Who's to blame for the prosperity gap? MARGARET WENTE Globe & Mail - May 15, 2007 Drive around Toronto and you'll see a tale of two increasingly divergent cities. In glitzy midtown, million-dollar condos and Beemer X3s are selling like hot dogs on opening day. Go a few miles north to Lawrence Heights and you'll see the cycle of poverty, 21st-century style. The kids aren't barefoot, and a lot have cable and cellphones. But very few will grow up to rub elbows with the affluent folks downtown. The gap between the rich and poor is growing, not just in Canada but in the U.S. and Britain, too. The rich are getting richer, while the middle class is shrinking and the poor are standing still. In Canada, families in the top fifth now make an average of $105,000 a year more (after tax) than families in the bottom fifth. That differential has increased by $20,000 in the past nine years. Many people blame evil forces for this trend - globalization, corporate greed, the stingy minimum wage, part-time jobs, welfare cutbacks, lack of public housing, and so on. "It's corporate bullying that keeps these people poor," pronounced one sage on the CBC. "We have a two-tier labour force," said an economist with the Canadian Centre for Policy Alternatives. What's really driving the prosperity gap? Well, here's one factor you don't hear much about: High-achieving women. It's obvious when you think about it. Higher-earning women tend to marry higher-earning men, and together they tend to make a pile of money. Even a pair of teachers can easily bring in $131,000 a year - more than enough to put them in the top 10 per cent of Canadian families by income. Forty years ago, most of these high-earning married women would have been at home. "Highly educated women have always been attracted to highly educated men, so there's nothing new there," says Andrew Heisz, a senior researcher at Statistics Canada. "The difference is that there are a lot more highly educated women now than in the past, so a lot more power couples." Starting in the late 1960s, the Pill freed millions of women to pursue extended educations and professional careers, safe in the knowledge that they wouldn't be ambushed by an unexpected pregnancy. The pill had an indirect effect as well, argues Harvard economist Claudia Goldin. It made career women far more desirable as mates. More professional men began to marry their colleagues, instead of their secretaries or high-school sweethearts. Economists call that assortative mating. Inequality is also widening as the economy increasingly rewards certain abilities - especially the ability to communicate, organize, persuade and lead sophisticated teams. "The real rewards are going to the top 10 per cent, especially to those relative few who have the skills to transform organizations from the top," argues Harvard economist Lawrence Katz. The difference between the haves and the have-nots isn't only about income. It's also about education, skills, attitudes, behaviour and expectations. It's also about parental investment. Power couples become power parents who are able to invest a fortune in their children - not just in money, but in time, attention and life lessons. Any parent who reads The Globe and Mail is probably a power parent. You help the kids with their homework, drive them to soccer practice, enroll them in French immersion, take them to Europe on vacation, and show them how to navigate their way through a sophisticated and increasingly complex world. A lot of parents who live in Lawrence Heights don't do those things. A surprising number of their children have never been downtown, never mind to Europe. So is rising inequality a problem when even poor kids have cable? I think the answer is yes. The achievement gap is self-perpetuating. High-achieving parents produce high-achieving children, who grow up to marry other high achievers and replicate themselves. The knowledge economy is creating an entirely new phenomenon - an entrenched meritocracy, whose world is more and more remote from the lives of the bottom fifth. The trouble is, none of the old policy prescriptions will close the gap - not more wealth redistribution, public housing, or even free tuition. What would? I wish I knew. mwente@globeandmail.com