Stiglitz: US No Longer the ‘Land of Opportunity’

Tuesday, 19 Feb 2013 09:40 AM

By Dan Weil

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Most people like to think the United States has a level playing field for opportunity, but nothing could be further from the truth these days, says Nobel laureate economist Joseph Stiglitz.

“Perhaps 100 years ago, America might have rightly claimed to have been the land of opportunity, … but not for at least a quarter of a century,” he writes in The New York Times.

“Today, the United States has less equality of opportunity than almost any other advanced industrial country.”

Editor's Note: Startling Proof of the End of America’s Middle Class. Details in the Video

Just 58 percent of Americans born into the bottom 20 percent of earners rise above that slot, according to the Brookings Institution.

What’s behind this trend?

“Probably the most important reason for lack of equality of opportunity is education: both its quantity and quality,” writes Stiglitz, an economics professor at Columbia University.

The rising inequality in income distribution has led to a widening education gap, Stiglitz notes. The educational achievement gap between rich and poor children born in 2001 was 30 to 40 percent larger than for those born 25 years earlier, according to Stanford sociologist Sean Reardon.

Stiglitz’ solutions:

• Ensure mothers aren’t exposed to environmental hazards and receive necessary prenatal care.

• “Reverse the damaging cutbacks to preschool education.”

• Provide proper nutrition and healthcare to children.

• Give more money to poor schools.

• Make higher education more accessible to the poor and middle class.

One element of the equality issue that now occupies center stage is the minimum wage. In his State of the Union address last week, President Barack Obama proposed raising the floor to $9 per hour from $7.25 currently.

Peter Schiff, CEO of Euro Pacific Capital, thinks that is a bad idea. “It’s not going to lift the wages of workers,” he tells Yahoo. “What it’s going to do is diminish employment opportunities.”

So what can be done?

“We should completely abolish the minimum wage,” Schiff says. “We didn't have a minimum wage for most of American history.” The minimum wage began in 1938. “It was a bad idea, and we ought to admit that it was a bad idea,” Schiff says.

Editor's Note: Startling Proof of the End of America’s Middle Class. Details in the Video

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