Amid plenty for some, wage inequality worsens and kids suffer

In his latest book, Harvard political scientist Robert Putnam poses the question of whether family income inequality necessarily results in inequality of opportunity for our children. Putnam’s answer in “Our Kids: The American Dream in Crisis” is a solid “yes.”

This is a critical question we must address in California, where income inequality among families with children is growing faster than the national average.

In 2010, the top fifth of our families earned more than ever, while the bottom three-fifths had stagnant or slightly declining family incomes since 1970.

As the Center for American Progress recently documented, the cost of staying in the middle class, including paying for child care, out-of-pocket health expenses and college, have skyrocketed even as wages have stagnated.

Of course, the direct impact is that our most affluent families are investing more in their children than ever before, from the best child care and after-school enrichment activities to college-prep tutoring.

The U.S. Department of Agriculture’s annual report on the cost of raising a child shows that throughout a child’s life, families in the top-third income bracket are spending at least two times more on their children than families from lower income households.

This dichotomy, as Putnam documents, has increased along with income inequality.

The more troubling trend that Putnam highlights is how income inequality mirrors all the other ways our society has changed, making opportunities for low- and middle-income children less attainable. A few examples:

▪ There are fewer two-parent families, undermining household stability.

▪ Communities are less integrated along class lines, denying children from different income backgrounds opportunities to learn from one another.

▪ Workplaces are less likely to be unionized, depriving all workers control over their time and parents at the lower end of the income spectrum vital time they need to invest in their children.

▪ Public schools serving low- and middle-income students have more needy children than ever before and must make do with limited sums of money.

In the youngest years, when investments can make the most difference, we are seeing drastic declines in the time and money families have available to spend and in the public investments available to support children before they enter school.

Putnam writes that “Goodnight Moon Time,” the time that parents spend reading, talking and actively engaging with their children, was about the same for low-income and high-income families in 1970.

It now diverges by more than 30 minutes a day, every day, during a kid’s childhood. Since 2007, California has disinvested more than $1 billion in child care for low-income parents. Yes, $1 billion less, at the same time families have less money and time for their children. California’s disinvestment came even as the economics of early childhood investments were becoming more clear.

Nobel Prize-winning economist James Heckman estimates that for every $1 invested in quality child care or preschool, the return to our society and to the individual is about $7 with increased lifetime earnings and decreased costs to society of remedial education and involvement in the criminal justice system.

California’s leaders are not blind to the concerns about income inequality and social mobility. In recent years, Gov. Jerry Brown and legislative leaders have made critical investments by raising the minimum wage, spending more on our highest-poverty public schools and, starting last year, restoring some funding for early childhood programs. They made initial investments in putting California on a pathway to universal preschool.

But it is not enough.

This year, the Legislature will debate bills that would establish an earned income tax credit, increase the quality and investment in child care, and require large employers to offer predictable schedules to hourly workers. Soon, voters may be asked to go back to the ballot box and extend the tax on high earners to support our schools.

There may be limited appetite in Sacramento for making all of these investments at once. But if we truly believe in the California dream, if we truly want to provide opportunities for all our kids, we must recognize that the real economic constraints on families means that we have a greater responsibility than ever to increase opportunities for children through investments in child care, our schools and our communities.

Ann O’Leary is vice president and director of the Children and Families program at The Center for the Next Generation.