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America Has a Class Problem

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Michael Gerson wrote about "America's class problem" in The Washington Post on Friday. He was certainly right that we have a class problem but he seems to believe that improving educational opportunities is the sole step needed to solve the problem. If we don't do something about the low-wage vise in which tens of millions of people are trapped, we won't narrow the gap as much as we need to.

One quick detour because Gerson's opening salvo needs a comment. Gerson began with a swat at President Obama's proposal to end the Bush-era tax cuts for the wealthy. Of course Gerson owns a piece of the action there since he was Bush's speechwriter. Gerson's line was that the president's proposal on taxes is his "marginally counter-productive" response to a "severe, continuing labor market slump." Hogwash. That's not the point of letting the tax cuts on the rich expire. We need the revenue as part of a balanced approach to our fiscal mess. The president has proposed steps -- very modest ones in light of the current politics -- to create jobs, but his insistence on letting the Bush tax cuts on the rich expire isn't one of them.

Anyway, that was just for openers. Gerson's central point is better -- that America does have a class problem. It does. But he manages to evade the reasons, which include the fact that those at the top don't pay their fair share of the cost of running the country and, maybe even more important (but not unrelated) the fact that we are as a nation awash in a flood of low-wage jobs. Holes in the safety net, especially for single mothers and children, also contribute to inequality (particularly at the very bottom), but the heart of the problem is the structure of the labor market. In 2010, 103 million people had incomes below twice the poverty line -- below $44,000 for a family of four. That's a third of the population.

Why? Low-wage work. Half the jobs in the country pay less than $34,000, and a quarter pay less than the poverty line for a family of four. No wonder 103 million people live in families that have such surprisingly low incomes. Gerson calls for improved educational opportunities beginning with early child development, and that's all good. But markets have two dimensions: supply and demand. We certainly need to improve the quality of the supply and do that inclusively across the population. But until we pay attention to the incomes of working Americans (and of those without work), we'll continue to have the gross inequality that has been getting steadily worse for forty years. The inequality has two ends -- the outsized incomes at the top and the stunningly low incomes of tens of millions at the bottom. Try again, Mr. Gerson.