In [David Autor's] paper, “Skills, Education and the Rise of Earnings Inequality Among the ‘Other 99 Percent’,” comes as something of riposte to French economist Thomas Piketty, whose bestselling “Capital in the 21st Century” has ignited sales and conversation around the world with its historical look at the fortunes of the top 1%.
Mr. Autor estimates that since the early 1980s, the earnings gap between workers with a high school degree and those with a college education has become four times greater than the shift in income during the same period to the very top from the 99%.
Over the past 30 or so years, the earnings gap, the paper claims, between households with and households without college-educated workers grew "from $30,298 to $58,249, or by roughly $28,000." Autor, a Massachusetts Institute of Technology economist, then attempts to put the nail in this sorry coffin with:
During the same period... 99% of households would have gained about $7,000 each, had they realized the amount of income that shifted during that time to the top 1%.
What is this really about?
It's an unrefreshing remix of a stale Schumpeterian argument conservatives have made about the root inequality in the US: It is about skills and education, and not about the rich just getting richer. Meaning, those at the bottom of society would do better (get rich even) if they kept up with the continuous technological revolutions that keep capitalism going strong. They are poor because they do not have the right stuff—the will and commitment to increase their skills, level of education, or to adapt appropriately to new market conditions. In short, poverty is the fault of the individual (the star of neoliberal ideology) and not the structure of capitalist economics. Piketty points to and easily dismisses this argument throughout his book.
Indeed, Piketty spends several pages on and frequently returns to a passage in Balzac's 1819 novel Le père Goriot, where a villain named Vautrin explains to a law student named Rastignac, that the real path to great wealth is not hard work and education but marriage. You must marry into money if you want to make it in this society. Piketty then points out that in the 19th century (which comes to an end in 1914 with World War I), this was very much the truth. Inheritance mattered more than an education, talent, and will.
Now, here is one of Piketty's main arguments in the book: After the disruptions of the great wars in Europe, Vautrin's advice to the law student less and less reflected reality in capitalist societies because a large amount of wealth was redistributed (by a reconfiguration of tax laws and the establishment of a number of social institutions) from those at the very top to those in the middle. However, this redistribution process began to lose steam around the late-70s. And from the 80s to this day, we have seen (according to evidence in tax records) a reversion to a world where Vautrin's advice again holds true. So the moment of social democracy and the rise of the middle class (particularly, white middle class—black Americans where handed "a bad check"—to the use the words of MLK) is appearing like an anomaly, and the state of things in the 19th century to be normal.
The right hates Piketty's book because it is dry and direct. The facts on growing inequality in the US and Europe are presented as they are. As for the paper by the MIT economist? One can only laugh at the argument that the real inequality in our society exists between those who are stuck earning $50,000 and those who are stuck earning $25,000. To get more out of this laugh, let's watch this video of Neil deGrasse Tyson on Bill Gates’ wealth...
I will be discussing Piketty's book on June 10 at Vermillion Gallery. Please join me and other lovers of this great work.