. Rose built his case largely on the

By 1980 the proportion of children living with one parent was already 20 percent.
The especially worrisome trend of teenage births peaked in the early 1990s.

notion that the Census Bureau's preferred metric—"median household income"—was
The trouble, Rose wrote, was that households varied greatly in composition and size. A
household might consist of a single young man just starting out on his own or an elderly widow
in retirement. Neither would likely enjoy a high income, but that would be a function of mere
circumstance (the young man was just beginning his climb up the greasy pole; the retired widow
no longer worked at all) and need (neither was likely to be responsible for any children). Another
problem, Rose suggested, was that some households were bigger than others. Couples tended to
have larger household incomes than single people, but that was because they likely collected two
paychecks rather than one. The proportion of Americans living alone had for various reasons
increased over time; that needed to be taken into account, too. Correcting for all these factors,
Rose calculated that median household income was 30 percent higher than the Census' official
figure (about $50,000 in 2007).
That was the good news. The bad news was that even with these new calculations, Rose couldn't
deny the existence of a Great Divergence. "Under all circumstances," he wrote, "inequality has
risen considerably, and this is a bad thing for America. Those at the bottom of the income ladder
have benefited only minimally from the significant gains in overall production over the past three
Back, then, to the drawing board. Conventional liberal and conservative explanations about what
ails society can neither explain the Great Divergence nor make it go away.

How many of you actually get this or understand? I have seen so many follow and believe ridiculous people and their stories. I cannot believe the majority of our nation could actually be so naive, I refuse to believe it.
Some people prefer to compare median weekly incomes because women are more likely to take time off over the course of the year, but weekly incomes followed a near-identical trend. Among part-time workers, women now enjoy a higher median weekly income than men. This is mainly because female part time workers tend to be older than male part-time workers.
The usual suspects are innocent

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