Wealth inequality is on the increase and people with wealth could make a difference. Investing in higher … [+] education would be an excellent step to level the playing field.
Wealth inequality has been on the increase for many years. Since the 1980s, nearly all of the increase is thanks to the rise in wealth of the highest 0.1 percent of families. The share of wealth owned by those families rose from 7 percent in 1979 to 22 percent in 2012. rock bottom 90 percent of households held around 35 percent of all wealth within the 1980s, but held just 23 percent in 2012. New reporting shows that the trend is constant and 2019 was no better.
In 2019, the five hundred richest people saw their wealth rise 25 percent. Collectively those 500 people added $1.2 trillion to their already massive net worth, now at $5.9 trillion. Just the 172 American billionaires added $500 billion to their fortunes. But wealth inequality isn’t almost individual families and their fortunes. It’s also about the systems that not only allow it, but help to exacerbate it, leaving lower- and middle-income families behind.
A perfect example of where this plays out is education. the whole system—including admissions, paying for a degree, grad school, and high-paying employers—is structured during a way that benefits those at the highest. People with wealth are presumably to enroll in education, have the resources to buy it, and buy the foremost expensive schools. Colleges and universities give out “merit” scholarships supported test scores, GPA, and extracurricular activities—all things that tip the size to the rich who have already got the resources to buy a university degree.
Very few low-income students are admitted or recruited to elite universities. and people are the places where high-paying employers attend recruit. Instead, those low-income students that are ready to enroll in college disproportionately attend under-resourced colleges or universities, or worse, are recruited by low-quality, predatory for-profit colleges that saddle them with debt they can’t repay.
Students of color receive the worst of that. For-profit colleges structure only alittle portion of all colleges, but they enroll a way larger share of scholars of color. Thirteen percent of Black students enroll in for-profit colleges, compared with just four percent of White students. Historically Black Colleges and Universities (HBCUs) that produce many Black gradautes are a number of the foremost under-resourced schools thanks to years of neglect and systemic racism.
Democratic presidential candidates Elizabeth Warren and Bernie Sanders have proposed a wealth tax to deal with the rising wealth gaps and fund programs as key pieces of their platforms. (Most Democratic candidates have proposed raising taxes on the rich, but all haven’t endorsed a wealth tax as their mechanism to try to to so.) If successful, a wealth tax would definitely change the structure of the system today that permits for the widening gap. Sanders says he would pay other plans, but Warren says she would use it to buy her education plan, among other plans.
Warren’s plan would eliminate public undergraduate tuition, pay living expenses cancel up to $50,000 in student debt, a $50 billion fund for HBCUs, and more. But the billionaires today don’t need to await a wealth tax to pass to form a difference. With the huge wealth they’ve obtained, they will refund today in an attempt to level the playing field. There are many things they might do this would help to shut the gap. Of course, these people often donate large sums of cash either individually, through a foundation, or both. But what if they took just some of that wealth today and focused on higher education?
Billionaire—and presidential candidate—Michael Bloomberg made the headlines when he donated $1.8 billion to Johns Hopkins University to help with aid for college kids. While well-intended and admirable on its own, that cash could’ve been better spent. Johns Hopkins is an elite school where only 32 percent of scholars borrow to attend and only 12 percent of scholars are low-income. Not that distant may be a junior college with an endowment only a small fraction the dimensions of Johns Hopkins. A more targeted donation would make an enormous difference within the lives of these who need help the foremost.
One way the highest 1 percent could really change the system is to donate to community colleges and HBCUs. Facebook’s Mark Zuckerberg increased his personal wealth by $27.3 billion in 2019. His increase—not total wealth—is quite 7 times the sum of the endowments of all HBCUs consistent with data from the Department of Education. Donating to those schools would allow them to take a position in aid, improve facilities, and build capacity to properly support students.
An unconventional way the highest 1 percent could make a difference is to pay the debt of just a few borrowers or a lower amount. Student who start a degree but don’t finished are 3 times as likely to default their loans. They enrolled in college for a few time, took on some debt to try to to so, but don’t see the earnings premium a university degree provides. and people borrowers often have low balances. About two-thirds of defaulters have loan balances under $10,000. Considering the expansion in wealth this year of $1.2 trillion—just shy of the cumulative outstanding student loan balance for all borrowers—for those 500 families could make an enormous difference within the lives of these borrowers struggling the foremost.
Students and families shouldn’t need to believe billionaires to form donations to enhance education. States and therefore the federal should invest in education to lower the value and improve the standard of their degree. which should be funded by taxes on those with the foremost resources. However, until governments act to form these needed changes, those with wealth can recognize their circumstances and work to form a difference. A investment in education would help to make a more equitable system put it on the trail to leveling the playing field.