Bridging America’s economic divide – CNBC

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Access to high-wage employment in the workplace begins with access to quality education in the classroom. And the opportunity divide begins early — often before formal schooling begins in kindergarten.

That’s the motivation for New York city’s recent rollout of wider access to pre-K learning, in one of the largest expansions of the early childhood education in the country.

For the children in these programs, the head start gives them a lifelong advantage as they progress through the rest of their education and job-related training. But private pre-K education programs can run more than college tuition, a financial burden many low-income families simply can’t afford.

Read MoreUniversal pre-K helps more than just toddlers

By providing public access, wider enrollment in pre-K has creates and added benefit for the families of young children, allowing parents who would otherwise have to stay home to go back to work.

In New York, the cost of the program is about $10,000 per child, a large upfront cost to taxpayers. But for every dollar spent on early education, taxpayers save $13 on future costs and generate $3 in net business and economic value, according to an MIT analysis.

Bridging the divide means expanding access to education all the way to the post-secondary degrees that boost income and wealth overall.

But access to college alone isn’t enough, statistics show.

Despite increased enrollments of non-white students at four-year public and private college and universities, completion rates for these students lag their white classmates, according to multiple studies.

Even for those who complete advanced degrees, higher education doesn’t close the economic divide, according to a study last year by the St. Louis Federal Reserve.

Analyzing two decades of data on wealth and income, the authors found that higher education helped protect wealth, especially during financial shocks like the Great Recession, but only among white and Asian families. Between between 2007 and 2013, the median wealth of all families headed by a four-year college graduate fell by 24 percent — just half as much as the drop among families without a college degree. That pattern held up among white and Asian households.

Higher education, though, didn’t protect the wealth of the typical Hispanic and black college-headed family. Median wealth fell by about 72 percent among Hispanic college-grad households compared to a 41 percent drop among Hispanic families without a college degree; among blacks, household wealth fell 60 percent for college-headed households versus 37 percent for those without a degree.

“Higher education alone cannot level the playing field,” the authors wrote.

The wealth divide was also widened by the Great Recession following the massive loss of savings embedded in the equity derived from owning a home, for generations the primary driver of wealth for middle class households.

Bridging America’s economic divide – CNBC