page_title: Winner-Take-All Politics
section_title: Debunking the "educational cause"
hierarchical_section_title: Winner-Take-All Politics / Themes / Debunking the "educational cause"
caption_attribution_description: English: Share of pre-tax household income held by the top 1%, top 0.1% and top 0.01% in the United States
context_page_description: Winner-Take-All Politics: How Washington Made the Rich Richer—and Turned Its Back on the Middle Class is a book by political scientists Jacob S. Hacker and Paul Pierson. In it the authors argue that contrary to conventional wisdom, the dramatic increase in inequality of income in the United States since 1978—the richest 1% gaining 256% after inflation while the income of the lower earning 80% grew only 20%—is not the natural/inevitable result of increased competition from globalization, but of the work of political forces. Those at the very top of the economic ladder have developed and used political muscle to dramatically cut their taxes, deregulate the financial industry, keep corporate governance lax and labor unions hamstrung. Instead of a rising tide lifting all boats, the authors write, "yachts are rising, but dinghies are largely staying put" in America, and "there is reason to suspect that the dinghies are staying put in part because the yachts are rising."
context_section_description: "Most economic experts" agree that the 30-year trend in America of greater inequality is a natural economic/historical trend of economic rewards for those with educational achievements and workplace skills. The authors do not. The income distribution hasn't followed a pattern of "the 29% of Americans with college degrees pulling away" from those who have less education. It's the top 1% that have pulled away from the top 20%, and most especially "the top 0.1% or even 0.01%" that has grown richer than the rest of the population.
  Nor has this rise in inequality taken place in many other developed economies. Western Europe and Japan, "haven't seen anything like the rise in inequality America has." Inequality in France and Switzerland has actually fallen; in Germany it's remained the same; and in Ericsson's Sweden and Sony's Japan it's moved up only slightly.
  The relative lack of skill of American workers can't be blamed, as there isn't one. There is no gap between American workers and those of Europeans, Canadians, et al., measured in years of schooling.
  America's more extreme stratification has not come with any benefit of faster economic growth or more social mobility than its peer countries. Economic growth per capita was essentially the same in the US as that of the 15 core nations of Europe through  2006. America's self-image as the land of the American Dream and rags-to-riches success notwithstanding, the share of those brought up poor or middle class who succeeded in becoming rich (i.e. the social mobility), is now less than in almost all other developed countries.
  Two areas related to income distribution where the US differs quite a bit from other developed countries are executive pay and unionization.  Unions as a whole have been a force for raising pay and benefits for those with lower income. The percentage of workers belonging to unions has had a marked decline in the US not mirrored in other affluent countries such as America's neighbor Canada, despite a similarity in the "structural features" of the two countries economies and their workers' "propensities to join a union."
  Increase in the relative pay of CEOs in the US — from 24 times the earnings of the typical worker in 1965 to 300 times in 2007 — is much greater than in Europe. It takes a different form than those countries — deferred compensation, "guaranteed hours on corporate jets, chauffeurs, personal assistants, apartments, even lucrative consulting contracts". (This "camouflaged" compensation need not become public knowledge as American business law does not require its reporting.)
caption: Share of pre-tax household income received by the top 1%, top 0.1% and top 0.01%, between 1917 and 2005.[12][13]
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