The way income and wealth inequality (stratification) has changed over the past decades in the United States today is beneficial for our individual citizens as well as serving the greater good of our American Society.

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CONSIDER THE FOLLOWING PROPOSITION:
“The way income and wealth inequality (stratification) has changed over the past decades in the United States today is beneficial for our individual citizens as well as serving the greater good of our American Society.
”
1. Describe your position regarding the statement above.
2. Present specific data from the chapter or articles that you believe support your conclusions.
3. If you were “in charge” of this country how would you re-design the effort/reward system so that children of the Upper, Middle, Working and Lower Class families all had equal chances to participate in the socio-economic competition for success (This is a difficult question!)?

No Rich Child Left Behind – APRIL 27, 2013, 6:15 PM
By SEAN F. REARDON (Links to an external site.)
Here’s a fact that may not surprise you: the children of the rich perform better in school, on average, than children from middle-class or poor families. Students growing up in richer families have better grades and higher standardized test scores, on average, than poorer students; they also have higher rates of participation in extracurricular activities and school leadership positions, higher graduation rates and higher rates of college enrollment and completion.
Whether you think it deeply unjust, lamentable but inevitable, or obvious and unproblematic, this is hardly news. It is true in most societies and has been true in the United States for at least as long as we have thought to ask the question and had sufficient data to verify the answer.
What is news is that in the United States over the last few decades these differences in educational success between high- and lower-income students have grown substantially.
One way to see this is to look at the scores of rich and poor students on standardized math and reading tests over the last 50 years. When I did this using information from a dozen large national studies conducted between 1960 and 2010, I found that the rich-poor gap in test scores is about 40 percent larger now than it was 30 years ago.
To make this trend concrete, consider two children, one from a family with income of $165,000 and one from a family with income of $15,000. These incomes are at the 90th and 10th percentiles of the income distribution nationally, meaning that 10 percent of children today grow up in families with incomes below $15,000 and 10 percent grow up in families with incomes above $165,000.
In the 1980s, on an 800-point SAT-type test scale, the average difference in test scores between two such children would have been about 90 points; today it is 125 points. This is almost twice as large as the 70-point test score gap between white and black children. Family income is now a better predictor of children’s success in school than race.
The same pattern is evident in other, more tangible, measures of educational success, like college completion. In a study similar to mine, Martha J. Bailey and Susan M. Dynarski, economists at the University of Michigan, found that the proportion of students from upper-income families who earn a bachelor’s degree has increased by 18 percentage points over a 20-year period, while the completion rate of poor students has grown by only 4 points.
In a more recent study, my graduate students and I found that 15 percent of high-income students from the high school class of 2004 enrolled in a highly selective college or university, while fewer than 5 percent of middle-income and 2 percent of low-income students did.
These widening disparities are not confined to academic outcomes: new research by the Harvard political scientist Robert D. Putnam and his colleagues shows that the rich-poor gaps in student participation in sports, extracurricular activities, volunteer work and church attendance have grown sharply as well.
In San Francisco this week, more than 14,000 educators and education scholars have gathered for the annual meeting of the American Educational Research Association (Links to an external site.). The theme this year is familiar: Can schools provide children a way out of poverty?
We are still talking about this despite decades of clucking about the crisis in American education and wave after wave of school reform.Whatever we’ve been doing in our schools, it hasn’t reduced educational inequality between children from upper- and lower-income families.
Part of knowing what we should do about this is understanding how and why these educational disparities are growing. For the past few years, alongside other scholars, I have been digging into historical data to understand just that. The results of this research don’t always match received wisdom or playground folklore.
The most potent development over the past three decades is that the test scores of children from high-income families have increased very rapidly. Before 1980, affluent students had little advantage over middle-class students in academic performance; most of the socioeconomic disparity in academics was between the middle class and the poor. But the rich now outperform the middle class by as much as the middle class outperform the poor. Just as the incomes of the affluent have grown much more rapidly than those of the middle class over the last few decades, so, too, have most of the gains in educational success accrued to the children of the rich.
Before we can figure out what’s happening here, let’s dispel a few myths.
The income gap in academic achievement is not growing because the test scores of poor students are dropping or because our schools are in decline. In fact, average test scores on the National Assessment of Educational Progress (Links to an external site.), the so-called Nation’s Report Card, have been rising — substantially in math and very slowly in reading — since the 1970s. The average 9-year-old today has math skills equal to those her parents had at age 11, a two-year improvement in a single generation. The gains are not as large in reading and they are not as large for older students, but there is no evidence that average test scores have declined over the last three decades for any age or economic group.
The widening income disparity in academic achievement is not a result of widening racial gaps in achievement, either. The achievement gaps between blacks and whites, and Hispanic and non-Hispanic whites have been narrowing slowly over the last two decades, trends that actually keep the yawning gap between higher- and lower-income students from getting even wider. If we look at the test scores of white students only, we find the same growing gap between high- and low-income children as we see in the population as a whole.
It may seem counterintuitive, but schools don’t seem to produce much of the disparity in test scores between high- and low-income students. We know this because children from rich and poor families score very differently on school readiness tests when they enter kindergarten, and this gap grows by less than 10 percent between kindergarten and high school. There is some evidence that achievement gaps between high- and low-income students actually narrow during the nine-month school year, but they widen again in the summer months.
That isn’t to say that there aren’t important differences in quality between schools serving low- and high-income students — there certainly are — but they appear to do less to reinforce the trends than conventional wisdom would have us believe.
If not the usual suspects, what’s going on? It boils down to this: The academic gap is widening because rich students are increasingly entering kindergarten much better prepared to succeed in school than middle-class students. This difference in preparation persists through elementary and high school.
My research suggests that one part of the explanation for this is rising income inequality. As you may have heard, the incomes of the rich have grown faster over the last 30 years than the incomes of the middle class and the poor. Money helps families provide cognitively stimulating experiences for their young children because it provides more stable home environments, more time for parents to read to their children, access to higher-quality child care and preschool and — in places like New York City, where 4-year-old children take tests to determine entry into gifted and talented programs — access to preschool test preparation tutors or the time to serve as tutors themselves.
But rising income inequality explains, at best, half of the increase in the rich-poor academic achievement gap. It’s not just that the rich have more money than they used to, it’s that they are using it differently. This is where things get really interesting.
High-income families are increasingly focusing their resources — their money, time and knowledge of what it takes to be successful in school — on their children’s cognitive development and educational success. They are doing this because educational success is much more important than it used to be, even for the rich.
With a college degree insufficient to ensure a high-income job, or even a job as a barista, parents are now investing more time and money in their children’s cognitive development from the earliest ages. It may seem self-evident that parents with more resources are able to invest more — more of both money and of what Mr. Putnam calls “‘Goodnight Moon’ time” — in their children’s development. But even though middle-class and poor families are also increasing the time and money they invest in their children, they are not doing so as quickly or as deeply as the rich.
The economists Richard J. Murnane (Links to an external site.) and Greg J. Duncan (Links to an external site.) report that from 1972 to 2006 high-income families increased the amount they spent on enrichment activities for their children by 150 percent, while the spending of low-income families grew by 57 percent over the same time period. Likewise, the amount of time parents spend with their children has grown twice as fast since 1975 among college-educated parents as it has among less-educated parents. The economists Garey Ramey (Links to an external site.) and Valerie A. Ramey (Links to an external site.) of the University of California, San Diego, call this escalation of early childhood investment “the rug rat race,” a phrase that nicely captures the growing perception that early childhood experiences are central to winning a lifelong educational and economic competition.
It’s not clear what we should do about all this. Partly that’s because much of our public conversation about education is focused on the wrong culprits: we blame failing schools and the behavior of the poor for trends that are really the result of deepening income inequality and the behavior of the rich.
We’re also slow to understand what’s happening, I think, because the nature of the problem — a growing educational gap between the rich and the middle class — is unfamiliar. After all, for much of the last 50 years our national conversation about educational inequality has focused almost exclusively on strategies for reducing inequalities between the educational successes of the poor and the middle class, and it has relied on programs aimed at the poor, like Head Start and Title I.
We’ve barely given a thought to what the rich were doing. With the exception of our continuing discussion about whether the rising costs of higher education are pricing the middle class out of college, we don’t have much practice talking about what economists call “upper-tail inequality” in education, much less success at reducing it.
Meanwhile, not only are the children of the rich doing better in school than even the children of the middle class, but the changing economy means that school success is increasingly necessary to future economic success, a worrisome mutual reinforcement of trends that is making our society more socially and economically immobile.
We need to start talking about this. Strangely, the rapid growth in the rich-poor educational gap provides a ray of hope: if the relationship between family income and educational success can change this rapidly, then it is not an immutable, inevitable pattern. What changed once can change again. Policy choices matter more than we have recently been taught to think.
So how can we move toward a society in which educational success is not so strongly linked to family background? Maybe we should take a lesson from the rich and invest much more heavily as a society in our children’s educational opportunities from the day they are born. Investments in early-childhood education pay very high societal dividends. That means investing in developing high-quality child care and preschool that is available to poor and middle-class children. It also means recruiting and training a cadre of skilled preschool teachers and child care providers. These are not new ideas, but we have to stop talking about how expensive and difficult they are to implement and just get on with it.
But we need to do much more than expand and improve preschool and child care. There is a lot of discussion these days about investing in teachers and “improving teacher quality,” but improving the quality of our parenting and of our children’s earliest environments may be even more important. Let’s invest in parents so they can better invest in their children.
This means finding ways of helping parents become better teachers themselves. This might include strategies to support working families so that they can read to their children more often.. It also means expanding programs like the Nurse-Family Partnership that have proved to be effective at helping single parents educate their children; but we also need to pay for research to develop new resources for single parents.
It might also mean greater business and government support for maternity and paternity leave and day care so that the middle class and the poor can get some of the educational benefits that the early academic intervention of the rich provides their children. Fundamentally, it means rethinking our still-persistent notion that educational problems should be solved by schools alone.
The more we do to ensure that all children have similar cognitively stimulating early childhood experiences, the less we will have to worry about failing schools. This in turn will enable us to let our schools focus on teaching the skills — how to solve complex problems, how to think critically and how to collaborate — essential to a growing economy and a lively democracy.
Sean F. Reardon (Links to an external site.) is a professor of education and sociology at Stanford.
Copyright 2013 (Links to an external site.) The New York Times Company (Links to an external site.)
2) Poverty in America Is Mainstream
November 2, 2013, New York Times
By Mark Rank
Few topics in American society have more myths and stereotypes surrounding them than poverty, misconceptions that distort both our politics and our domestic policy making.
They include the notion that poverty affects a relatively small number of Americans, that the poor are impoverished for years at a time, that most of those in poverty live in inner cities, that too much welfare assistance is provided and that poverty is ultimately a result of not working hard enough. Although pervasive, each assumption is flat-out wrong.
Contrary to popular belief, the percentage of the population that directly encounters poverty is exceedingly high. My research indicates that nearly 40 percent of Americans between the ages of 25 and 60 will experience at least one year below the official poverty line during that period ($23,492 for a family of four), and 54 percent will spend a year in poverty or near poverty (below 150 percent of the poverty line).
Even more astounding, if we add in related conditions like welfare use, near-poverty and unemployment, four out of five Americans will encounter one or more of these events.
In addition, half of all American children will at some point during their childhood reside in a household that uses food stamps for a period of time.
Put simply, poverty is a mainstream event experienced by a majority of Americans. For most of us, the question is not whether we will experience poverty, but when.
But while poverty strikes a majority of the population, the average time most people spend in poverty is relatively short. The standard image of the poor has been that of an entrenched underclass, impoverished for years at a time. While this captures a small and important slice of poverty, it is also a highly misleading picture of its more widespread and dynamic nature.
The typical pattern is for an individual to experience poverty for a year or two, get above the poverty line for an extended period of time, and then perhaps encounter another spell at some later point. Events like losing a job, having work hours cut back, experiencing a family split or developing a serious medical problem all have the potential to throw households into poverty.
Just as poverty is widely dispersed with respect to time, it is also widely dispersed with respect to place. Only approximately 10 percent of those in poverty live in extremely poor urban neighborhoods. Households in poverty can be found throughout a variety of urban and suburban landscapes, as well as in small towns and communities across rural America. This dispersion of poverty has been increasing over the past 20 years, particularly within suburban areas.
Along with the image of inner-city poverty, there is also a widespread perception that most individuals in poverty are nonwhite. This is another myth: According to the latest Census Bureau numbers, two-thirds of those below the poverty line identified themselves as white — a number that has held rather steady over the past several decades.
What about the generous assistance we provide to the poor? Contrary to political rhetoric, the American social safety net is extremely weak and filled with gaping holes. Furthermore, it has become even weaker over the past 40 years because of various welfare reform and budget cutting measures.
We currently expend among the fewest resources within the industrialized countries in terms of pulling families out of poverty and protecting them from falling into it. And the United States is one of the few developed nations that does not provide universal health care, affordable child care, or reasonably priced low-income housing. As a result, our poverty rate is approximately twice the European average.
Whether we examine childhood poverty, poverty among working-age adults, poverty within single-parent families or overall rates of poverty, the story is much the same — the United States has exceedingly high levels of impoverishment. The many who find themselves in poverty are often shocked at how little assistance the government actually provides to help them through tough times.
Finally, the common explanation for poverty has emphasized a lack of motivation, the failure to work hard enough and poor decision making in life.
Yet my research and that of others has consistently found that the behaviors and attitudes of those in poverty basically mirror those of mainstream America. Likewise, a vast majority of the poor have worked extensively and will do so again. Poverty is ultimately a result of failings at economic and political levels rather than individual shortcomings.
The solutions to poverty are to be found in what is important for the health of any family — having a job that pays a decent wage, having the support of good health and child care and having access to a first-rate education. Yet these policies will become a reality only when we begin to truly understand that poverty is an issue of us, rather than an issue of them.
Mark R. Rank is a professor (Links to an external site.) of social welfare at Washington University and a co-author of the forthcoming book “Chasing the American Dream: Understanding What Shapes our Fortunes.”
3) NEW YORK TIMES
November 27, 2006
Gilded Paychecks – November 27, 2006
Lure of Great Wealth Affects Career Choices
By LOUIS UCHITELLE (Links to an external site.)
A decade into the practice of medicine, still striving to become “a well regarded physician-scientist,” Robert H. Glassman concluded that he was not making enough money. So he answered an ad in the New England Journal of Medicine (Links to an external site.) from a business consulting firm hiring doctors.
And today, after moving on to Wall Street as an adviser on medical investments, he is a multimillionaire.
Such routes to great wealth were just opening up to physicians when Dr. Glassman was in school, graduating from Harvard College in 1983 and Harvard Medical School four years later. Hoping to achieve breakthroughs in curing cancer, his specialty, he plunged into research, even dreaming of a Nobel Prize (Links to an external site.), until Wall Street reordered his life.
Just how far he had come from a doctor’s traditional upper-middle-class expectations struck home at the 20th reunion of his college class. By then he was working for Merrill Lynch (Links to an external site.) and soon would become a managing director of health care investment banking.
“There were doctors at the reunion — very, very smart people,” Dr. Glassman recalled in a recent interview. “They went to the top programs, they remained true to their ethics and really had very pure goals. And then they went to the 20th-year reunion and saw that somebody else who was 10 times less smart was making much more money.”
The opportunity to become abundantly rich is a recent phenomenon not only in medicine, but in a growing number of other professions and occupations. In each case, the great majority still earn fairly uniform six-figure incomes, usually less than $400,000 a year, government data show. But starting in the 1990s, a significant number began to earn much more, creating a two-tier income stratum within such occupations.
The divide has emerged as people like Dr. Glassman, who is 45, latched onto opportunities within their fields that offered significantly higher incomes. Some lawyers and bankers, for example, collect much larger fees than others in their fields for their work on business deals and cases.
Others have moved to different, higher-paying fields — from academia to Wall Street, for example — and a growing number of entrepreneurs have seen windfalls tied largely to expanding financial markets, which draw on capital from around the world. The latter phenomenon has allowed, say, the owner of a small mail-order business to sell his enterprise for tens of millions instead of the hundreds of thousands that such a sale might have brought 15 years ago.
Three decades ago, compensation among occupations differed far less than it does today. That growing difference is diverting people from some critical fields, experts say. The American Bar Foundation, a research group, has found in its surveys, for instance, that fewer law school graduates are going into public-interest law or government jobs and filling all the openings is becoming harder.
Something similar is happening in academia, where newly minted Ph.D.’s migrate from teaching or research to more lucrative fields. Similarly, many business school graduates shun careers as experts in, say, manufacturing or consumer products for much higher pay on Wall Street.
And in medicine, where some specialties now pay far more than others, young doctors often bypass the lower-paying fields. The Medical Group Management Association, for example, says the nation lacks enough doctors in family practice, where the median income last year was $161,000.
“The bigger the prize, the greater the effort that people are making to get it,” said Edward N. Wolff, a New York University (Links to an external site.) economist who studies income and wealth. “That effort is draining people away from more useful work.”
What kind of work is most useful is a matter of opinion, of course, but there is no doubt that a new group of the very rich have risen today far above their merely affluent colleagues.
Turning to Philanthropy
One in every 825 households earned at least $2 million last year, nearly double the percentage in 1989, adjusted for inflation, Mr. Wolff found in an analysis of government data. When it comes to wealth, one in every 325 households had a net worth of $10 million or more in 2004, the latest year for which data is available, more than four times as many as in 1989.
As some have grown enormously rich, they are turning to philanthropy in a competition that is well beyond the means of their less wealthy peers. “The ones with $100 million are setting the standard for their own circles, but no longer for me,” said Robert Frank, a Cornell University (Links to an external site.) economist who described the early stages of the phenomenon in a 1995 book, “The Winner-Take-All Society,” which he co-authored.
Fighting AIDS (Links to an external site.) and poverty in Africa are favorite causes, and so is financing education, particularly at one’s alma mater.
“It is astonishing how many gifts of $100 million have been made in the last year,” said Inge Reichenbach, vice president for development at Yale University (Links to an external site.), which like other schools tracks the net worth of its alumni and assiduously pursues the richest among them.
Dr. Glassman hopes to enter this circle someday. At 35, he was making $150,000 in 1996 (about $190,000 in today’s dollars) as a hematology-oncology specialist. That’s when, recently married and with virtually no savings, he made the switch that brought him to management consulting.
He won’t say just how much he earns now on Wall Street or his current net worth. But compensation experts, among them Johnson Associates, say the annual income of those in his position is easily in the seven figures and net worth often rises to more than $20 million.
“He is on his way,” said Alan Johnson, managing director of the firm, speaking of people on career tracks similar to Dr. Glassman’s. “He is destined to riches.”
Indeed, doctors have become so interested in the business side of medicine that more than 40 medical schools have added, over the last 20 years, an optional fifth year of schooling for those who want to earn an M.B.A. degree as well as an M.D. Some go directly to Wall Street or into health care management without ever practicing medicine.
“It was not our goal to create masters of the universe,” said James Aisner, a spokesman for Harvard Business School, whose joint program with the medical school started last year. “It was to train people to do useful work.”
Dr. Glassman still makes hospital rounds two or three days a month, usually on free weekends. Treating patients, he said, is “a wonderful feeling.” But he sees his present work as also a valuable aspect of medicine.
One of his tasks is to evaluate the numerous drugs that start-up companies, particularly in biotechnology, are developing. These companies often turn to firms like Merrill Lynch for an investment or to sponsor an initial public stock offering. Dr. Glassman is a critical gatekeeper in this process, evaluating, among other things, whether promising drugs live up to their claims.
What Dr. Glassman represents, along with other very rich people interviewed for this article, is the growing number of Americans who acknowledge that they have accumulated, or soon will, more than enough money to live comfortably, even luxuriously, and also enough so that their children, as adults, will then be free to pursue careers “they have a hunger for,” as Dr. Glassman put it, “and not feel a need to do something just to pay the bills.”
In an earlier Gilded Age, Andrew Carnegie argued that talented managers who accumulate great wealth were morally obligated to redistribute their wealth through philanthropy. The estate tax and the progressive income tax later took over most of that function — imposing tax rates of more than 70 percent as recently as 1980 on incomes above a certain level.
Now, with this marginal rate at half that much and the estate tax fading in importance, many of the new rich engage in the conspicuous consumption that their wealth allows. Others, while certainly not stinting on comfort, are embracing philanthropy as an alternative to a life of professional accomplishment.
Bill Gates (Links to an external site.) and Warren Buffett (Links to an external site.) are held up as models, certainly by Dr. Glassman. “They are going to make much greater contributions by having made money and then giving it away than most, almost all, scientists,” he said, adding that he is drawn to philanthropy as a means of achieving a meaningful legacy.
“It has to be easier than the chance of becoming a Nobel Prize winner,” he said, explaining his decision to give up research, “and I think that goes through the minds of highly educated, high performing individuals.”
As Bush administration officials see it — and conservative economists often agree — philanthropy is a better means of redistributing the nation’s wealth than higher taxes on the rich. They argue that higher marginal tax rates would discourage entrepreneurship and risk-taking. But some among the newly rich have misgivings.
Mark M. Zandi is one. He was a founder of Economy.com (Links to an external site.), a forecasting and data gathering service in West Chester, Pa. His net worth vaulted into eight figures with the company’s sale last year to Moody’s Investor Service.
“Our tax policies should be redesigned through the prism that wealth is being increasingly skewed,” Mr. Zandi said, arguing that higher taxes on the rich could help restore a sense of fairness to the system and blunt a backlash from a middle class that feels increasingly squeezed by the costs of health care, higher education, and a secure retirement. The Federal Reserve’s Survey of Consumer Finances, a principal government source of income and wealth data, does not single out the occupations and professions generating so much wealth today. But Forbes magazine offers a rough idea in its annual surveys of the richest Americans, those approaching and crossing the billion dollar mark.
Some routes are of long standing. Inheritance plays a role. So do the earnings of Wall Street investment bankers and the super incomes of sports stars and celebrities. All of these routes swell the ranks of the very rich, as they did in 1989.
But among new occupations, the winners include numerous partners in recently formed hedge funds and private equity firms that invest or acquire companies. Real estate developers and lawyers are more in evidence today among the very rich. So are dot-com entrepreneurs as well as scientists who start a company to market an invention or discovery, soon selling it for many millions. And from corporate America come many more chief executives than in the past.
Seventy-five percent of the chief executives in a sample of 100 publicly traded companies had a net worth in 2004 of more than $25 million mainly from stock and options in the companies they ran, according to a study by Carola Frydman, a finance professor at the Massachusetts Institute of Technology (Links to an external site.)’s Sloan School of Management. That was up from 31 percent for the same sample in 1989, adjusted for inflation.
Chief executives were not alone among corporate executives in rising to great wealth. There were similar or even greater increases in the percentage of lower-ranking executives — presidents, executive vice presidents, chief financial officers — also advancing into the $25 million-plus category.
The growing use of options as a form of pay helps to explain the sharp rise in the number of very wealthy households. But so does the gradual dismantling of the progressive income tax, Ms. Frydman concluded in a recent study.
“Our simulation results suggest that, had taxes been at their low 2000 level throughout the past 60 years, chief executive compensation would have been 35 percent higher during the 1950s and 1960s,” she wrote.
Trying Not to Live Ostentatiously
Finally, the owners of a variety of ordinary businesses — a small chain of coffee shops or temporary help agencies, for example — manage to expand these family operations with the help of venture capital and private equity firms, eventually selling them or taking them public in a marketplace that rewards them with huge sums.
John J. Moon, a managing director of Metalmark Capital, a private equity firm, explains how this process works.
“Let’s say we buy a small pizza parlor chain from an entrepreneur for $10 million,” said Mr. Moon, who at 39, is already among the very rich. “We make it more efficient, we build it from 10 stores to 100 and we sell it to Domino’s for $50 million.”
As a result, not only the entrepreneur gets rich; so do Mr. Moon and his colleagues, who make money from putting together such deals and from managing the money they raise from wealthy investors who provide much of the capital.
By his own account, Mr. Moon, like Dr. Glassman, came reluctantly to the accumulation of wealth. Having earned a Ph.D. in business economics from Harvard in 1994, he set out to be a professor of finance, landing a job at Dartmouth’s Tuck Graduate School of Business, with a starting salary in the low six figures.
To this day, teaching tugs at Mr. Moon, whose parents immigrated to the United States from South Korea. He steals enough time from Metalmark Capital to teach one course in finance each semester at Columbia University (Links to an external site.)’s business school. “If Wall Street was not there as an alternative,” Mr. Moon said, “I would have gone into academia.”
Academia, of course, turned out to be no match for the job offers that came Mr. Moon’s way from several Wall Street firms. He joined Goldman Sachs (Links to an external site.), moved on to Morgan Stanley (Links to an external site.)’s private equity operation in 1998 and stayed on when the unit separated from Morgan Stanley in 2004 and became Metalmark Capital.
As his income and net worth grew, the Harvard alumni association made contact and he started to give money, not just to Harvard, but to various causes. His growing charitable activities have brought him a leadership role in Harvard alumni activities, including a seat on the graduate school alumni council.
Still, Mr. Moon tries to live unostentatiously. “The trick is not to want more as your income and wealth grow,” he said. “You fly coach and then you fly first class and then it is fractional ownership of a jet and then owning a jet. I still struggle with first class. My partners make fun of me.”
His reluctance to show his wealth has a basis in his religion. “My wife and I are committed Presbyterians,” he said. “I would like to think that my faith informs my career decisions even more than financial considerations. That is not always easy because money is not unimportant.”
It has a momentum of its own. Mr. Moon and his wife, Hee-Jung, who gave up law to raise their two sons, are renovating a newly purchased Park Avenue co-op. “On an absolute scale it is lavish,” he said, “but on a relative scale, relative to my peers, it is small.”
Behavior is gradually changing in the Glassman household, too. Not that the doctor and his wife, Denise, 41, seem to crave change. Nothing in his off-the-rack suits, or the cafes and nondescript restaurants that he prefers for interviews, or the family’s comparatively modest four-bedroom home in suburban Short Hills, N.J., or their two cars (an Acura S.U.V. and a Honda Accord) suggests that wealth has altered the way the family lives.
But it is opening up “choices,” as Mrs. Glassman put it. They enjoy annual ski vacations in Utah now. The Glassmans are shopping for a larger house — not as large as the family could afford, Mrs. Glassman said, but large enough to accommodate a wood-paneled study where her husband could put all his books and his diplomas and “feel that it is his own.” Right now, a glassed-in porch, without book shelves, serves as a workplace for both of them.
Starting out, Dr. Glassman’s $150,000 a year was a bit less than that of his wife, then a marketing executive with an M.B.A. from Northwestern. Their plan was for her to stop working once they had children. To build up their income, she encouraged him to set up or join a medical practice to treat patients. Dr. Glassman initially balked, but he was coming to realize that his devotion to research would not necessarily deliver a big scientific payoff.
“I wasn’t sure that I was willing to take the risk of spending many years applying for grants and working long hours for the very slim chance of winning at the roulette table and making a significant contribution to the scientific literature,” he said.
In this mood, he was drawn to the ad that McKinsey & Company, the giant consulting firm, had placed in the New England Journal of Medicine. McKinsey was increasingly working among biomedical and pharmaceutical companies and it needed more physicians on staff as consultants. Dr. Glassman, absorbed in the world of medicine, did not know what McKinsey was. His wife enlightened him. “The way she explained it, McKinsey was like a Massachusetts General Hospital (Links to an external site.) for M.B.A.’s,” he said. “It was really prestigious, which I liked, and I heard that it was very intellectually charged.”
He soon joined as a consultant, earning a starting salary that was roughly the same as he was earning as a researcher — and soon $100,000 more. He stayed four years, traveling constantly and during that time the family made the move to Short Hills from rented quarters in Manhattan.
Dr. Glassman migrated to Merrill Lynch in 2001, first in private equity, which he found to be more at the forefront of innovation than consulting at McKinsey, and then gradually to investment banking, going full time there in 2004.
Linking Security to Income
Casey McCullar hopes to follow a similar circuit. Now 29, he joined the Marconi Corporation, a big telecommunications company, in 1999 right out of the University of Texas (Links to an external site.) in Dallas, his hometown. Over the next six years he worked up to project manager at $42,000 a year, becoming quite skilled in electronic mapmaking.
A trip to India for his company introduced him to the wonders of outsourcing and the money he might make as an entrepreneur facilitating the process. As a first step, he applied to the Tuck business school at Dartmouth, got in and quit his Texas job, despite his mother’s concern that he was giving up future promotions and very good health insurance, particularly Marconi’s dental plan.
His life at Tuck soon sent him in still another direction. When he graduates next June he will probably go to work for Mercer Management Consulting, he says. Mercer recruited him at a starting salary of $150,000, including bonus. “If you had told me a couple of years ago that I would be making three times my Marconi salary, I would not have believed you,” Mr. McCullar said.
Nearly 70 percent of Tuck’s graduates go directly to consulting firms or Wall Street investment houses. He may pursue finance later, Mr. McCullar says, always keeping in mind an entrepreneurial venture that could really leverage his talent.
“When my mom talks of Marconi’s dental plan and a safe retirement,” he said, “she really means lifestyle security based on job security.”
But “for my generation,” Mr. McCullar said, “lifestyle security comes from financial independence. I’m doing what I want to do and it just so happens that is where the money is.”

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