How We Should “Mind The Gap”

For several decades, income inequality has widened the opportunity gap making it hard for people at the bottom to move up the income ladder. Now, it has turned into a key issue in the coming election. Presidential candidates all seem to have the perfect government measure to get rid of this problem. One wants to wage a tax war with billionaires, another wants to crush the sharing economy. Despite high failure rates, some claim we should expand our government programs to shrink the gap. Should these politicians be the one to solve this problem or can we let the millennial-run sharing economy take the reins?

“Started from the bottom now we’re UP here.”–Women

Harvard Public Policy professor, Robert Putnam, just published a book called “Our Kids.” Through heart-wrenching interviews, the book describes how kids from poor families end up faring in life compared to affluent families. The main issue when it comes to the widened opportunity gap is class segregation – rich people hanging with rich people, and poor people hanging with poor people.

For the sake of argument, Putnam lumps the “rich” into families with college degrees and the “poor” into parents that just barely make it through high school. It makes sense, right? In general, degrees make more money than no degrees, and it has become increasingly so over the last several decades.

Like stated before, Putnam attributes today’s opportunity gap to the increased class segregation, which receives a much deeper and detailed analysis, but here’s a little synopsis: women — you ruined it all.

In response to women flooding the workforce during World War Two and the subsequent Equal Pay Act of 1963, more women became empowered to get educated—and they were damn good at it. They became extremely smart and successful. The “girl-next-door” now has a college degree and a stronger salary (even if it is still only 78 percent of their male equivalents). The two strong salaries, from both college-educated parents, create, what I like to call, a powerhouse couple. The powerhouse couple has the means to provide its kids a leg up, especially with education.

Despite the ability to send their kids private or specialized schools, they are much more likely to pour money into their kids’ public schools through “school supporting nonprofits.” Nonprofits, private groups, and other fundraising initiatives in wealthier communities are unsurprisingly successful compared to lower income communities. These funds go toward art and music classes, specialized classes, and even cool 3D printers for the media class at some schools.

Like a domino effect, these schools with the extra benefits draw in more affluent families, creating this very distinct class segregation. These schools enjoy even more benefits from the influx of rich parents. This draws in better teachers, more extracurricular activities, a larger network of professionals, better hospitals, and better opportunities—for da kidz.

“Started from the bottom, and we’re STILL here.”–The Poor

As you can imagine, poor families don’t have it as nice. A common theme across struggling families is that they are broken. Statistically, financially struggling families are less likely to have two active parents, with a higher divorce rate leading many families to be run by a single mother. Poorer families see significantly higher rates of drug use and incarceration, which removes important role models from children’s lives.

Further, the increased burden on the single parent means they must work very long hours at multiple low-paying jobs just to put food on the table. You think they have time to check to see if the kids have completed their homework? Who’s there to help with a science project or with a particular math problem? These kids get the double-whammy of being screwed.

As the rich migrate toward better communities, these poorer communities become increasingly poorer. Schools in these areas are rough. Even smart kids from poor families that may not be broken, just broke, end up worse off and without the same positive supporting factors of success as those in rich communities. Low-income schools see disproportionately higher rates of teen pregnancy, violence and drug use. It’s safe to say that this environment doesn’t actively foster a successful future.

In addition, public schools have started cutting out extracurricular activities and focused on the STEM classes through standardized testing. Extracurricular activities have become more of a pay-to-play system. Looking back, I remember having to dish out money for band. I, too, was worried where this money was going to come from. These activities like sports or band can average out to be around $400 a semester. If a family has two kids, that’s $1600 a year, which is a huge slice of the struggling family’s annual income pie.

In his fantastic book, Putnam suggests a number of government policies and programs to help alleviate these massive shifts in opportunity for the poor. He has launched the Closing the Opportunity Act initiative where “experts” start figuring out possible approaches in order to address the issues in schools, communities, parenting, vocational training, and apprenticeships.

It’s Up To Us

Although there have been successes, government-funded programs have done very little to change the dismal futures for low-income families or stop the gap from widening. In order to shrink the opportunity gap between the rich and poor, millennials, a.k.a. us, have to change our mindset. Instead of looking to the government to “handle it,” we should look toward entrepreneurship and innovation in the growing sharing economy.

The sharing economy is sometimes viewed as a place exclusively for savvy, middle-class millennials. But, many politicians fail to realize how it can positively impact the low-income consumer and help bring up their standard of living. By allowing used items to be rented, with no licensing or government regulation to artificially inflate prices, the sharing economy brings them items that weren’t previously accessible.

Airbnb has made vacations dramatically more affordable. Uber and other car-sharing companies have made travel much cheaper! It’s only getting started yet here’s a small list of 200 companies involved in the sharing economy. From blenders to cars, and from tutoring to musical instruments, anything and everything will become increasingly affordable. It can completely change the dynamic of their lives—for the better…if we let it.

The sharing economy will probably not keep the rich from having more opportunities than the poor. However, it has the potential to make huge strides in providing resources to all levels of income. Having access to professionals, homes, cars, tools, you-name-it—is crucial to the well-being of a society. It also incentivizes more peer-to-peer interaction, instead of relying upon the government as an intermediary or platform for exchange.

Acknowledging that we are sitting on a gold mine that can dramatically increase the well-being of the world is the first step. It’s up to us to lift the sharing economy to these heights. As we increasingly become more tech, economically, and politically informed, it’s up to us to reshape the role of government and our role as the generation that brings opportunity to everyone.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.