Education Does Not Explain Growth in Inequality
Federal Reserve chairman Ben Bernanke on CBS's "60 Minutes."
On 60 Minutes Sunday, Federal Reserve chairman Ben Bernanke was asked about rising income inequality in the United States. Curiously, The New York Times thought his response would appeal to liberals. From theTimes:
When asked about rising inequality in the United States, Mr. Bernanke offered a response that was likely to be embraced by liberals.
“It’s a very bad development,” he said. “It’s creating two societies. And it’s based very much, I think, on educational differences. The unemployment rate we’ve been talking about. If you’re a college graduate, unemployment is 5 percent. If you’re a high school graduate, it’s 10 percent or more. It’s a very big difference.”
Is this true? Of course liberals would be pleased that Bernanke acknowledges that inequality is a moral and economic problem. But would they agree with his diagnosis of the cause? Partially—certainly education affects one's earning potential enormously in a service economy—but