Considering the Evidence On Inequality

My students would tell you that I can be a bit obsessive about building a case with data. I can (and do) make them trudge with me though charts and graphs and tables until their eyeballs begin to glaze over.

Thus, I am happy to find Lane Kenworthy’s new blog Consider the Evidence, in he’ll write about ” how available evidence helps — or fails to help — answer interesting questions about political, economic, and social issues.”

In one of his early posts, he analyzes the declining “wiggle room” in many household budgets. He writes:

We may be embarking on a period in which sour economic turns — an increase in unemployment, a rise in interest rates, a significant jump in gas or food prices — create substantial financial difficulty for a larger share of households than has previously been the case. …

Households now appear to be more sensitive to serious short-run financial strains — job loss, a medical problem that results in significant cost (due to lack of health insurance or inadequate coverage), a hike in rent, a rise in mortgage payments (as a low-interest-rate adjustable mortgage rolls over). A generation ago a household could adjust to this type of event by having the second adult take a temporary job to provide extra income. During the economic boom of the late 1990s they might have been able to switch jobs in order to get a pay increase. In the past ten years they could run up credit card debt or take out a home equity loan.

For many households with moderate or low incomes, these strategies are now foreclosed.

And thus, I would add, many household are less able to save to send the next generation to college, less able to absorb rising tuition, less likely to forgo hours at work for school, even as public discourse maintains that education is key to success in the new economy.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s