Analysis: The Downside Of Inequality

In Gary S. Becker’s and Kevin Murphy’s article, “The Upside of Inequality”, they argue that the increase of the income inequality gap is beneficial to our economy because of the reason behind it; now that more people are investing in their “human capital” by pursuing higher education, the higher rewards from this is the cause of inequality. They elaborate on how the rise is due to the fact that education is emphasized in the labor market, such that more people who are investing in education have higher rewards. The income gap is growing because of the increasing opportunities to advance. Becker explains that the potential of advancement through education is higher than ever, it has especially beneficial for people of color and women. With …show more content…
Though they acknowledge that tuition is rising, they claim this is due to the higher investment in the quality and quantity of education. Distinctively they point out, there are still those who are at a deficit and those are people who fail to attend higher education. They claim this is due, in part, to the “break down of the American family” as those in broken homes have less of a chance to advance, thus keeping them from taking advantage of the opportunities to invest in their “human capital”. They state that the income gap could be closed if an increased amount of people invest more in their education. Becker and Murphy emphasize that policies should focus on taking advantage in the rewards of investing in human capital, encouraging the increase of human capital; as higher capital, both physical and …show more content…
The opening gives the reader a false sense of an economy where inequality is beneficial; India and China are not valid comparisons to the US; their economies are different from ours. The language used is misleading as well. For example, “human capital” or the skills, knowledge, and experience one possesses, is used extensively as a way to connect the ideas of inequality and opportunity. This alone is quite confusing. Becker and Murphy use rewards from having higher education as the basis for their “income” in their whole argument; arguing that those who make more by higher education take the opportunity given to them and invest in their “human capital”. The inequality comes in with youth who lack the cognitive and non-cognitive skills to take advantage of the opportunity that is college. However, he puts the blame of these youth having their skills shortage due to the “breakdown of the American family”. We can only assume from context that this means the structure of a family. As it may be a possible reason for this, it has not yet been tested; but school environments as well as working environments have shown that they impact on the development of these skills. In order for a factor to attribute to the shortage of the development of a skill, first it has to contribute to the development; “The