October 16th, 2017

Keep In The Middle of The Road…

Is the title of the first song I learned and sang as a new student and recently arrived newbie in the USA. This momentous event took place in music appreciation class at Western Junior H.S. in Bethesda: I can sing it now….

Children, keep in the middle of the road

Don’t you look to the right

Don’t you look to the left

Just keep in the middle of the road.

Back in neanderthal times, when songs seemed simpler when verses implied sensible truths; with rhythm and enthusiasm, we celebrated the message of the old hymn: Stay focused. Stay out of the ditches. The road is long and full of potholes, don’t lose faith, keep on keeping on, and in the end, you will be fine. The lyrics, in full are provided for your enjoyment at the end of this writing.

So, let’s step into the income inequality ditch. If you are a reader of these newsletters, you are familiar with the substantial difference between educational achievement and income level. Some folks, rightly so, would also suggest that income differentials are a function of many variables, most likely, behavioral and environmental in nature, and life-cycle driven.

Wealth Management Firms In Georgia Near Me - Middle Of The Road IMG

I highlighted some of the extreme measures in the chart to help make the following points about income inequality. As you peruse the data points, ask yourself the questions: Is the inequality based on behavior (choices) or a function of a natural lifecycle? A couple of points:

Young folks and old folks make less money that folks between the ages of 35-64 = Behavior or life-cycle?
Folks that work 77.7% are in the top quintile of earners, people that do not work, 68.5% are in the lowest quintile of earners = Behavior or Life-cycle?
Married folks with children make the most money. After all, there’s two or more working? Single parents with families make the least money = Behavior or Life-cycle?
Individuals with a college education make the most money, individuals who do not finish high school the least = Behavior or Life-cycle?

I believe most of the differences in income inequality are behavior based. This is good news, isn’t it? If my opinion holds true, then logically follows that if we, the community, can influence behavior we may alter outcomes for the better.

Did you know that there is a program specifically designed to teach elementary, middle and high school students about careers, budgeting, entrepreneurship, economics all in the context of outcomes? A couple of examples:

At a program on personal finance, a middle school girl had planned a future career of working at a day care center. Her luck of the draw during the program gave her a future identity of a single mother of four. She quickly saw that the salary of a day care worker would not provide for her, much less children. Even if she took a second job, the salary of a day care worker would not make ends meet for her monthly budget. At the end of the program, the middle school student had decided to look into getting an education degree since a teacher’s salary would provide for her and allow her to follow her dream of working with children.
At another program in an elementary school a young girl “Sally” decided she wanted a career as a surgeon; when given her budget and upon visiting the car dealership she purchased a Ferrari. A young boy, “Sammy, wanted to be a fireman; when given his budget and visiting a car dealership, he selected a Mustang. Unfortunately he was told his salary and budget would not allow him to buy that car. When asked by the staff what he was going to do, he looked and pointed at Sally and promptly commented to the staff: “I’m going to marry her.” I’m not making this up; choices and outcomes rule….

Lee Highsmith, The Executive Director for North Georgia Junior Achievement, provided me with the anecdotes and the following insight from the students participating in these programs:

““One student wrote in his evaluation of JA’s financial literacy program; “Today school finally made sense. I have been asking “What are taxes and how do I pay them?”. Instead school has taught me that the mitochondria is the nucleus of a cell. I don’t plan to be a scientist, but I do plan to be a taxpayer. Today I learned about taxes.””

“One of the most often repeated statements by students participating in JA financial literacy programs is “These children are killing me!” As students are building a budget, they learn how expensive it is to raise a child ($245,000 to the age of 18 yrs), we see two responses from the students:

they express a desire to delay becoming a parent until they have a job that will provide an income to support themselves and a child
they express appreciation for their parent(s), because they had no idea the expense they had created for their parents(s)”

Staying away from the ditches, keeping in the middle of the road takes an understanding of the consequences of not doing so. Choices make a difference. If the lower quintile of all earners had even a cursory understanding of the differences in outcomes, I believe, they would have made different choices.

Hurray for Junior Achievement! Their motto should be Children, keep in the middle of the road….

Currently, our portfolios overweighted domestic and foreign equities.

Carlos Dominguez – Portfolio Manager, DJWMG

https://www.gospelsonglyrics.org/songs/keep_in_the_middle_of_the_road.html

https://www.juniorachievement.org/web/ja-usa/home

https://www.aei.org/wp-content/uploads/2017/09/income2017.png

https://www.aei.org/publication/explaining-us-income-inequality-by-household-demographics-2016-edition/

Children, keep in the middle of the road Children, keep in the middle of the road Don’t you look to the right Don’t you look to the left Just keep in the middle of the road.

I hear those angels a calling loud Keep in the middle of the road They’s a standin’ there in a great big crowd Keep in the middle of the road.

Chorus: Then children, keep in the middle of the road Children, keep in the middle of the road Don’t you look to the right Don’t you look to the left Just keep in the middle of the road In the middle of the road In the middle of the road.

I can see them standing around a big white gate We must travel along before it gets too late For it ain’t no use for to sit down and wait Just keep in the middle of the road.

I ain’t got time for to stop and talk Keep in the middle of the road ‘Cause the road is long and it’s hard for to walk Keep in the middle of the road.

I’ll fix my eye on the golden stair And I’ll keep on a goin’ till I get there Cause my head am bound that crown for to wear Just keep in the middle of the road.

When your feet get tired and your song don’t sing Don’t look at the world full of sinful things Don’t lay down in the road for to die Put on your wings and get up and fly.

“Keep In The Middle Of The Road” is a traditional African-American Gospel song.

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Keep in the Middle of the Road…