WASHINGTON — You don’t need me to tell you, but it’s a whole lot tougher leading a garage band than being a superstar. What you might not have known is just how much harder.
If you want an example of growing inequality, try the rock ‘n’ roll industry. Between 1982 and 2003, the share of concert income taken home by the top 1 percent of performers more than doubled, rising from 26 percent to 56 percent. The top 5 percent collected almost 90 percent of all concert revenues.
The rock world is simply a more extreme version of the larger American experience. The top 1 percent of families doubled their share of national income between 1979 and 2011: Their take went from 10 percent to 20 percent of the whole. We live in a superstar economy.
That phrase and the examples come from Alan Krueger, the outgoing chairman of the White House Council of Economic Advisers, in a speech last week at Cleveland’s Rock and Roll Hall of Fame that drove home the danger of growing economic inequality. To paraphrase Bruce Springsteen, we are not taking care of our own as we should.
Now you might say that all rockers start in a garage or some other humble venue with the hope of becoming Springsteen, Beyonce or Ke$ha. (I cite the last because of her name’s thematically convenient dollar sign.) The metaphor is that America may be unequal but we still offer exceptional opportunity.
Well, yes, but not as exceptionally as we think. Krueger, who has a gift for popularizing economic concepts, has invented “the Great Gatsby Curve,” which measures income mobility across generations. It turns out that the United States has far less “intergenerational earnings elasticity,” to use the technical term, than do many other countries, including Denmark, Norway, Finland, Sweden, Germany, or New Zealand. Economically speaking, “Born in the USA” doesn’t mean what it once did.
Those who defend our economic status quo have other alibis. We don’t need to make any structural changes in our economy, the argument goes. People who want to advance just need to understand that our new economic circumstances place a very high premium on education. Get a good education, and you will do OK.
There’s a lot to this, and broadening access to good schools and higher education is part of Krueger’s program. But we also need to realize that education is not the only factor in getting ahead. He explains this by invoking a study he conducted of identical twins.