Close The Gaps: Disparities That Threaten America

By:  Valley News Editorial Board

Washington, it seems to us, is focusing on one gap -- between spending and revenue -- to the exclusion of others. That's unwise, because these other gaps also pose threats to America and its social structure. They, too, ought to be closed.

Take the jobs gap, which doesn't need much explanation. There are far fewer jobs than people seeking work, which is why unemployment is close to 10 percent or higher, if you count those who would like a job but have given up looking. According to economist Laura D'Andrea Tyson, writing last week in The New York Times, the U.S. economy would have to add about 12.3 million jobs to return to employment levels that existed before the 2008-2009 recession blindsided America. A quarter of a million people enter the labor force each month. At the current pace of recovery -- which is to say slower than slow -- closing this gap could take 10 years or more. Talk about a lost decade.

Closing the jobs gap might be easier if there were a solid commitment to closing the investment gap. Unlike other rich nations and, we hasten to add, developing countries such as India and China, the United States doesn't spend nearly enough on education and work force training; research and development; and vital infrastructure such as bridges, roads and air traffic control. This is what's known as "non-security discretionary spending," which is a misnomer. Investing in these areas would actually help strengthen America and secure the future. Yet spending in these categories accounts for less than 10 percent of all federal expenditure, and the share has been falling and is likely to fall further in the grip of the Scissorhands caucus that has taken control of Congress.

Finally, and most worryingly, there's the widening wealth gap. The inequality of incomes in this country has been well documented and much commented on, to wit: The richest 1 percent of Americans now account for almost a quarter of the nation's income, creating an imbalance even worse than the days of the Rockefellers and the Vanderbilts.

Less remarked, however, is the fact that America's wealth gap is also a race gap. As the Pew Research Center reported last week, the median wealth of white households is 20 times that of black households and 18 times that of Hispanic households. Think about that. In 2009, the typical black household had $5,677 in wealth -- defined as assets minus debts; the typical Hispanic household had $6,325; the typical white household, by contrast, had $113,149.

The disparity is twice as large as it was in the two decades prior to the Great Recession and the largest since the government began publishing such data a quarter century ago. The downturn has been particularly hard on blacks, who are twice as likely to be unemployed as whites.

Moreover, according to the Pew analysis, the wealth gap widened between 2005 and 2009 because minorities disproportionately reside in states hit hardest by plummeting house values -- Michigan, California, Arizona, Florida and Nevada, where median house prices fell as much as 50 percent .

White households saw house values decline as well, of course, but they tended to be cushioned by other assets that many black and Hispanic households don't have, including savings accounts, pensions and stocks.

"What's pushing the wealth of whites is the rebound in the stock market and corporate savings, while younger Hispanics and African Americans who bought homes in the last decade -- because that was the American dream -- are seeing big declines," Timothy Smeeding of the University of Wisconsin told The Associated Press.

These days, the American dream is more apt to be realized in South America, in places such as Ecuador, Venezuela and Argentina, where incomes are actually more equal today than they are in the land of Horatio Alger. Who's the banana republic now?

-Valley News Editorial Board