Fed Chairman Jerome Powell and other top policymakers need to stop blaming educational differences for rising income inequality.
ising perceived returns to education cannot explain the runnaway spike in earnings at the very top, or stagnation for the rest.
Rather economic policies aimed at suppressing labor unions, regressive tax policies that favor the super wealthy and the rise of tax havens to where the rich can shield their cash from taxation are among the factors aggravating inequality. As long as Powell and other key policymakers overlook that reality, they will continue to say there is nothing the Fed and other institutions can do to address the issue of inequality. More proactively combatting money-laundering and other white-collar crime, which is totally within the Fed’s purview, would seem like a solid start.is stashed away in tax havens.
"Despite its great popularity and intuitive appeal, this story about recent wage trends driven more and more by a race between education and technology does not fit the facts well, especially since the mid-1990s," wrote Gould in blogpost. "The growing inequality of note is that between the top and everyone else. The pulling away of the very top cannot be explained by education differences, but rather the escalation of The chart below illustrate the phenomenon—educational attainment has clearly not been a major contributor to rising inequality.
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