Eric Schmidt is the chairman of Google. Last year, he raked in compensation totaling over $100 million from the company, adding to his net worth of over $8 billion. According to The New York Times, Schmidt owns “a Gulfstream V, a 195-foot yacht and multiple homes across the country including a new $22 million Hollywood mansion.”
One is strengthening the safety net for the less well-off. I am definitely with him there. The United States is one of the richest societies the world has ever known, but it has a remarkably ungenerous welfare state. So, so far we’re good. The war on poverty worked, and it would work even better if programs like food stamps, Medicaid and the EITC were expanded.
Schmidt’s second idea involves devoting more resources to education in the science and technology fields. This may be a good idea, but there is no evidence that it will decrease inequality. The education policies that would probably do the most to fight inequality would be enacting universal pre-K and making college more affordable by making public colleges tuition-free and increasing financial aid for students. Studies have found that early childhood education programs lead to greatly enhanced employment and education outcomes for poor children. The high cost of college is putting the brakes on social mobility by preventing many talented students from acquiring an education. Research shows that low-income students with high test scores are less likely to graduate from college than low-scoring rich kids.
Finally, we come to Schmidt’s third recommendation, which is for the government to give more support to start-ups. As Slate’s Jordan Weissmann’s notes, part of what he means by this “support” is more deregulation in areas like energy and telecommunications. But as scholars of deregulation such as Thomas O. McGarity have pointed out, the deregulatory mania we’ve seen since the 1970s has been one of the engines of inequality in the US economy. It’s led to rent-seeking bonanzas that have vastly enriched and empowered the one percent at the expense of everyone else.