64° Good Morning
64° Good Morning

Boosting U.S. workers' skills key to income inequality battle, experts say

Austan Goolsbee, former top economic adviser to President

Austan Goolsbee, former top economic adviser to President Barack Obama, speaking to business journalists in Chicago during the SABEW Conference. Credit: Arizona State University / Cassidy Trowbridge

CHICAGO -- Boosting workers' skills is the key to tackling income inequality in the United States, not increasing the minimum wage or taxing the rich more, two top economists with ties to the White House and Federal Reserve System said Thursday night.

The economists said workers with more education and experience tend to have higher income, can adapt to jobs in different industries and are better able to weather recessions. They also are less likely to be unemployed.

"Inequality has gotten way bigger," said Austan Goolsbee, former chairman of President Barack Obama's Council of Economic Advisers.

"But I think everybody should be realistic about changes to tax policy, changes to minimum wage . . . is really all around the margins, in my opinion, as compared to the skill base of the workforce," he told a business journalists' meeting here. "The most important thing, long run, has to be raising the skill base."

Income inequality is expected to be a major issue in next year's presidential contest.

In New York State, liberals led by New York City Mayor Bill de Blasio have been pushing for another increase in the state's minimum wage. Low-wage workers at fast-food restaurants and other service companies have staged large protests.

Goolsbee said last night that he supported higher taxes on the wealthy, which he called "epically low." He now teaches at the University of Chicago's Booth School of Business.

Randall S. Kroszner, also a Booth School professor, said income inequality wasn't a new phenomenon.

"This has been a long-run issue," he told the Society of American Business Editors and Writers convention. "It's not like some simple sort of change in minimum wage or simply change in tax rates will suddenly eliminate this. It really is about the skill base of the workforce."

Kroszner was a Federal Reserve governor from 2006 to 2009 and played a key role in the central bank's response to the financial crisis.

More news