Tag Archives: social mobility

The Great Gatsby Curve

There’s nothing like being lectured about work by a “princess.”

Recently, Ivanka Trump responded to the introduction of the Green New Deal’s provision for a government jobs guarantee with a dismissive remark to the effect that Americans prefer to work for what they get, and want to live in a country with the potential for social mobility.

Paul Krugman was on the case.

O.K., this was world-class lack of self-awareness: It doesn’t get much better than being lectured on self-reliance by an heiress whose business strategy involves trading on her father’s name. But let’s go beyond the personal here. We know a lot about upward mobility in different countries, and the facts are not what Republicans want to hear.

The key observation, based on a growing body of research, is that when it comes to upward social mobility, the U.S. is truly exceptional — that is, it performs exceptionally badly. Americans whose parents have low incomes are more likely to have low incomes themselves, and less likely to make it into the middle or upper class, than their counterparts in other advanced countries. And those who are born affluent are, correspondingly, more likely to keep their status.

As Krugman notes, Americans like to believe that we “made it on our own,” that we “pulled ourselves up by our bootstraps” (a phrase that tends to infuriate me, since it entirely ignores the fact that large portions of the American public don’t have anything that could remotely be considered “bootstraps.”)

Then he provides the data.

Among advanced countries, there is a strong negative correlation between inequality and mobility, sometimes referred to as the “Great Gatsby curve.” This makes sense. After all, huge disparities in parents’ income tend to translate into large disparities in children’s opportunities.

And people do, by the way, seem to understand this point. Many Americans don’t realize how unequal our society really is; when given facts about income inequality, they become more likely to believe that coming from a wealthy family plays a big role in personal success.

I had never run across the “Great Gatsby curve,” but it makes sense. Everyone who raises children implicitly understands that those children’s prospects are tied to the quality of the education we provide for them, very much including the enrichment that comes with their extra-curricular experiences. That’s why homes in districts with good schools sell at a premium, why parents shell out eye-popping amounts for summer camps, music lessons and sports equipment.

The “princess” may be unaware that large numbers of Americans simply cannot afford those things–and when they can’t, social mobility suffers accordingly.

Back to the “potential for upward mobility”: Where do people from poor or modest backgrounds have the best chance of getting ahead? The answer is that Scandinavia leads the rankings, although Canada also does well. And here’s the thing: The Nordic countries don’t just have low inequality, they also have much bigger governments, much more extensive social safety nets, than we do. In other words, they have what Republicans denounce as “socialism” (it really isn’t, but never mind).

To put it in terms even a clueless Princess might understand, a generous social safety net provides the bootstraps that allow people to pull themselves up.

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Another Unequal New Year?

This is the last day of 2016, a year that most definitely will not be missed. It’s hard to know whether people of good will can make 2017 any better.

The United States will begin the new year by ushering in a President who promises to “make America great again.” Unfortunately, with every utterance and tweet, it becomes more obvious that his definition of “greatness” is an autocratic wet dream unconnected to either the common good or reality.

As discouraging as it may be to admit, the truth is that a significant percentage of the American public is equally delusional, especially when it comes to accurate assessments of the extent of current inequality, and America’s past economic “greatness.”

A 2015 article in Scientific American took a look at both myth and reality. It was titled “American Inequality: It’s Much Worse Than You Think,” and subtitled, “The great divide between our beliefs, our ideals, and reality.”

The average American believes that the richest fifth own 59% of the wealth and that the bottom 40% own 9%. The reality is strikingly different. The top 20% of US households own more than 84% of the wealth, and the bottom 40% combine for a paltry 0.3%. The Walton family, for example, has more wealth than 42% of American families combined.

Remember this infographic video that went viral several months ago? According to the article, it has been watched more than 16 million times.  I was one of those who was shocked by the distribution of wealth it showed, and I actually follow these matters fairly closely.

The great virtue of the Scientific American article, however, was not in schooling readers about the present chasm between the rich and the rest; it was in puncturing our ahistorical and fanciful belief that in America, success is an artifact of effort and hard work, that anyone willing to invest the necessary grit and determination can “make it,” and that American meritocracy means that entrepreneurial workers are not doomed to remain in whatever poverty or class they are born to.

It’s a lovely belief. The brutal reality, however, is very different.

In a study published early in 2015,

researchers found Americans overestimate the amount of upward social mobility that exists in society. They asked some 3,000 people to guess the chance that someone born to a family in the poorest 20% ends up as an adult in the richer quintiles. Sure enough, people think that moving up is significantly more likely than it is in reality. Interestingly, poorer and politically conservative participants thought that there is more mobility than richer and liberal participants…. We may not want to believe it, but the United States is now the most unequal of all Western nations. To make matters worse, America has considerably less social mobility than Canada and Europe.

This belief in American economic mobility doesn’t simply ignore the immense importance of family wealth and social connections, access to educational equality, and a wide range of discriminatory obstacles and structural social barriers.

Our stubborn belief in an American economic mobility that doesn’t exist creates an unwarranted optimism—an optimism that, ironically, is more prevalent among those at the bottom of the income distribution. And because we are optimistic—because we see opportunities that aren’t really there—we don’t get serious about correcting the social and financial structures that keep poor people poor.

The people who agreed with Trump that America was “great” at some indeterminate point in the past but is no longer so blessed seem to fall into two not mutually exclusive categories: those who resent the advancements of women, people of color and immigrants (America was great when “they” knew their place); and those who believe the mythology of a “lost” American mobility.

What would be great would be to make 2017 the year we began to restore content to our belief in American mobility and civic equality. A girl can dream….

Happy New Year.

 

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Remember the American Dream?

Watching Donald Trump trash immigrants and refer none-too-obliquely to people who are less fortunate as “losers”—all while wearing a hat emblazoned with the slogan “Make America Great Again”– is depressing me. The fact that he is currently leading the GOP pack deepens that depression considerably.

Let’s deconstruct the notion of American “greatness.” Contrary to Trump’s (and others’) dog whistles, to the extent that the country’s greatness was real, it wasn’t because those who ran the show were white Christians of European origin. It was because we offered people who had very little a chance to improve their condition.

When I was growing up, the accepted description of America was “land of opportunity.” It was commonly believed that the American Dream could be attained by anyone willing to work hard; social mobility was the name of the game.

Cynics will point out—accurately—that the promise often exceeded the reality, but there was and is value in the widespread belief that personal responsibility and hard work could pay off, if not for yourself, at least for your children.

Knowing that poverty isn’t necessarily permanent is hugely important in a capitalist system. Inequalities may be inevitable, but they need not be paralyzing, they need not engender the sorts of simmering resentments that lead to social unrest, if they are seen as temporary and (fairly or unfairly) a reflection of the effort and entrepreneurship of the individual rather than an inevitable aspect of the system.

We are beginning to see what happens when belief in the possibility of social mobility declines, when it becomes all-too-apparent that no matter how talented, diligent and industrious they may be, Americans can no longer work themselves into the middle class.

Thanks to short-sighted and mean-spirited public policies, such social mobility as previously characterized our economic system is largely a thing of the past.

In a column written a couple of years ago, Gail Collins put it bluntly:

“We have no bigger crisis as a nation than the class barrier. We’re near the bottom of the industrialized world when it comes to upward mobility. A child born to poor parents has a pathetic chance of growing up to be anything but poor. This isn’t the way things were supposed to be in the United States. But here we are.”

Social scientists have documented the characteristics of stable democracies–the attitudes and institutions that keep societies from erupting, that strengthen the social fabric rather than shred it. A perception that the government “plays fair” and a belief in opportunity for advancement–a belief that effort and diligence will be rewarded–are among them.

When poor people lose hope–when the belief in the possibility of bettering their condition disappears, and they face the fact that social mobility is rapidly becoming a myth and the American Dream is out of reach–they become people with nothing to lose.

And that’s dangerous.

Bernie Sanders is drawing huge crowds, because he is talking about inequality and fundamental fairness, and offering specific policy proposals to address systemic issues.

The Donald is drawing sizable crowds by pandering to the resentments of people who have been unable to realize their own American dreams–by telling them that their problems aren’t due to systemic inequities, but to nefarious “others” (immigrants, minorities, women).

Neither of them is likely to be the next President, but they are stark representations of the choice America faces, of the fork in our national road. We can choose nativism, civic unrest and continued decline, or we can do the hard but necessary work of restoring the social contract, repairing the social safety net and breathing new life into the American Dream.

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Betraying the American Dream

When I was growing up, the accepted description of America was “land of opportunity.” It was commonly believed that the American Dream could be attained by anyone willing to work hard; social mobility was the name of the game.

Knowing that poverty isn’t necessarily permanent is hugely important in a capitalist system. Inequalities are inevitable, but they need not be paralyzing, they need not engender the sorts of simmering resentments that lead to social unrest, because they are seen as temporary and (fairly or unfairly) a reflection of the effort and entrepreneurship of the individual.

We are beginning to see what happens when it becomes apparent that Americans can no longer work themselves into the middle class. Thanks to short-sighted and mean-spirited public policies, such social mobility as previously characterized our economic system (it was probably never as obtainable as national mythology had it) is largely a thing of the past.

In a column addressing the need for high quality early childhood education, Gail Collins put it bluntly: “We have no bigger crisis as a nation than the class barrier. We’re near the bottom of the industrialized world when it comes to upward mobility. A child born to poor parents has a pathetic chance of growing up to be anything but poor. This isn’t the way things were supposed to be in the United States. But here we are.”

In his recent book on inequality, Nobel-prize winning economist Joseph Stiglitz underlined the current lack of social mobility in America–and its unpleasant consequences.

We have a problem, and it isn’t temporary, isn’t a result of the recent economic downturn. Social scientists have documented the characteristics of stable democracies–the attitudes and institutions that keep societies from erupting, that strengthen the social fabric rather than tearing it. A perception that the government “plays fair” and a belief in opportunity for advancement–a belief that effort and diligence will be rewarded–are among them.

In his State of the Union speech, President Obama proposed two measures–universal access to preschool and raising the minimum wage–that would begin, however modestly, to address the problem. There is ample research connecting early childhood education to later economic well-being. There is equally persuasive research rebutting the proposition that a higher minimum wage means fewer jobs. (The latter proposition seems so logical, I used to believe it was self-evident; a copious amount of research, however, shows otherwise.)

The “usual suspects” met the President’s proposals with their usual screams of “socialism.” Those usual suspects, however, should rethink their support of the status quo. When poor people lose hope–when the belief in the possibility of bettering their condition disappears, and they face the fact that social mobility is rapidly becoming a myth and the American Dream is out of reach–they become people with nothing to lose. Eventually, they take to the streets and threaten the comfortable.

What’s that old line? Pigs get fed, but hogs get slaughtered.

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