Krugman, education, and oligarchy

Here is a free link to the latest Paul Krugman column entitled "Graduates vs. oligarchs."

I think that Paul Krugman's point is that we are being fed a lie about the new economy. We are told that wealth gap between rich and poor is an education gap. And if only everyone went to college, then everyone would be in the top 10% of income and there'd be no more gap.

But Krugman points out that it's only the people at the very top who have had their incomes rise: "income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that's not a misprint."

Nearly all the people (except for Bill Gates) in the top 1% have college degrees, so this creates the artificial correlation between having a college degree and having higher income. But the implication is that for regular people with college degrees, their income has actually gone down. Krugman writes, "The 2006 Economic Report of the President tells us that the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004."

This doesn't even account for the student loan factor. If college graduate income is falling while student loan debt rising, college graduates are far worse off than anyone realizes.

Krugman, as usual, doesn't give us an explanation for why these things are occuring. There is just the vague implication that if we only vote Bush out of office everything will get better.

But this is not true. The reason for the growing wealth disparity is because the value of labor relative to the value of capital is decreasing. This is because the pool of labor is increasing, due to high levels of immigration and outsourcing of labor to low wage countries.

Because the Democrats are even more pro-immigration than the Republicans, and the Democrats have little to say about the outsourcing issue, changing the political party in power isn't going to change anything.

Comments

[Dale Gribble]

Looks like our cheap immigrant service workers are causing problems back home, in this case the Phillipines
http://news.yahoo.com/s/nm/20060228/hl_nm/philippines_exodus_dc