+Income Inequality Challenges Facing Young Households in the US

Chunzi LinNick PawloskiBenjamin RustmanWei Rong TayZach Uminski

+Pew Research Center

Founded in 1990 and based in Washington D.C.

Provides information on social issues, public opinions, and demographic trends

Conducts public polling, research, media content analysis, etc.

Mission is to enrich the public dialogue and supports sound decision-making

+Income Inequality

+Income Inequality

+Young Households

Income gap among young households has become bigger

Lowest quintile of earners have seen their share of income fall, while highest-earning quintile grown their share of income

Decreasing mean income for young adults As young generation grow older, it will widen the

income inequality gap Causing social and economic problems So what can be the root causes…?

+Causes1)Education College graduates are more likely to earn twice the

salary of high school diplomas

+Causes 1)Education (conti.) The median wage growth of college graduates is higher

than non-college graduates This could be due to the supply and demand of labor

market

+Causes2)Student Loans 69% of graduates had student loan debt Average student loan debt is more than $30,000

Increased by 33% since 2005

+Causes 2)Student Loans (conti.) College tuition fees has increased dramatically over the

last few decades

+Causes 2)Student Loans (conti.) Average earnings of young college graduates has been

decreasing

+Causes

3) Occupation Young adults with higher degree tend to find higher-paid

jobs Increasing starting salaries for high-skilled jobs

4) Consumption & Investment behavior Higher educated individuals have better financial

knowledge and act accordingly People with less financial literacy are more likely to be in

debt

+Alternatives

Current system is not workingChanges must be made

EducationStudent Loans

Source: Intrust

+

Annual expenditures per FTE student for elementary and secondary education in selected OECD countries, by gross domestic product (GDP) per capita: 2010 Alternatives

+

Annual expenditures per FTE student for postsecondary education in selected OECD countries, by gross domestic product (GDP) per capita: 2010 Alternatives

+Alternatives1)Education Establish committee to grade teacher’s

performance Repercussions for low performing teachers

Eliminate/Reduce “Common Core” More local control

+Alternatives1)Education

+Alternatives2)Student Loans

69% of graduating seniors had student loan debt

Pell Grants are major source for low income families Increase threshold

from $23,000 to $32,000

+Criteria

Public Nature of Problem Problems:

1) Public 2)Governmental 3)Economic

Targeted Demographic Low Income (>$30,000)

+Methods

Social AcceptancePolitical Backing

LobbyistEconomic Feasibility

Time sensitivityShort and Long Term Goals

+Recommendations Student Debt

Rising costs in education

Inability to pay

Pell Grant Adjustment 30% of College Costs Income Restriction Change

from $23,000 back to $32,000

Increase in Social benefits

+Recommendations (conti.)

Education Gap No Incentive for teachers to perform well. Different levels of teachers in each level

creates unstable learning environmentPerformance-Based Pay

Restructured Tenure Teacher Monitoring

+Implementation Plan

Step 1: Find multiple possible solutions & select the best option Pell Grant adjustments Education adjustments Estimated time: 10 weeks

Step 2: Propose our income and education bill to the community & collect feedback Specific interviews Estimated time: 6 months

+Implementation Plan (conti.)

Step 3: Analyze community feedback Break data into different demographics

*Age, educational background, race, wealth, etc.

Estimated time: 8 weeks Step 4: Propose income and education bill to our

local representative Hire assistance to draft official bill Estimated time: 4 weeks

+Implementation Plan (conti.)

Step 5: Income and education bill passes into law Hire lobbyist Attract media attention Estimated time: 10 weeks to a year

Future Steps: Track performance Is it helping to solve the problem? Does it need updates or revisions?

+Potential Challenges

Gathering community feedback Getting the bill passed

+Conclusion

Income inequality among young households is a newly raised issue in the United States

Education, student loans, occupations, consumption behaviors are root causes

Our team propose Pell Grant adjustment as a solution Short-term and long-term goals Our team is confident

+Reference Lists

DeNavas-Walt, C., Proctor, B. & Smith, J. (2013). Income, Poverty, and Health Insurance Coverage in the United States: 2012. Retrieved April 5, 2015 from http://www.census.gov/prod/2013pubs/p60-245.pdf

NCES. (2013). Digest of Education Statistics: 2012. Retrieved April 7, 2015 from http://nces.ed.gov/programs/digest/d12/

NCES. (2014, January 1). Education Expenditures by Country. Retrieved April 7, 2015, from https://nces.ed.gov/programs/coe/indicator_cmd.asp

Rotherman, A. (2012, May 24). How To Fix Pell Grants | TIME.com. Retrieved April 6, 2015,from http://ideas.time.com/2012/05/24/how-to-fix-pell-grants/

Baum, S. & Steele, P. (2010). Who Borrows Most?Bachelor’s Degree Recipients with High Levels of Student Debt. Retrieved April 1, 2015 from https://trends.collegeboard.org/sites/default/files/trends-2010-who-borrows-most-brief.pdf

Strauss, V. (2013, December 15). How much teachers get paid — state by state. Retrieved April 7, 2015, from http://www.washingtonpost.com/blogs/answer-sheet/wp/2013/12/15/how-much-teachers-get-paid-state-by-state/

Student Body of America Assosiation. (n.d.). Possible Solutions to the $1 Trillion Student Debt Crisis. Retrieved April 6, 2015, from http://www.studentbodyofamerica.org/possible-solutions-to-the-1-trillion-student-debt-crisis

U.S. Census Bureau. The Statistical Abstract of the United States: 2012. Retrieved March 30, 2015 from http://www.census.gov/compendia/statab/2012/tables/12s0232.pdf

+Question?