There’s a growing tendency for mainstream economists, including several of those at the Federal Reserve, to dismiss all income disparities as the product of a skills- or education gap, a misleading explanation given weak wage growth that points to ongoing weakness in the job market.
So it was relieving to see, tucked in the US central bank’s latest semi-annual report to Congress on monetary policy, an analysis of recent inequality research that refutes the idea that education is the only factor behind income inequality. Race, unsurprisingly, also plays a major role, as do social and economic measures, including taxation, interest rates, and labor policies. The Fed states:
“The persistent gaps in economic outcomes by race and ethnicity in the United States raise important questions about how people ascend the economic ladder. Education, particularly a college degree, is often seen as a path to improved economic opportunities. (Business Insider)