Changes in family structure do not explain the gains of the very rich — the much-discussed “1 percent” and the richest among them. That story largely spills from Wall Street trading floors and corporate boardrooms.
But for inequality more broadly, Mr. Western found that the growth in single parenthood in recent decades accounted for 15 percent to 25 percent of the widening income gaps. (Estimates depend on the time period, the income tiers and the definition of inequality.) Gary Burtless of the Brookings Institution found it to account for 21 percent. Robert Lerman of the Urban Institute, comparing lower-middle- and upper-middle-income families, found that single parenthood explained about 40 percent of inequality’s growth. “That’s not peanuts,” he said.
...Forty years ago, the top and middle income thirds had virtually identical family patterns: more than 95 percent of households with children in either tier had two parents in the home. Since then the groups have diverged, according to Mr. Western and Ms. Shollenberger: 88 percent at the top have two parents, but just 71 percent do in the middle.
...Scott Winship of the Brookings Institution examined the class trajectories of 2,400 Americans now in their mid-20s. Among those raised in the poorest third as teenagers, 58 percent living with two parents moved up to a higher level as adults, compared with just 44 percent of those with an absent parent.
A parallel story played out at the top: just 15 percent of teenagers living with two parents fell to the bottom third, compared with 27 percent of teenagers without both parents.
“You’re more likely to rise out of the bottom if you live with two parents, and you’re less likely to fall out of the top,” Mr. Winship said.
That we are unlikely to see any such action suggests that there is actually little concern with income inequality per se, but rather the issue is used as a convenient cudgel with which to bash capitalism and promote expanded government intervention in the economy.
Related: DeParle also has a blog post in which he expands on the article.