Is our approach to wage inequality all wrong?

 

FairChance

People gathered Thursday night at Austin City Hall with signs supporting the proposed “fair chance” hiring rules. The proposal, which was approve last week, would prevent many businesses from asking about a job applicant’s criminal history until a conditional job offer is made.

As depressing as the studies about Austin’s increasing economic stratification may be, it’s not like public policy makers haven’t been talking about the issue for decades.

Austin’s progressive pedigree means that our political lexicon includes perennial discussions about poverty, unequal educational outcomes, access to higher education, job opportunities and wage equity. Just in the past two weeks the city scored two more victories designed to put the city on the road to a more equitable future, with the adoption of “Fair Chance Hiring” rules and and extending the living wage to city contractors.

So why isn’t Austin seeing more progress on the income equity front? Just last week a Brookings Institute study suggested that Austin’s high rate of poverty concentration may, in fact, accelerate in the next few years. Maybe we’re focused on the wrong things, as this article in The Atlantic suggests this week.

The Atlantic’s Gillian White drilled down to the crux of a study by a University of Illinois sociologist Kevin Leicht. The study, published in The Sociological Quarterly, suggests that our national tendency to fixate on racial and gender groups may get in the way of solving the overall problem of income inequality.

Yes, Leicht says, there are gaps between groups, but there are also important gaps within those groups which are getting much, much worse. The most interesting part of the Atlantic’s Q & A has to do with job creation. More than raw numbers of new jobs, success is about the quality and continuous spectrum of the jobs produced. If the only jobs available are high tech jobs with significant educational requirements and minimum wage service jobs, then there are no mid-range alternatives for a moderately educated work force. More importantly there is then no ability for those at the lower end of the spectrum to climb the income ranks. They may be educated, but still earn next to nothing.

Says Leicht:

“We need to focus more directly on labor-market policies that increase people’s earnings and increase the steadiness of their jobs. In the end, fighting income inequality is about fighting income inequality. It’s not about closing educational gaps or getting more people married, or creating a diverse pool of Fortune 500 CEOs.”

Public and social investment are important no doubt, but without the right mix of jobs Austin is going to have a hard time moving the needle on income stratification and inequality.