Earnings-based Inequality
I suspect getting an education is a doorway to higher income. I do believe it is one part of it. Field of endeavor, base degree and advanced degrees, and salary play the parts I am aware of today. Then, how good are you in your field and can you be replaced easily.
The article corresponds with my own experience partially. I left the Corps in 1971. Went to work in 1971.Found, I was not going to get paid much and was in a hostile environment. After a few months, told the company (ITW) I had enough of this experiment and went to college. Jan was the money-maker as a trained paralegal. I worked part time at the Bensenville Home for the Elderly. I was a maintenance person and also cut the grass on a thirty-acre lot.
Going to college did have a payback. Over decades, we were comfortable. We did not have invested and owned capital along the lines Paul Krugman discusses.
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The old, earnings-based inequality
Today’s Paul Krugman: “The latest Inequality,” America was never as middle-class a society as people wanted to believe. We did, however, emerge from the Great Compression that took place in the 1930s and 40s — a dramatic reduction in inequality reflecting both the policies of the New Deal and the effects of World War II — with a relatively flat income distribution by historical standards, a situation that continued until around 1980.
Starting in 1980, inequality began rising rapidly. There are a number of ways to measure inequality. The most popular measure among economists is the so-called Gini coefficient, but I dislike that measure because it’s not obvious how it translates into real-world observations. I prefer to look at income accruing to different classes, such as the share of income received by the top 5 percent of households.
By this measure and every other measure I’m aware of, including the Gini, U.S. inequality rose sharply after 1980. This inflection point corresponds, probably not incidentally, with the election of Ronald Reagan. However, many measures of inequality leveled off around 2000.
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We were ok in the scheme of things as shown by Paul in his chart.
I most certainly did not make it to the top 5% in income. More likely I was in the top 20%. after several degrees from good schools. Good enough so I could retire on my own funds and SS. Going to the right universities can pay off for many, A more technical degree in an obscure and difficult field, etc. helps. Playing the politics can make more difference than performance and saving your boss’s ass multiple times.
I suspect there is a bit of all I have mentioned in general that gets people to the top.