What Land of Opportunity?

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I was glad to see Jason DeParle's piece in the NYT about America's disappointing record on economic mobility. One thing I learned: some conservatives have actually mentioned the issue.

Former Senator Rick Santorum of Pennsylvania, a Republican candidate for president, warned this fall that movement "up into the middle income is actually greater, the mobility in Europe, than it is in America." National Review, a conservative thought leader, wrote that "most Western European and English-speaking nations have higher rates of mobility." Even Representative Paul D. Ryan, a Wisconsin Republican who argues that overall mobility remains high, recently wrote that "mobility from the very bottom up" is "where the United States lags behind."

Interesting that not all conservatives are content with platitudes about the land of opportunity. However, most do seem to be. To put it mildly, the right doesn't give the question the emphasis it deserves. Then again, nor does the left. As I noted previously, US liberals let their preoccupation with inequality distract them. They find high incomes more upsetting than poverty.

Obama, to his credit, talked about mobility in his Osawatomie speech--but folded these points into a main narrative about "gaping inequality", thus (I argued) burying the more important question. Cast the central challenge of American governance as the 1 percent against the 99 percent, and the more pressing problem--the bottom 20 percent--becomes a footnote.

So I disagree with DeParle about one thing: mass unemployment hasn't moved the issue of mobility toward center stage. Not yet anyway. It should have, but it hasn't. Still, every article helps.

You might be interested in a piece I wrote for the Atlantic on the subject in 2007: Rags to Rags, Riches to Riches. Here's an extract.

The American model has been regarded as proposing a kind of bargain. This is not Europe: Here, idleness and incompetence are sternly punished--but merit gets rewarded. Much more than elsewhere, your class background will neither prop you up nor hold you back. If you deserve to succeed, you will.

It is an inspiring, energizing offer--and still a profoundly influential one. It colors the national debate about taxes, health care, and other aspects of economic policy. But it is false advertising.

Most researchers now give America much lower marks than they used to for intergenerational economic mobility--the ease with which successive generations move up or down relative to their parents. As flaws in early postwar studies have been addressed, estimates of mobility have fallen. Before the 1990s, researchers tended to put the correlation between parents' incomes and their children's at around 20 percent, implying a high degree of mobility between generations. (Zero would imply no connection at all; a correlation of 100 percent would imply that parents' incomes entirely determined the incomes of their children.) In the 1990s, using better data and techniques, experts tended to put that figure at about 40 percent. Recent estimates run as high as 60 percent. The finding is not that mobility has fallen since World War II--the studies point to no clear trend. It is that as methods of measuring mobility have improved, the result, across a span of recent decades, has gotten worse. The earlier view that postwar America was an economically mobile society is less and less borne out. Perhaps it was once (before data became available to track such things accurately); but it isn't now.

More telling, maybe, is the international comparison. America stands lower in the ranking of income mobility than most of the countries whose data allow the comparison, scoring worse than Canada, all of the Scandinavian countries, and possibly even Germany and Britain (the data are imperfect, and different studies give slightly different results).

Strikingly, the research suggests that mobility within America's middle-income bands is similar to that in many other countries. The stickiness is at the top and the bottom. According to one much-cited study, for instance, more than 40 percent of American boys born into the poorest fifth of the population stay there; the figure for Britain is 30 percent, for Denmark just 25 percent. In America, more than in other advanced economies, poor children stay poor. Other data show that in America, more than in, say, Britain, rich children stay rich as well.
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Clive Crook is a senior editor of The Atlantic and a columnist for Bloomberg View. He was the Washington columnist for the Financial Times, and before that worked at The Economist for more than 20 years, including 11 years as deputy editor. Crook writes about the intersection of politics and economics. More

Crook writes about the intersection of politics and economics.

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