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Parenting a Lead Factor in Income Inequality

God's economically successful plan for the family.

It's no secret that the gap between the rich and the middle class has grown over the last decade. The rich are getting very, very rich while the poor and middle class are–while not worse off–certainly no better. (Depending on your time frame, however, the poor actually are doing worse.)

This graph shows the average annual income of the top one percent earners in 2005 was more than $1 million, while the middle 60 percent is just above $50,000 per year. That compares with the $500,000 the top one percent earned just ten years before, versus an average income of just below $50,000 for the middle 60 percent. In other words, while the top one percent doubled their income, the middle 60 percent only modestly improved.

More striking is that the average income of the bottom 20 percent seems not to have moved in the last 25 years. Factor in inflation, and the bottom 20 percent is doing much worse. (Women too, it seems, haven't done well. But instead of making less, they're just staying home. And interestingly, feminists are making arguments for doing so.)

There's plenty of debate over why the income of the top earners has so vastly outpaced that of everyone else. It's tempting to argue that the top one percent is making its money off the backs of those less well off. And America, being the nation of individualists it is, has been generally content to allow the rich to get much, much richer. Plus, globalization has brought millions of new laborers into competition with those already in developed economies.

But another argument seems compelling. New York Times writer Tyler Cowen summarizes it this way:

The reason is supply and demand. For the first time in American history, the current generation is not significantly more educated than its parents. Those in need of skilled labor are bidding for a relatively stagnant supply and so must pay more.

Technological change has put a premium on workers who understand, can manage, and can profit from such advances. According to this argument, education–not abuse by the rich–makes the difference between advancing in the economy or falling behind.

But the difference between the educated and the un-educated is not a matter of wealth but of upbringing. After all, the poor can value education as much as the rich, and often do. And, education is not simply a matter of IQ, according to James Heckman, a professor at the University of Chicago and Nobel Laureate. Heckman says in his paper "Schools, Skills and Synapses" (available for download here) that "the workplace is increasingly oriented towards a greater valuation of the skills required for social interaction and for sociability." These skills are taught in the home, Heckman says.

Heckman makes no argument for marriage support programs or other family-supporting policies. In fact, he says the state, for economic reasons, should intervene early in families deemed to be unable to nurture well-educated (in terms of IQ and sociability) children. Yet, his analysis could be used to support traditional, Christian views of the family. "Those born into disadvantaged environments are receiving relatively less stimulation and resources to promote child development ... [Statistics show] the dramatic rise in the proportion of children living in single parent families. The greatest contributor to this growth is the percent living in families with never married mothers."

But, Heckman says, having two parents–even wealthy ones–isn't enough for healthy child development. "The proper measure of disadvantage is not necessarily family poverty or parental education. The available evidence suggests that the quality of parenting is the important scarce resource. The quality of parenting is not always closely linked to family income or parental education." In other words, there's no inherent reason that children who grow up with wealthy parents, or well-educated ones, should become wealthy themselves.

Unfortunately, more American children are growing up under "disadvantaged" circumstances. And this is having a negative impact on the American economy, because these children, even if they have high IQs, don't have the social skills for success. "A greater fraction of young Americans," Heckman says, "is graduating from college. At the same time, a greater fraction is dropping out of high school."

Churches could use Heckman's paper to argue for a different kind of social ministry, one that emphasizes parenting skills as much as poverty alleviation. Also, it shows once again, that the soft patriarchy model of the family is quite good for all involved. But, to me, it mostly argues that God had it right when he created male and female to be fruitful and multiply.

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