Government report shows income gap increasing

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Fresh evidence emerged yesterday that the income gap is widening between wage-earners and executives and professionals, which economists attribute to differing levels of education and skill.

A Commerce Department report showed that incomes rose a strong 0.5 percent in June and were $23 billion more than estimated last year.

But most of the gains were not in wages. Growth in business income, dividends and interest -- which goes primarily to top-income households -- accounted for most of the gains, while wages continued to stagnate.

Federal Reserve Chairman Alan Greenspan and business leaders warn that the public educational system has failed to provide most workers with the math, science and technology skills needed to secure high-wage jobs.

Some top business leaders are taking things into their own hands.

Microsoft Chairman Bill Gates, whose charitable foundation has $26 billion in assets, has designated improvement in the educational system -- particularly high schools -- as his top goal in the United States.

"The economy increasingly depends on skilled workers," said Melinda Gates, Mr. Gates' wife and co-chairman of the fund. "But in 12th grade, our students in science and math are near the bottom" in international comparisons.

"The most intractable problem" in the United States is education, she said in a recent speech to the National Economists Club.

"We have a crisis in the American high school system," she said. "They're failing to prepare people for college. ... They cannot teach students what they need to know to hold a job."

Mrs. Gates is scornful of the "consumer math" some high schools teach to disadvantaged and minority students, saying such methods may produce good consumers, but students "will struggle to make a living wage in the United States."