Dream Hoarders: A Book Talk with Richard Reeves

name is Maureen Conway I am vice president for policy programs at the Aspen Institute and executive director of our economic opportunities program really delighted to have you today to uh to join us to talk with Richard Reeves about his his new book I hope you saw them for sale outside uh dream quarters how the middle upper how the American upper middle class is leaving everyone else in the dust why that's a problem and what to do about it um as the economic opportunities program we we work to advance promising policy strategies and ideas to help low and moderate income Americans connect to opportunity and thrive in today's changing economy and as part of that work we run this working in America Series in the Working America series we've we've talked about a wide range of issues affecting working Americans today we've brought a variety of different people and perspectives to these conversations people from business from labor leaders from different communities across the country Educators journalists philanthropists policy makers and others to talk about the issues that they see affecting working Americans today and what are some ideas for addressing these issues we've covered a variety of topics from minimum wage to technology new forms of work Child Care paid leave and more if you are just joining us I welcome you to go browse our website at as.pn slash working in America and you can see our previous events um on that note that means we are also recording today's event so please do be mindful of that and please do silence your phones but you are welcome to tweet about today's event and our hashtag is talk good jobs um today's conversation we have the opportunity to uh to to talk about a bigger picture idea around the state of the American dream and if we think about the American dream you know really this is a good fit for our working in America series because the American dream really very much relates to work right it has this idea of if you work hard you achieve the American dream and the theme throughout our working in America conversations is what will it take working in Americans to support themselves through their work and to feel confident that the American dream is still open and available to them uh so I'm so this book uh when I first saw it I I uh I I emailed Richard right away and I said would you please come chat with us about it because I think that this would be a really terrific fit for so many of the issues that we've been uh talking about so thank you so much for joining us and welcome and uh just uh one more note of thanks before I start I do also want to um thank our funders for this uh working in America series we're so grateful to uh the Prudential Foundation to the Ford Foundation to the Walmart Foundation into the certain Foundation who are great thought partners and supporters of our work here and we could not do this without them um so Richard Reeves is a Brookings institution senior fellow in economic studies uh policy director of Brookings Center on children and families and editor-in-chief of its social Mobility memos blog and he also teaches a bit at Georgetown there's more information about him in the bio in your materials uh if you'd like to learn more about them but uh thank you so much for joining us today and welcome thank you um and so let's start let's talk about about this book uh this book by the way it's a great book I've written all over mine so I do uh highly recommend it um why let's just talk about why why did you write it uh well maybe you could say a little bit about why you wrote it why you framed it around this American idea American dream and what that ideal actually means to you and how that brings you both well uh the first thing to say is I think it's probably because I'm a new American um uh so that that's probably obvious too by now if you didn't already know it that I come from I come from a country that knows a bit about social class uh and I kind of grew up uh actually kind of very aware of the role of class in the society that that I was in um before I go any further though whenever I see an audience of this size where I would still need to ask people whether any of you are here thinking you're going to see the other Richard Reeves [Laughter] half of you and three of you been brave enough to kind of saying so uh you are free to leave without any any shame whatsoever completely understand happens to me it happens a lot on the other hand if you stay sometimes the people who came thinking they're going to hit the other Richard Reeves ended up buying my book so who knows we do occasionally get mistaken for each other in in ways that are very often humorous which we can get into but if there's time so I grew up uh in the UK I'm now a U.S citizen uh and I work on issues of inequality and intergenerational Mobility the the American dream if you like uh and uh in a way there's a bit of a personal side to the story which is because I grew up sort of so aware of class and actually talk a bit about this in the book which is that my mother who left High School very early was from a from a rural background uh used to threaten us growing up with elocution lessons we call them electrocution kind of funny because we grew up in a working class town and we're starting to drop our teas we're starting to say computer and butter and better and of course she thought I was wondering how you said to do without a priority is really hard and I said that and actually literally just all the color drained from her face and she also uh so she was she didn't actually then do that but she was very concerned about it went to a very ordinary high school and ordinary town she wanted us to be able to rise and thought that how we spoke or what Fork we used um words together right or whether we could dance so she made us go to ballroom dancing lessons so I spent a miserable year of my life every Saturday morning learning how to dance to do a waltz I've still got a decent chatter for those who want to try me because again she was convinced that we're going to get some job and there was going to be a work a work event an aspen Institute dance uh it's Waltz properly it was going to mean you didn't hire me uh that would be it you know um welcome no you can show up at our dances I was just I was just at home last weekend I was in the UK and the Observer published an extract of my book which mentioned the ballroom dancing thing my mother said I never made you go to ballroom dancing lessons I said yes you did I vividly remembered no no I didn't so we ended up rummaging through the boxes in my old bedroom to find the certificates for level one waltz or whatever so I had the evidence that she did in fact do it and I spent my whole life trying to escape from that in my policy work and all the work I did kind of in government and now on think tanks was really kind of kind of against the rigid the rigidities of a class-bound society a society where we know too much about where you are going to end up given where you started from and then moving to the US and discovering go through my research but also through my kind of personal uh observations that's the class system in the US operates um in my view every bit as efficiently as the one in the UK in many ways more efficiently more ruthlessly efficiently and especially at the top and especially when it comes to protecting the status of the upper middle class those at the top of society but it does so under a veneer of classlessness so unlike the UK that's saturated in class Consciousness we're constantly calibrating people's class position here there's this kind of sense of it's a meritocracy it's classless you know and then I look at the zoning the way you Zone your neighborhoods the way you fund schools the way school admissions works the way the tax subsidies work I mean and then I look at the perpetuation at the top that looks like a class Society to me that looks like a society where social class is doing kind of a lot of work and then there was kind of particular moment which we may get onto when President Obama tried to take away one of our precious tax breaks and that was the light bulb moment for me it's like okay I have to write about these people and by these people I meant me and almost everybody that I know so so you are you are an American now you are a citizen and so maybe you now also call yourself a middle class or upper middle class I I appreciated that you gave us the more palatable upper middle designation and although although your headline writer outed us as rich rich in the New York Times but I mean you know you sort of framed this this in the book a little bit as as really it's it's it's not just about the top one percent right there's so many people who are in fact rich or upper middle class um who aren't really cognizant of their advantages so so talk a little bit about how you see you know what is it that you see in your research that sort of shows you these class divides and just characterize a little bit you know sort of what you see in the data about about what these class divides look like and and how they've emerged over time so obviously class is a very malleable concept and as you've said you know people you were in the US most people Define themselves as middle class which makes it kind of uh even a harder concept to grasp which is why I think upper middle class is a better way to think about it because it kind of breaks out the group of the top 15 or 20 at the top uh it's not just about economics it's about education it's about family it's about all kinds of things but just to focus on income for a moment um my reading of economic trend and but why I say my reading of economic Trends I mean my reading of Gary burtle's reading of economic Trends or other colleagues reading of it is that really the actions towards the tops hasn't been much really any increase in income inequality in the bottom 80 in the last 30 40 years so the kind of the shape of the of the income so it looks broadly similar today for the bottom 80 as it did before but then you start to see this pulling away happening at the the top quintile top 20 and then of course as you get more towards the top you can see it gets stronger the elastic stretches kind of even more but if you're looking for a point at which say from about 1980 onwards when we did see this increase in economic inequality where in the distribution does it take place and it's not just at the 99th percentile so it's not just that we are the 99 story you can point to the top one percent and see this huge stratospheric gains usually have to change the left-hand axis on your chart of course uh which makes it look even more dramatic um and so and it's that's certainly true although there's quite a lot of movement in and out of that top one percent of course and it's not a fixed group like any of these none of these groups are fixed but also actually the the top fifth have done pretty well so they may not have done as well as the top one percent but if you're looking for a kind of group where's the line between the people that have kind of been doing progressively better it is I think much broader than the top one percent it's not to say there's an issue of the top one percent I mean I've been criticized for being ex-colatory of the top one percent and that's not the case if you read the book I think there's a lot that we can do to tax it on one percent more rate and so on and I'm very worried about the influence of money in politics although it wasn't my subject but I think that it's just too easy to only look up I think it's too easy for someone a 95th percentile if somebody's on you know 250 000 a year or you know income whatever to just say I'm not rich it's those people up there that are rich um and I think I quote the statistic in the book a third of the people on one of the Occupy Wall Street um March has had six figure uh earnings and so what that means is you've got a bunch of people who are by any kind of reasonable definition the income distribution doing pretty well and I think increasingly well over time but have been convinced one way or the other that that actually it's just the rich the other problem and they are never Rich themselves and in a way that's an abdication because then that allows them to just constantly say yes which attacks the rich more but I'm not rich and that just keeps happening all the way up the distribution and I think that to the extent that we've tried that as a political strategy it hasn't really worked and so I think it's time for a more honest conversation about the fact that there are more people than just the top one percent doing pretty well and that's as I say that's my interpretation of roughly where you see this fracture Point uh taking opening up in the income distribution so 1980 around is roughly where you characterize the fracture Point happening and just say I mean we can probably debate this and people do to beat this for every reason why this happened but maybe just say a couple of things that sort of stick out for you as to why that's the point or what was going on that that we started to see this divide then sure and again I'm always conscious to look around the room that there are other people in the audience who study this more closely than I do but uh the sort of shorthand I use in the book is wages and wives um and what I mean by that is that the increase in earnings inequality is a big part of this story around the increase in income inequality most people still get most of their income through earnings and so if you see this kind of increase in the earnings distribution which we do with those at the top particularly those as college education so I'm doing quite well and pulling away that's obviously almost inevitably going to have an effect on the household income distribution but then the wise point is that we've now see with the massive expansion in women's education and with Rising earnings for women still not on a par with men but nonetheless significantly higher than they were 30 40 years ago what we then you can see is this is not just one college graduate in a household but it's two partly through the process that's very unromantically labeled a sortative mating by a sociologist which is a tendency of people to marry people like themselves and so you're going to put all those factors together which is you've now got women as well as men who are kind of college educated and well earning and earning well and an increase in earnings inequality put them together and I think that that accounts for a significant amount of the increase in income inequality yeah well at least you didn't say we were utility maximizing in our dating so yeah people have said that though um so I so you and I think one of the things you know on this sort of family structure thing I think one of the things that you also sort of usefully do in the book is is you distinguish between this idea of dream hoarding and good parenting um and you know and I think that's sort of the way that we you know I think I think that this is an important distinction to sort of paint the picture up a little bit as we get into sort of the the what we you know why do we have this problem with what are good behaviors and what are maybe less good behavior yeah it's one of the things that I've struggled most with uh in the book and in my thinking about this generally which is where is that line between wanting to do the best for your kids and wanting people to want to do the best for their kids and to be rewarded and praise for doing so um and a point at which you're using your position your economic or social or political position to in a sense rig the contest in your kids favor and so it's one thing to want your kids to do well in the contest by helping them prepare well for it it's another to just leave nothing to start rigging rigging it so an analogy that I use because someone told me you have to use sporting metaphors in the US I don't know if that's true in this room but um I can't contrast a uh a parent as say a father for the purpose of the arm a father who helps his daughter to get on the softball team by practicing every night with her um after after work throwing the ball at her there's probably a better word for it than that but uh so I'm not I'm not fully American yet but pitching pitching and so as a result she gets really good at pitch catching uh or whatever and gets on the team all right I got something yeah thank you thank you thank you easier than I thought thank you thank you get us on the team and you say great good parenting invested in it lots of skills Etc gets on the team fair and square then you get another parent that gives the coach a hundred dollars uh and says okay here's a hundred dollars can you get my daughter on the team as a result what she gets on the team even though she's not really good enough to get on the team we have a hugely different moral response to those two stories certainly um very good for the first bad for the second why because that's not fair because they've used their economic position but the parents given something up in both cases time in the first place money in the second place um they've wanted a good outcome for their kids which is to get on the baseball team but actually what you think is no no because the parents who can't bribe their thing or doing it's wrong to bribe their way into it so it's a it's a extreme example but it's a way to have a thought experiment about that there is a line there is just because a line is difficult to draw about when good parenting blurs into opportunity hoarding doesn't mean a line doesn't exist and that line is in different places at different times in different societies so we know it can move and in particular the social norms around certain kinds of behavior like the bribing one no the societies where people would say it's fine if you've got a hundred dollars that's okay right not here now but maybe it was here maybe it will be okay here in 50 years or whatever maybe your kid having a step a head start getting into a college because you went there through Legacy preferences that was okay in the UK in the early 20th century it's definitely not now it's still okay here even though it wasn't okay here in the 19th century so you see how these kind of the social norms about what's acceptable does change and I'm just trying to get us to just personally as much as politically just think really hard about where those lines are and at what point we stop yeah and one of the things I was thinking about with where what changes those Norms is you know back to sort of what we were talking about earlier in terms of the widening divides right so if you think about sort of being a parent and you know raising your kids to be the best that kids they can be and hopefully going out and getting a job and getting a job that will you know earn a good living and there's a shrinking set of jobs that actually earn a good living and so now if I if I fall that fall is so much for further right I think you know maybe that moves the incentive structure to think about well you know when I'm trading off my bribing the coach versus my child will never have a bad you know have an opportunity in life like right like maybe maybe I feel okay about right because my first responsibility is to take care of my kids yeah so how do we how do we how do we think about you know sort of the incentive structure that these widening runs rungs set up it's a great question I think there's a point about incentives is an important one and it's one of the ways I think the income inequality relates itself to these kinds of uh these sorts of mechanisms because if you do have growing income inequality and in particular in the US between the top and the middle uh then it looks like a long way down if you also have a society where money really matters a lot for Access to Health Care and education and so on then the costs of having less money obviously higher and so if you're a parent as I am and you're looking at it and you're looking and you're at the top it doesn't doesn't look great down there for your kids and so if if you think that if you come to fear the fall I mean no one's going to be in favor of downward Mobility maybe we'll get on to that spectacularly unpopular idea um uh although I'm in favor of it as I say in the book I just haven't decided which kid yet I think I think I think I know you know who you are um but uh the so the idea of It kind of it's difficult but I think to some extent actually if you have this uh fear that's going to be a long way down and the stakes are so high that's what I observe is that upper middle class parents feel like the stakes are very very high when the stakes feel very high you in you're very highly incentivized to do pretty much anything and everything particularly if everyone else is doing it to ensure your kids don't fold put a glass floor underneath them to kind of make sure they don't kind of come down that if it's successful will mean the inequality will increase further we'll have less intergenerational mobility and if inequality increases further then you're incentives to make sure your kids don't fall or get even greater and if they get even greater you'll work even harder to do it and if you're also there and so then you're in a day really a real Vicious Circle wearing where the incentives to hold opportunity and income inequality kind of Ratchet up together and you obviously want to tackle that both both sides but it does seem to me it's a reasonable thing to say let's lower the stakes a bit let's make the fear of the Fall a bit less maybe that'll take a bit of the heat out of this because it does feel as if people feel like the stakes are very high indeed they shouldn't be that high right you know dropping a few quick dropping a couple of quintiles shouldn't feel like the end of the world but it really does yeah it really it really it really does and I think that this is a huge problem and I've had um and we can talk about this downward Mobility because they've had this same uh conversation with people that it seems like you've had where where everybody wants to talk about how do we how do we encourage upward mobility and how do we how do we help people at the bottom move up and then you say well it's the people at the bottoms up that means somebody at the top has to move down that's just sort of the mathematical that's supposed to say that bit yeah that's when they change the subject now every politician you have to do that with so but a number of politicians and you do that if you're doing relative Mobility you do the quintiles or moving people up and you say look how many people are stuck at the bottom and how few make it to the topic that's terrible we've got to hugely increase the number of people moving up into that 20 you say great you have a policy discussion you say of course that means that more people will come out if we're falling down and they go what what better people that vote for me um so from a relative point of view that's true of course if you've got more absolute Mobility if you've got more if people are getting better off more generally a that lowers the stakes around it because even if you fall in relative terms you're still doing pretty well by comparison to your parents and you're creating more room at the top I think given current growth trajectory I'm not confident we're going to get a huge absolute mobility in the next few years um but it does it is it is a necessary fact that a kind of a healthy society that has you know movement and will have to see movement in both directions and then the question is if there isn't as much downward Mobility as you might like in order to see more upward Mobility then look at why it's happening and if it's happening through means that are perfectly fair and honorable then that's one thing if you start to think that some of it's a result of systemic and structural inequalities and some rigging of the system in favor of those kids then that's a different story so I want to before I before I to someone like you to think about um this question of you know essentially kind of pull it together a little bit about why is this a problem for all of us right not just right why is why is this dream hoarding a problem not just for the people who can't access the dream because we're hoarding it but why is it a really kind of a problem for all of us kind of looking to our future economy and Society well I mean I can give you I can give you this little standard answer and then the honest answer if you want um when the standard answer is like it's in all it's in all our benefit to have a more mobile Society lots of that would Mobility will get more economic dynamism because there'll be more people incentivized to grow and we'll have entrepreneurs at the top and and so on and in the long run that will benefit even those of us at the top um because even if I we don't do quite as well in the short run in the long run they're partly more successful economy well okay that might all be true and it's what everyone tends to say the more honest answer is that I'm not sure that some of the things I think we should be doing are necessarily in the self-interest of the upper middle class at the top I think they can quite plausibly say things look pretty good for us actually and we'll keep all our tax breaks and we'll keep in our neighborhoods and we'll we don't like it out there and it's not clear to them to us that necessarily giving more up and helping the bottom eighty percent isn't quite interest actually um so yes we can make standard arguments but I think at some point you've got to start saying look actually this is partly about expecting people to do things that are not necessarily immediately in their own self-interest for the greater good because it's the right thing to do or maybe because they're afraid of their kids falling right so maybe it comes back to this point about risk if you if you have more risk you'll do that but actually I'm I think the conversation needs to move on now to a more an honest one which is look rather than doing this usual thing it'll benefit us all everyone's going to be better off it's win-win-win-win-win it's if I say you know what it doesn't always work like that sometimes social change does require some people to give up a little bit to lose a little bit and right now that's us yeah and and and is there also a timing thing right so it can it we can hang on to our advantages for a while but is that really sustainable well I don't know uh I mean what is it President Obama said his administration was the only thing standing between said to Wall Street then you and the pitchforks um and so there is an argument that you know at some point you know some of the basic economic and social and political infrastructure of a society won't won't be sustainable uh with those levels of inequality and that will be bad for all that will be bad for all of us and the pitchforks a lot of people think that they're going to be wielding the Pitchfork they might actually be on the sharp end of them um you know that we are the 99 thing might not turn out to be as true as they think and interesting I think a lot of the anger you see now that's propelled some of the populism recently it tends not to be at the rich actually it tends to be a kind of professional upper middle class you know uh folk that's that's where my interpretation it's not it's it's drawing on other people's work of course is that you know it's a kind of quite a class-based thing against kind of that that particular group rather than necessarily the rich as such who still in some ways are still unhelpfully rarefied by uh you know by Americans yeah so let's get into a little bit of some of the things you talk about as both kind of where this happens and and where we might make improvements in our systems and one is sort of around human capital development right then and when I say human capital development probably most people think education but you also before and we will definitely get into education and back to some of the issues you've already touched on um but the other thing you also talk about is is Health right um and parents of course a big role in keeping their children healthy and and being able to be healthy is important in terms of being able to be a productive contributing member of society um so so and yet we're seeing some of these divides influence Health as well and so can you say a little bit about sort of um how we're divided not only in economic terms but in health terms and maybe offer some ideas on what might we how should we think about our health policy questions maybe a little differently than we do I think we think about them too individually like Health as a consumer good but so I'm not sure I'll be able to I don't feel confident enough probably to answer the policy okay questions of it again um give my limits but I I think that the health inequalities we see are both symptom and cause of some of these kind of class inequalities that we see and again and work with Barry Bosworth and Gary actually have done on life expectancy is very I think life expectancy is a really good kind of a way of looking at what's happening and you do see increased Cloud inequality by class uh income background Fastback by for life expectancy people living kind of much longer that has huge implications of course for the progressivity of the Social Security and social security system and all kinds of other things it changes the equilibrium if that carries on that's a good sort of symptom um but you also see the because health is a form of human capital and Gary Becker about that um the uh those of us who are in the upper middle class our kind of kids invest quite heavily in our health and it makes sense to do that because actually all Investments are making in other forms of human capital like education really make most sense if you think you're going to live a long time or you're going to be healthy enough to enjoy the fruits of it you know and so actually it makes perfect if you don't have an education you probably still want to live a long time right now yeah but if you're just being I didn't say utility maximizing before but it is actually you know it's it is it is true that you know in terms of the return you're going to get on your investment in yourself in terms of being healthier then that's going to be higher for someone who's higher earning and who's living longer whereas if you're earnings are much lower anyway then actually to this extent the incentives around Health are kind of lower I do think it comes back to the risk point and I said I'm not going against policy because the US is Bonkers on Health Care policy uh as is the UK by the way from completely different ends of the spectrum you know God forbid you touch the National Health Service in the UK it doesn't matter how right-wing you are Thatcher couldn't touch it basically but here he's got the opposite problem um but I do think that this idea this risk thing right where's the risk how at risk am I I'm not I'm a HealthCare coverage how at risk are my kids not having healthcare coverage and to the extent that it that the risk uh profile also follows class lines I think that does have implications for health policy and I'm very interested in issues of risk around education and health and so on and the way that actually those of you in a person who can actually insulate ourselves and our kids pretty well for a lot of risk it's not that we don't have those risks we do but boy can we insure ourselves against them in one way or another whereas others are kind of you know genuinely afraid and that and then you know you now see you're worried about the risk of going to college people are really worried about health insurance I I think you can I used to believe you knew ever you could tell everything about America from the movie Jerry Maguire and there's a there's a scene in there where she goes with him to form his new agency the first thing she asked in the elevator is will you have health insurance and as a European you're watching that what's she talking about isn't she asking will you have health insurance but of course as if you're a worker in America particularly in the middle you're really worried about that yeah but great okay well let's talk about education uh because you'd spend a lot of time talking about education you talk about education both as the as the I mean I I feel like you talk about education both as the system for us opportunity hoarding and as well as sort of we have this idea that it should be the a more the opportunity to to to show your merits um and it but it doesn't work that way yeah but I think you also have ideas on how it can be better but let's first talk about what what are the how is that this the system by which we're opportunity hoarding right now well I think we should start by saying that human capital skills have become more important right that's fill in the usual stuff you'd expect someone to say after that right if you're having a longer debate about human capital so education therefore matters more quality education matters more it matters from the from very early in life it matters parenting in the very early years you see kind of much more engaged and intensive parenting at the top of the distribution obviously it matters through K-12 and it definitely matters in post-secondary and there's this idea I think Horace Mann's quote that education is the great equalizer the balance wheel in the social Machinery great equalizer it's a great idea I'm a bit more with my Georgetown colleague Anthony Carnivale who describes the college system in the US as a an engine of inequality uh not necessarily it's not done in a malicious way but the way that K-12 was organized and funded and in particular the way that we stratify the post-secondary education system it does actually serve to kind of cement those inequalities and the US is very unusual in the world in being a society where the gaps by social background at 12 at 12th grade aren't any narrower than they were at K most other places in the world can at least go some way towards closing those gaps because we've got the kids then right so you'd think you'd think public policy would do something then it doesn't really work in the US actually the UK is not great either it comes out pretty much the same as it went in and then the post-secondary system takes the inequality that's given and magnifies it because of the kind of way that there's a sorting so four-year selective colleges 70 of the kids are from the top 20 and then you see kind of very significant under investment by comparison in community colleges which I think like the Cinderella of the opportunity system I think um aching for more investment and higher quality teaching plus the whole admissions process around higher education the complexity of funding system it's a nightmare and I say this is a kind of new new American with a kind of High School junior it's a nightmare and of course complexity and opacity tends to be the friend of the upper middle class it tends to be the friend of those of the education and resources to understand the complexity and navigate their way through it so you kind of get to understand that the ACT is better than sat for that school there and if you play that Sport and you apply there and you do that and like it's like eight dimensional checks uh College admissions process in the US right and so if you know how to play it you can really play with it but for people who don't have those resources they're looking at this system that's just bewildering and you end up just going to the local place because that's where everyone else goes and you had a huge under matching plan so the very complexity of the higher education system in the US is a problem even before we get to the way it's financed and the subsidies that go through Ferris tax breaks to very you know very rich private institutions um I think that money would be much better spent on helping develop the human capital of those in the bottom 80 rather than the top 20 yeah I could ask you many questions about this uh so but I'm just going to start with with one because you've talked about it so much which is Legacy um legacy admissions I mean shouldn't they just be against the law and do you think that there's a legal challenge that has any China there was a legal challenge but it was a terrible challenge uh it was by someone who probably wouldn't have got in anyway uh you know outstay it was very complex uh there are there are legal Scholars who who really think a decent challenge would work and there have been isolate cases because Texas A M had to get rid of theirs on Race grounds actually because in practice Legacy preferences have significant racial consequences um you know you have to think about it for two seconds to think why that would be the case um and so there is not there are various arguments about it Georgetown has the obvious example georgetown's a very example yeah georgetown's now trying to correct that with the um the thing with the slaves that built the college um but it's very interesting this because it's quite a trivial issue in a way and people like say to me well that won't really change very much it's not like a poor kid something at that place or that kid or that person denied it so it seems like it's quite trivial and symbolic well in that case if if it really doesn't matter most why not get rid of it uh it seems that you could turn the triviality objection on its head uh and it seems to be it's like a tip of the iceberg issue it's a bit like a system that's not even pretending to be meritocratic uh you know if you if you're allowing a hereditary principle to operate in your admissions process and it seems to me that all bets are off in terms of everything else it's very hard to persuade people at their early admissions criteria or the way they do Financial Merit Aid or the tax subsidies were unfair if they still think the Legacy preferences are okay so it seems to me that you know if I can't if we can't at least agree that that's not a good idea then lots of the other kind of much deeper reforms that are needed will will be much harder to achieve and candidly also as a new American it's a national embarrassment to have a hereditary principle uh operating in quality I mean it just really it really it really is and people hate me for saying it and it doesn't matter if you're liberal right then people just this really gets people upset I've discovered this is this isn't this makes maybe even more unpopular than some of the other things I say um but I'm just really are we really going to say that that's okay because it just it should just go it just just go so so agreed is that I mean I mean because I think about that and I think about the schools that have Legacy preferences and I think about getting an education at those schools ensure they have a very high quality education but they have a lot more than that right I mean they have their networks they have their alumni networks and the other thing that you talk about and it's so interesting is sort of how uh because I hadn't really thought that much about it before but how people are so attached like almost this tribal attachment to their alma mater and where they went to school and and you know I mean is is that part of it and is that and also surfacing that is that part of what we should understand about the ways in which our education system is is sort of perpetuating the the divides rather than being a more American yeah I think well that's certainly one of the criticisms I had and I actually toned down the section on Legacy preferences as a result of colleagues reading it um so it's that's soft version um and one of the things is that I as a new American I can't claim to fully understand the tribal loyalty of the Americans feel to their colleges the closest I can get soccer teams in in the UK you know the stickers the whatever and so there's something to be said for like we're a Clemson family or whatever right and so I I I I don't because I can't fully understand it I think it's important for me to sort of just put that out there and say so I may be missing something quite important here and you might say look with private institutions if private institutions want to operate hereditary principle and they think it will help alumni giving which I don't think it does really um quite a bit but it does very much all because it's important Larry Summers said it's important to the kind of institution we are it adds to the you know what does that means ask Larry but but something about the feel of the you know what they said about we're creating the class you know they said we're kind of creating the freshman class and it's a mixture of athletic ability and some legacies and you know it's like we're I'm like you're not it's not a museum um it's an educational institution but if they're private institutions you might say you know what private institution if they want to do it who are we to say but it's not just private institutions that do it it's public universities that do it too and even the private institutions get very significant public subsidies so that's tax dollars going from every working person in America to subsidize an institution that's operating a hereditary principle so it does seem to me if you're fully private great go private we ain't getting another dollar out of us um right now we've got decision where we're subsidizing them to do it so at the very least let's stop let's stop encouraging them yeah um so we've been talking about mostly higher education but the education divides start uh well before that and then this is where we get into I think you know some of the challenges we see in different how the how the how just basically are classifieds and so many of our social divides are different in different parts of the country right and and there's the whole role of state and local government and governing all of this kinds of things but you have um you have many thoughts about this but but let's start with start with education and then we'll go into housing which is also where we're subsidizing uh the rich at the expense of the not rich so I'm uh I don't say very much about K-12 education in the book and that's partly a recognition of just not knowing very much about it but it's also an observation that it looks to me as if K-12 reform has been going on about as long as the K-12 system has existed I mean there may have been a few minutes where you had a K-12 system but it doesn't feel like it's very long right that um and it's proved to be very difficult um because they're a massive vested interest involved the system's structured in a particular way obviously there's it's huge complexity in there and so as a as a non-expert Observer of that I just say look I look at that and go wow that looks hard um uh so it doesn't say we shouldn't do some things and we can make a talk about that including I think paying good teachers teaching poor kids a lot more money right that's that's sounds why not people say you can't throw money at the problem maybe you can throw money at that one because I think people will respond to incentives and some evidence they will even from quite small teacher and Center programs so why not do that but otherwise I tend to think there's probably lower hanging fruit before okay and after 12. um simply because the system is a bit more malleable and they're not quite stuck um so I certainly not giving up on K-12 education I certainly would like to see those teachers being paid more on using Market incentives I'm not against them or choice if that if that does break the system you know I think um obviously that's a very controversial issue right now with the new Administration but my view is I look at the so people say our choice will create lots of inequality and I say well what about now uh you know the counter factual is pretty bad so if we had this wonderful egalitarian system now then I might feel differently about messing with it but it's it's not very egalitarian system right now and so maybe some disruption around some some aspects of choice and more Market basings will do a better job of it I'm agnostic about that I just want to do things that will try to disrupt the equilibrium we have right now where by my kids in a public high school get great quality teachers because of where the school is and we know that quality teachers are the most important thing so you know you'll notice I haven't come up with any particular particularly specific policy ideas but that's because I'm just not expert enough to do so well the policy idea I wanted to actually connect it to that you do talk a lot about in the book is is is zoning because most people choose their schools by where they buy their homes and so so how do you think about ways we could rethink sort of where people are able to live in terms of getting them access to to more regulatory in schools yeah so they choose the school or how you know it's interesting the way you frame it and of course what people do is they say I want it to be in that I mean what people do is what I did I was living in the district until I was going to have kids and then I moved out to a different school system so um yes everyone everyone now we'll get a lot of questions about that and Lauren will now take questions that's why we always that's why I we have to be very careful about which Stones we throw in this space um right because we do want our kids to do well and we don't tend to treat our own children as social policy interventions and I think that that's generally quite right as a kind of parent um but I think that yeah that's not quite quite that way you're not a social policy information um the way that these I think really it's the way these things all connects together and so if you have very significant housing wealth inequality that subsidized through the mortgage interest deduction and then you add into that some kind of quite quite a Thicket of zoning ordinances in many cases around you know more affluent neighborhoods and then you organize your schools based on mostly geographical areas which means that you know the kids are going to be from the affluent area that's protected by the zoning and it's too expensive anyway and then you've subsidize it to the tune of 70 billion dollars a year through the mortgage interest deduction that's a pretty good looking system in terms of class perpetuation now not suggesting for a moment that some some sort of you know Evil Genius um sat there and said I'll tell you what that's subsidized expensive mortgages then allow them to use local zoning to protect them then organize the school system based on geography that should do the trick right let's do that and I'm saying that haha but but I might suggest that if you were such an evil genius trying to come up with a system that would help the upper middle class to perpetuate its status it might look a bit like that yeah but but I guess what I was really struggling with and maybe you could say a little bit more about this is is is regardless of how you got to this system yeah how do you unwind it right because I feel like you know and there was been cases of you know other other school districts trying you know people trying to break off from the largest right so so you know so I I feel like rather than unwinding it we're kind of starting to double down on it so how do you start to understand personally you get these unintended consequences so sometimes if you move too aggressively for example towards a more egalitarian integrated school system you actually create an unintended consequence of a district breaking away or a significant upper middle class flight away from it which actually makes the problem worse and so I think that kind of as a policy maker we have to kind of be aware of the need to sort of move uh relatively slowly and in a way that kind of allows people time to adjust rather than sort of a dramatic you know over an overnight change in school admissions criteria for example that's almost inevitably going to create some kind of some kind of backlash the issue around around things like zoning and school to us is local and or state you're starting to see more States now and cities taking the issue of housing affordability and the cost of land and Zoning more seriously I think conversation is changing California changing Seattle is changing Massachusetts changing in New York now whether those conversations will lead to more action I don't know yet but I am I do think there's a bit as a better bipartisan conversation around that now and there was a bit more hopeful but that's the other stuff look one of the great things about the US is it's localism and it's kind of sense of kind of strong and it's strong local government but also that has to be held in balance with other Goods like the ability economic Mobility Economic Opportunity and to say that those values are intention is a good thing to say because then we have to find ways to resolve that tension but actually I think part of my purpose here is just to try and in a sense get us to have a more honest conversation about the way in which for example right now there's a zoning debate going on in my neighborhood and people are all saying it's about environmental staff parking staff Etc let's just flush it out a bit more because it's not just about that it's also about something else and some of it's about a class a class-based debate which I just want to have a more honest debate about that great so some of the other things so so I have a couple other of your solution set that are in there and um you know so part of it is before you even get to K-12 so um I so maybe you could just say a word about why sort of the um home visiting caught you and then there's um you spend a fair bit of time talking about before you even have children so maybe you could talk about some of your thoughts on those so uh I'm visiting uh I'm a pretty enthusiastic supporter of Home visiting programs uh I think the evidence their effectiveness is is good and we're waiting for some more trials to come in now but I think it's better for example than some of the evidence on Pre-K education um people will disagree about that but um and actually those early years like pre-pre-k uh you know Pre-K is really late uh in terms of development and there are a lot of families and kind of parents that actually do benefit from the support that I'm visiting around you know Child Development and having fun friends read to their kids around nutrition and so on and there's a real squeamishness about that particularly in the US right just like that's for parents that's a private matter right nothing to do with you and this whole idea of you know Uncle Sam telling you to give your kids more broccoli or whatever so I understand that squeamishness but on the other hand the people who lose out from that squeamishness tend to be the kids who are in lower income communities and families and that seems to be too high a price to pay to avoid our own discomfort about the conversation so I'm hoping I think the reauthorization for federal support for home visiting comes up next year it got bypasses and support last time through the Congressional reauthorization let's see what happens um I think it's a kind of test of the new Congress but I'm it seems to me that it's very evidence-based it's a great I could talk a great language I think it's a good example of federal policy making it's very decentralized Etc um and why not and can you imagine in the in your book that you it's Universal in the UK yeah I didn't know that yeah everybody gets a health visitor it's just it's just in it's so back to social norms right it's the norm um is that your new parents you know and they and their health visitors are pretending to weigh the baby they're actually chatting to you about how you're getting on we discovered years ago that actually weighing the baby was pointless um the uh the health as you can tell immediately if there's a nourishment issue they need to weigh the baby but you have a baby and you've got these charts you kind of fill out and it's you know what percentile you're on or it's nonsense uh it's really complete it's a waste of their time but the health is so the government wants to get rid of it we want to say stop weighing the babies and the authors all said no no that's part of the ritual of it and while we're doing it we're saying that we went a baby and then we say and how are you getting on you know how's the breastfeeding going how's Dad doing with it how's the sleep you know how's the whatever just chatting and it actually just brought out a lot you know it brought out a lot of issues and it's standard everybody has a health visitor come to them and then I think it's saying the book I saw them as Angel Visiting Angels you know I'd burst into tears when they arrive D I'm so exhausted yeah um so there's a different culture and yes and then the other one um is unintended pregnancy which I do talk about at some length and that's because I work with Isabelle Sawhill um who has a whole book on this and as I basically strongly endorse Belle's views on this which are the access to effective uh safe uh contraception is a is a very important part of the story of Economic Opportunity they tend to be treated as separate things we talk about Economic Opportunity is one thing and then all the yucky stuff about family health and sex and all that bodies are over there for other people to deal with we'll we'll do our we'll do the quintiles you do the yucky stuff but and of course it's a very very difficult issue politically and normatively and particular in the history of race uh in the US it's a it's incredibly sensitive issue but nonetheless the evidence that there are these huge class gaps in the ability to access effective contraception and in rates of unintended pregnancy and unintended births and the implications of that for the economic security and Prospects of the mother the father and the child are overwhelming and so it just feels to me this is this is a space in where the U.S is a laggard internationally you know you've got the best smartphones in the world but some of the worst contraception availability of contraception in the world that's that's that sort of feels like again that should be a space we should make more progress however it doesn't look like that's the way things are going yeah um I'm going to ask you one more question and then I'm going to come to all of you we've got a great room here and I'm sure there's a ton of questions out here um but but on this question of race and I mean you do sort of touch on it in your in your book and um it's certainly something that uh we in this country have struggled with um quite quite a bit and you know I'm just um I just was wondering if you could just say a word or two about sort of both the role UC race has uh having played in terms of the divides we have right now and and also if there's anything that um you know is sort of what you would think of as the forward lost ideas Concourse that's good so this book is about class almost exclusively not about race I mentioned it slightly I do I have done quite a bit of work on race and particularly in the context of economic Mobility you can't not um do quite a bit of work on Race because particularly the mobility patterns for African Americans are so very different to other Americans that you actually can't understand what's happening without looking at what's happened to Black Mobility rates in this context though I actually think that the in some ways we need we need to find a way to have a conversation about class and race and the way that they overlap I won't say intersect because that gets people upset but there is something what's true about the intersectionality today is it kind of you do need to be able to think about both at the same time I will say that some of the institutions that are now operating I think in a way to perpetuate class inequality have their roots in racist policies so we talk a lot about housing and Zoning the legacy of the deliberate exclusion of black Americans in particular from housing wealth is massive to this day and now it's not so explicitly racist now it's but it's used in a way that has massive income and class consequences and therefore race same with Legacy preferences you no U.S college had Legacy preferences at the beginning of the 20th century they introduced them because so many Jewish students were getting into the Ivy Leagues and so as a series of measures to try and stop so many Jews from getting in the ivy League's introduced Legacy preferences which are a stroke massively cut the numbers because none of them had parents that had been there it's actually a brilliant move if you think about it um and then and and then here we are now none of them use it now in it specifically anti-semitic way but it operates to have these kind of class so I think actually the way that the stories of race and class and we both in terms of the institution really matter the last thing I'll say is that the upper middle class is overwhelmingly White it is less white than it was 40 years ago I'm now talking about the top 20 of the income distribution less white than it was because it's a bit more Asian there isn't hasn't been a significant increase in number of black Americans Or Hispanic Americans perhaps it's too early for Hispanic Americans because we've seen big immigration instead top 20 but actually by comparison to general population the upper middle class is whiter than it was because the populations become more diverse and that's an age effect and there's lots going on there and so on but we have the story I think is we haven't seen really in the last 40 years a significant increase in the number of black Americans in that top 20 some and you know people talk about them but actually it hasn't been very much uh movement up there it remains overwhelmingly white and now a bit Asian great so now I I get to bring all of you into the conversation um we do have a couple of people with microphones so if people could just raise their hands if they have questions and we have some questions down here down in the front and and I see that there are there is a woman in the back behind the poll but I do see you so um uh great yes thanks um I'm Peggy ochowski I'm a congressional correspondent for the Hispanic outlook on higher education I'm doing a little article on your book so I found it interesting that you said uh that you did not see any um there was something about difference um between race and um opportunity hoarding but and you said there was oh no you said there was no replacement of class for race in college admissions but I would think because there's a lot of anecdotal evidence that there are many Latinos and blacks who are in the upper middle class who do opportunity hoarding as well so I wondered if you would comment on that question one time uh well I don't first of all I don't think there are that many as I just said it hasn't been that big an increase in the number uh who are okay so that's one um a very high profile one to be sure um but if we work we've got a bigger data sets and Sample sizes um there has been a slight increase in a number of Hispanic black Americans in that in that top quintile but it's small I don't have the numbers to hand but but it's really very modest but there are some so then the question is is okay if they opportunity hoard given the other discrimination that they face and and so on that's a really difficult question um uh and I don't I don't have a very good answer to it but um I think but as you raise President Obama he himself has said that he doesn't think his daughters need the extra help about that they will get from affirmative action policies and that we need to take class more seriously I think one of the reasons people worry about the affirmative action debate and moving towards more class bases I think it will get it will get rid of some of the affirmative action that's in place right now it seems to me that there's no reason why he couldn't move towards uh you know more class-based affirmative action part if you want to call it that and a lot of places are doing it but they're doing it quietly uh and that over time that will change the nature of the debate we don't have to stop doing one thing to start doing another one not least because they overlap so strongly right now anyway and I think that's that's what the president was getting at yeah and they're and discrepancies do you see between urban versus rural as well as Regional Midwest versus South versus Northeast versus West uh discrepancy in what in what particular aspect the hoarding of well okay you know well there are massive differences in intergenerational Mobility rates different areas we know that from the work of Raj Chetty and his colleagues at the equality of opportunity project which has really changed our understanding of the different than you see much lower Mobility rates in the South and to some extent in the Rust Belt than in other areas particularly low Mobility rates in areas that have very large black populations so that's part of the story too we should just kind of referred to earlier the the geography of the upper middle class is quite Coastal anyway you know almost by definition thinking about the incomes and where the kind of growth is and so on so it tends to be more clustered on the coast doesn't mean that there aren't people even in the top 20 of National Distribution in rural areas and smaller towns but I'm just about to do about to produce a map on this if you're on a map the upper middle class and map the opportunities they're pretty Coastal and that applies to something like zoning which Maureen's asked about you know the most intensively zoned cities are the liberal cities on the coast it's New York La um Seattle San Francisco and that kind of quite strongly upper middle class in their in their income and educational profile but also very very marked by these exclusionary zoning policies I mentioned before and so I think if I was looking for the hoarders it would probably be at towards the coast but as I said I need to complete a bit of work to answer the question properly uh this gentleman right here um the talk about the top 20 percent um it's to me it seems very significant that that the top 20 you're talking about that has risen in the last half century or a few decades also is there's been certainly a lot of talk about is the has become the core of the what is is normally thought about as the progressive uh Democratic uh part of the democratic Coalition and in my mind that has also I guess this is a matter of some controversy also change with the re the redefinition of progressive politics in many people's minds toward a much less class oriented and more identity politics oriented all of which is being debated right now in in often quite acrimonious terms how do you see you know is this cause a fact is it how does this interact because when because many of the things you're talking about are in many ways against the grain of how people think about Progressive issues or have come to think about Progressive issues and obviously the recent election has kind of thrown sort of blown everything up in that regard I think that well certainly you only have to look briefly at the history of the democratic party which I have only looked at briefly to see that you did see this ship in the 70s after I think the McGovern commission which weakened the role of trade unions in particular to see a kind of trend towards the professionalization much more domination of the upper middle class in the Democratic party at least as much as in the Republican party question is does that matter what is the result of that being I worry a bit about this debate about moving away from the identity politics towards class and I worry about it because in our haste falling over ourselves to understand the white working class it's a danger we kind of forget that actually the people who face the steepest challenges in the US remain Americans of color in particularly Black and Hispanic Americans that did not change and so you know you saw particularly close Ferguson and Baltimore and so on a growing interest in issues of kind of race and I will plug right now a new Brookings project run by a new colleague Camille buset on Race place and economic Mobility which will specifically look at those issues so I'm worried about the move if it brings up a more of an awareness around class and our own class the upper middle class and thinking a bit about some of the issues that we've just talked about and I think that will be welcome I don't but I don't want it to be so narrowly about just let's understand the white working class what do they need what can we do for them why do they why do they vote the way they did you know there's a I think I'm now on eight working groups that could all be sort of subtitled what the hell just happened they have better titles than that they're called the working group on Progressive uh policies for the working class or whatever right but they're all really what the hell just happened um and so all of that but actually what I hope will happen is the amount of introspection as well we're just saying look actually there's quite a lot of us that have been on The Winning Side economically speaking some of the ways that we've insulated ourselves from the risks that are faced by other Americans black white and Hispanic I can look at us and they can say they seem to be doing quite well they don't seem to be affected very strongly by trade or immigration they're not being ubered out of their jobs their kids are going to college they they hold on um and to the extent of that you can capture that I think there's some justification to people sort of seeing us no look not to say we're not doing lots of great stuff and all the rest of it shouldn't be too self-flagellating about it but nonetheless I think that the class Gap is being refracted in very unpredictable ways in politics right now politics has become quite kaleidoscopic uh you don't really know what's going to happen next and I did but I do think that the class debate if it's held in that broader way which includes Us in it and it's not just what can we do for the white working then that would be welcome as long as it doesn't mean all the identity politics stuff about race didn't work because we have stubborn structural deep problems around racial inequality in the US and I want to go I want to pick up on one of the threads in this about about work right because I think that we've also had you know since the 70s 80s this this sense of like to get a good job you have to go to college right and you have to go to a four-year college and you have to get the kind of job that requires a four-year College which is actually not very many of our jobs so and we haven't really sort of um maintained the same sense of value about the kinds of work that many many people do and will do in their in their careers in terms of caregiving work and food service work and other kinds of work so so talk about that a little bit sort of the the not valuing the the work that the working class traditionally did I'm very I'm very torn about this so I worry a lot about the kind of singular focus on four-year college degrees I worry a lot about that um because clearly there are other Pathways clearly we need more pluralism clearly you need more higher quality two-year degrees and vocational training and so on that's clearly a problem and it becomes a particular problem when you create a market because it's you know a market system in post-secondary education you can sell this idea to people and you can sell them a pretty shoddy education quite expensively um you only have to look at some of the advertising that's that runs throughout this targeting people if you want to achieve the American dream you need a four-year college degree so come to my fill in college it'll only cost you X and I'll lend you the money an interest rate of just 15 but if you default it'll be 20 and by the way it's pretty useless degree anyway um but you know you need it and so you've got actually potential for a new subprime market where you sell an element of the American dream in this case college education it was a house uh and in a way that's quite predatory in some cases and you really stuff people over rather than just getting a good quality to your vocational degree however my fear about this is if I don't want to take any of the gas off all the efforts to open up for your colleges and selective for your colleges to a broader group of people and so my fear and I can't remember who always does this it says when we talk about vocational degrees Community College how many of us are talking about our own kids right hands up is that you know and actually what we're very often is we're talking about other people's kids so when we say college isn't for everyone what we mean is college isn't for your kids of course it's still for my kids you think I'm crazy I've looked at the charts and so I I do worry a bit about that second round effect from it so I'm all in on high quality vocational and alternative routes and so on but I don't want that to become inadvertently a way in which we just further bifurcate the market so if we can do that without taking any of the pressure off for your system to open their doors great my fear is that it'll be like yeah college for our kids vocational for your kids I just worry about that okay I'm going to go over here and then over here and then back Wards so I'm very confused about whether this 20 is a fixed line or in fact you can get you know the goal would be on at least even on the part of the 20 to have 30 the top 30 the top 40 that that and I think it's sort of reflected in I think the the last person's point that is I was a Sanders delegate but it seemed to me that a lot of people who were Sanders delegates especially the older people were in that 20 and what did we want we want single-payer and uh in fact the if you look at you know the nine or the 10 most highly educated congressional districts they're all they're all Democratic and and arguably we'd be much better off if Trump uh if we allow Trump to pursue his uh really attack poor people and stuff like that yeah yeah so um the top 20 percent broke for Clinton uh in the election in a break from a historical trend so historical trend is among top 20 it usually is rough roughly breaks yes roughly 50 50 Democrat Republican it broke more Democrat according to the national uh the national election study um so I think I speak that supports your point which is that actually there are a number of people in the upper middle class who are pretty liberal who are willing to vote for policies that the wood redistribute the wood actually on the face of it um hurt some of hurt some of themselves there aren't enough of them we need more of them for sure and they control the kind of persuasive infrastructure around think tanks and journalism and console but the only thing I would say is that some of those sort of so the liberal upper middle class people so I think some of I don't want to assume this but may include some people we've talked about they always they see inequalities very distant issue it will be solved by you know government bespoke for the right government once every four years or every two years um and so that's sometimes like subcontract their liberalism to quite distant institutions and to occasional elections I think we're conservative are sometimes right about this is actually in day-to-day life and it's in kind of sometimes sort of less glamorous but but actually in some ways more important battles like how integrated is your school uh what's happening to your own neighborhood how does your organization hire its interns Etc et cetera much less glamorous but actually just doing that work in day-to-day life um in my quite almost Community organized type way is actually where they're not so good and so to put it at its sharpest I sometimes fear that upper middle class liberals in America do just vote the right way feel pretty good about themselves and then don't do very much else um and that's not good enough anymore because we need to change social norms we need to change the political environment this is a we need a culture change that precedes any political change which precedes any policy change and that culture change will be led by precise those people but it won't be led by them doing it every four years it will be led by the way they're conducting themselves as Cohen says in the thick of everyday life so that'll be my challenge back down maybe being unfair to many of them but that would be my challenge to me okay all right I'm a Latino who's not consciously but I will say I worked very very hard to become a member of the detached clueless Coastal Elite it wasn't easy getting in um millions of American kids go to schools that are funded by their parents real estate taxes and every time a member of the class that you're writing about in your book says oh more money for Education money doesn't matter these are people who often tax themselves formidably to send their kids to Mamaroneck High in Westchester and New Trier in Northern Cook County and Oak Park River Forest in Cook County as well and schools in Northern Virginia and places like Falls Church so if money didn't really matter they wouldn't have a lab where you could split the atom in the basement of their high school chemistry area but I think revealingly every time you try to introduce a Statewide formula to equalize those levels it's dubbed a Robin Hood law because you're robbing from the rich to give to the poor obviously rich people already have convinced themselves that money does matter in education it just doesn't matter in in those other kids educations apparently so many years ago sitting through to your left edited a book called does money matter in education how long ago was that Gary years ago so it's it's a lot it's a long-standing debate but I think you're I think you're sort of the force of your argument being if it doesn't matter why if it really didn't matter why you're spending so much I think two things one is we don't leave anything to chance practice by back to the stakes even if only even it only matters a bit people willing to pay for it you know it's only people who kind of live in live next to some of the best public high schools in the country who send their kids to incredibly expensive private school you know at a cost of a hundred thousand dollars a year per child and we look at the child I get the charts out and look at the outcomes and I'm like are you sure that that's worth that you know I mean are you absolutely certain that moving your kid from a school that's on their 93rd percentile one that's on the 95th percentile in terms of tests well surprises me is something absolutely uh I'll take it two percentiles for like well I won't so sorry kids um so but the question I think like where why does money matter and where does it matter I think that's the better conversation and I think it kind of matters if it allows you to if it allows you to attract quality teachers we know that the quality of the person in front of the class uh and the work that they're doing is like that's almost so obvious that all I need to say is hugely significant and so if money is part I don't know if money is much of the of the issue they're about attracting those teachers I think it's other issues around those schools if it's around some of the peripatetic supports that enable you to get into college more easily for example so Counseling Services it really strikes in private schools seem to have they have bigger counseling departments than my kids school has math department um and that's because the councilors know the colleges they get on the phone to them they advise them they help them even the parents don't comp they navigate the complexity for those kids and they're able to pick up the phone uh and so then then I know what you're paying for because your kid getting into that college and that college which again people will pay almost anything for because the stakes are so high so if it's through those sorts of service so I really need to break it down and say kind of where does the money matter um if we're to make any progress but I agreed about the politics of this as soon as you start trying to equalize it the problem we've got now is all the federal money which is going it's supposed to be extra money for poor kids all it actually does is equalize try to equalize uh I know and I think that he's now non-resident Arne Duncan was very strong on that which is this the idea of this money is to give four kids more but all it does is plug the Gap because of the funding gaps that you um that you've just referred to yeah in the off book funding gaps make it even worse well the cap just had a great report on PCA funding which I talk a bit about in the book uh yes you've confided income with class but how do you separate out a technical knowledge worker like a nurse anesthetist versus a liberal arts knowledge worker like a college professor because you use the example of Georgetown University at their Hospital the nurse attack the at the staff nurse anesthetist probably makes more money than 95 percent of the professors but everyone in this room would put the professor in a higher class than the nurse anesthetist yeah it's a great question so there's it's a very um so for part of my argument I do I use income breaks you're quite right and that is about as crude a measure of class as you could probably get I start with that because I want to see what's happening economically but I think that a more sophisticated description would include a level of Education including college education not least because even if that doesn't necessarily translate into income for the reasons you might identify it does translate into more security it tends to be found in more power at work and it perpetuates itself incredibly powerfully across generation so so actually educational inheritance of educational status is stronger than of income or wealth status and so if you've got some of these kind of parents that kind of lower income it does cut so that's so education becomes an incredibly important class transmission mechanism the boring answer is that most of the data sets I use to do the analysis of economic Trends don't allow you to look at both education and income at the same time but in the work I'm about to do geographically I'm I'm going to try and do that but I think it's a fair criticism to say look that's not the same you can look at people on the same income level and they're not the same class and so I think it's a useful corrective to the way that I've put it thank you this gentleman here and then in the back Richard Josh Newburn from The Wall Street Journal I was wondering if you could discuss an alternate approach that's been taken to this issue which is the one by Stephen Rose where he defines the upper middle class uh based off reaching an income level so he's done work where he defines it as people earning over a hundred thousand dollars uh on a inflation-adjusted basis which allows for the possibility that the upper middle class can grow and Shrink over time and he finds that the upper middle class has gotten a lot larger over the past 30 years grown by something like 50 percent and so I'm curious if you think that a lot of these issues um you you present you often kind of present them as very Zero Sum but if in fact the upper middle class is expanding significantly does it cast a lot of these issues in a different light in terms of whether or not they're all hoarding behave Behavior could they ABS could they actually be you know behaviors that have allowed the middle class to grow I'm curious I'm curious why you think your approach is right and Stevens which has very different conclusions and takeaways is the wrong way to look at the issue so I would not say that Stevens approaches the wrong way that's that's for sure it's a different way and then you could have you could have asked about the way that Pew do it which is different again which is based around the median so it's a certain percentage uh distance from from the median and you get different results again so I think as long as you as long as you're clear what your definition is and why that's your definition that's okay um the reason that I take top 20 which is necessarily zero sum is because of a a moral claim that a fair Society is one in which you have relative quite high levels of relative Mobility so I would trade less growth in the size of the upper middle class to find uh as Steve does for more Mobility he would go the other way he'd say look I don't really worry if people are moving up and down I just want more people doing well um I think the problem with his approach there are many problems with my Approach some of which you've just uh articulate and you have in your writing too um the problem with his approach is that it's it's hard then to see the line between a society getting more affluent and a society that's kind of you're seeing high levels of absolute mobility and just kind of General economic growth which other things equal tend to increase the size of the upper middle class if you've defined it by a particular income cut off so if you say that's the line as your society as your Society gets richer more people are going to be on the other side of that line well that's enormous arithmetic result of economic growth which doesn't say it isn't important it's just to say it's answering a different question and it might have quite important policy significance it might talk to me then you might just double down on kind of what are the motives of growth and not worry so much about my stuff right about moving up and down you're just like how do we how do we just get the engine of growth going more because that will increase the size of the upper middle class as Stephen defines it um so I don't think I don't think one is wrong or right but what I like about Stephen is he's very clear that that's why he defines it that way I Define it differently and it matters because it might mean that at the margins you would go for a slightly different policy Solutions particularly when it comes to example growth versus distribution I think Steve's would lead you to a much more growth oriented approach um what I like about this approach is it allows you to look at certain cities and my colleagues at Metro have just done this now you can see the shrinking middle class but the question is why is the middle class shrinking right by his definition can you go it can be shrinking because a lot of people become up in middle class right yay mostly will say good right or in other cities no clustering because more people are becoming working class uh and so you can have it you can have two cities with exactly the same shrinkage of their middle class for almost completely the opposite reason one of which is they're in real real doo-doo the factory clothes and everyone's poor now uh so falling out in middle and the other one because hey the tech company opened and everyone's up in middle class now and so you do need to add that Nuance to that approach because you need to figure out why but that why that's happened the advantage of my Approach is just it's always fixed right there's only you can only have a fifth of the population in the top 20 that doesn't change I'm going to take a Take a Bow and one three and did I see one on this and then move and then we'll wrap up um I will help you to remember Mark Popovich with the Aspen Institute um appreciate the discussion and pulling out the social norms and how they need to be addressed I was wondering about one aspect of that which is Norms within the business Community I mean if we take a so if you look at the percentage of GDP over the last couple of decades that goes to profits to business that's gone up four percent the percentage of GDP that's gone to pay to workers has gone down by four percent different people justify that for different reasons but certainly the earning the asset owning class is the top 20 it's concentrated there so they benefited from that and most of it has gone so part of that is about policy decisions and changes in the economy part of that is changing Norms in the business Community as this social compact has shifted risk off of businesses onto workers so have you thought about that and thought about prescriptions for addressing that as part of this issue okay so we're going to hold uh declining labor share of income and business norms and I I'm right here hi um Ryan Bend Oregon Economic Policy advisor at thirdway I was wondering if I could just give you a comment about uh intergenerational mobility and income inequality and get your thoughts on it and that is that my suspicion would be that much of the um upper middle class liberal Elite group of people would be you know kind of building on what the gentleman over there who worked for Sanders said earlier that they would be willing to pay more in taxes for things like TANF and food stamps and maybe even more subsidized health care but then if you were to flip it and go over and start asking them about you know zoning laws and like will you will you ease up these zoning laws to let more poor children into your schools that your children go to or give up some other advantage through sat tutoring or whatever it might be they would be very taken aback by it and I'm curious your thoughts on that and almost if we would prefer as a society the flip side would be more willing to open up opportunity even if they're less willing to give up more money so that seems like a question about sort of support for General transfers but um and then there was one more I think over here foreign so there was a passage in your book if I remember correctly um where you talked about some of the social norms around internships and um around using like family connections uh to acquire internships and that's something I've noticed personally too like there's a lot of people who because I've thought about some of these same things and had these conversations and brought them up and a lot of people will agree in principle but they'll say well everyone else is using their connections to get an internship so like that's what you should be doing too because you have to try and you know like you have to try and do that here on a Level Playing Field and It just strikes me that it's pretty hard to change it's kind of like a collective action thing like it's pretty hard to change behaviors if it's something everyone else is doing so I was just wondering if you could kind of speak to some of the social norms around that and and how you think maybe that could like what that shift would look like how that would happen great question okay so there you have it so you've got the declining labor share and changing business norms and the whole profit versus losing thing you've got the energy just tell me one more time so I think you're right to say that actually quite often we assume that we regulation or taxes or change behavior in business but I think you're right very often it's about social norms and you see very different outcomes for executive pay for example in different nations or at different periods of History not because of Regulation but because of something else and I think that one of the problems is the belief in meritocracy um and that's why I never thought I'd say I missed the British class system but as I've said you know at least Posh people in Britain have the decency to feel a bit guilty and that's and that's a bit of a serious statement behind that which is like actually you know your posture that's why that's why you're running the company right partly because you're part or you've had these advantages okay and so that kind of acts as a bit of a breaking mechanism and they're just hoovering up all the rewards for yourself whereas if you're in a society where you've convinced yourself and you've convinced yourself individually and a society that your success can only be the result of your own Brilliance and diligence and that you deserve everything you get because of how awesome you are then why not Hoover it all up and frankly if the other people down there aren't doing as well well perhaps they're not as awesome as you are so they don't deserve as much anyway and so Michael Young warned about this in his book The Rise of the meritocracy when he coined the term which came to the US and boy did it flourish over here his book was a warning about what would happen to a society that came to believe in meritocracy and one of the things would happen is the people at the top started hovering up more of the rewards because hey they deserve it and they would start to feel more and more hard-hearted about the other people because it's like well you're just not very good um and so I think that there's part of the challenge of changing social norms is to challenge this idea that's so dear to Americans and which I love about America which is a sense that everyone can make it we live in a meritocracy it would be lovely if it was true um and I kind of don't want to give up on it but on the other hand I think it's doing a lot of damage now to our political culture and the second one the second one was and there's relative support for taxes to you know sort of taxes to help the poor people but we didn't actually want to let them in our neighborhood so I think I mean to some extent I'd sort of refer to my earlier answer about the difference between distant inequality fighting and you know in the thick of it in the thick of everyday life inequality fighting um and I do think that liberals in the US need to get better at the daily in the thick of It kind of inequality fighting which will lead I hope to more support for the other policies rather than this check rather than to put it brute note more bluntly than I intended if I can check the box every four years liberalism um I'd be happy to pay higher taxes my candidate didn't win and anyway back to dinner um you know and so so I'm being unfair but I do see a bit of that and I think it's important we call ourselves average but the other question was about a link between inequality and social mobility and we nearly went the whole way without talking about The Great Gatsby curve um and the link between income inequality and Mobility my fear actually is that less Mobility might lead to more income inequality because if there's less mobility and I feel like my kids are less at risk I've got a glass floor underneath them which even if they fall not going to fall too far my support for redistribution might decline that will increase income inequality now it's hard I'm trying to find ways to look at that but it might not be the inequality causes immobility it might be immobility changes incentives which then result in less equality so connections and uh do we have a collective action problem to get ourselves out of here we do it's a general I think it's true of the others it's true of some of the other things we do as well which you get a lot of what everyone's doing it okay do you have an equilibrium where everyone's doing it um and any equipment everyone's doing it feels hard not to do it but on the other hand how do we how do equilibria change if everyone continues to do it because everyone's doing it then everyone will keep doing it and so that's a difficult thing some people need to stop doing it and start making a noise about it um and that will shift more that does shift Norms the internships three and three and five graduating seniors have done them they are handed out we often grace and favor basis they are to quote Charles Murray affirmative action for the rich you might not agree with everything Charles Murray said but that I do um and Charles on the back of my book he was kind enough to blurb it but I think that's true that there is this kind of problem uh with these informal labor market institutions one of the hardest conversations I had with my son asking him asking me if I would give get him an internship at my publisher to which the answer was no uh now you might think what a terrible parent um but on the other hand I know where my line is uh I know that actually I will help to be very educating what about I went down the same way I've turned if I get a funder who calls me uh Brookings to see if I'll sort out an internship God forbid this would happen by the way um if I say no um and you can gradually kind of shift Norms around that a little bit um but it will take some people to just stop doing it make a little bit of a noise around it because in the end same with Legacy preferences same as some of the other things we do same as zoning um in the end the argument that it's okay for me to do it even though it's bad because everyone's doing it is the moral reasoning of a sixth grader uh you know if my kid comes home to me and says I cheated in math but everyone's cheating in math do I say well as long as everyone's cheating that's fine I don't do that and actually as adults I think we should try and live by the same standards if you think something is an unfair and egregious practice we think it should stop let's stop waiting for the collective action problem to solve itself and start trying to solve it one person at a time and with that when me and thank you we still have books outside if you'd like to pick one up and we'll be lingering a bit thank you foreign

Channel: The Aspen Institute

Views: 9,205

Keywords: Working in America, The Aspen Institute, Workforce Strategies Initiative, Economic Opportunities Program, Dream Hoarders, Richard Reeves, Maureen Conway, Upper Middle Class, 20 percent

Id: pTgpgMzs5sU

Length: 85min 47sec (5147 seconds)

Published: Thu Jul 20 2017