Hard work is often touted as the key American virtue that leads to success and opportunity. And there’s lots of evidence to suggest that workers buy into the belief: For example, a recent study found that Americans work 25 percent more hours than Europeans, and that U.S. workers tend to take fewer vacation days and retire later in life. But for many, simply working hard doesn’t actually lead to a better life.
In the past, economists have acknowledged that citing hard work as the path to prosperity is overly simplistic and optimistic. Ultimately, whether hard work alone can lift people into better economic conditions is a more complex question. The formula only works if an individual’s efforts are met with opportunities for a better life. According to research, it’s getting harder and harder for Americans to move up the income ladder.
A new poll from the Strong, Prosperous and Resilient Communities Challenge (SPARCC), an initiative to bolster local economies, found that Americans are quite skeptical of the narrative connecting wealth with personal agency. SPARCC found that 74 percent of those surveyed believed that most poor people work hard, but aren’t able to work their way out of poverty due to the lack of economic opportunities. In the U.S., 19 percent of income inequality is attributed to predetermined circumstances such as a person’s race, gender, and parental income. The SPARCC report also points to past research showing that economic mobility and health outcomes are greatly affected by geography as evidence that individual hard work won’t ensure success because opportunities aren’t evenly distributed.
The hard-work argument also plays into the policy discussion around inequality. As Katharine Bradbury and Robert Triest, both economists at the Federal Reserve Bank of Boston, write:
Increased inequality may result from increased risk taking and entrepreneurship in an environment of rapid technological change, with some entrepreneurs producing better, or just luckier, innovations than others, and reaping greater rewards. It may also result from increased disparities in work effort, with more industrious individuals earning higher incomes as a result of their greater effort. In both these cases, one could argue convincingly that the increase in inequality is justified and that no remedial changes in public policy are needed. On the other hand, if the increase in inequality results mostly from factors largely beyond the ability of individuals to control or counteract, then a strong case can be made for a public policy response.
Bradbury and Triest say that without policy interventions, the inequality of opportunity is likely to persist while economic mobility deteriorates. SPARCC, for its part, is hoping to achieve greater mobility through community-development investments in six cities. The initiative is a three-year, $90 million collaboration between the Federal Reserve Bank of San Francisco, Enterprise Community Partners, the Low Income Investment Fund, Natural Resources Defense Council, and a handful of foundations.
Restoring economic mobility is an especially crucial factor for those at the bottom: Of the children born in the bottom income quintile, 44 percent are still there as adults. That’s an economic problem, but it’s a deeper one as well, one that gets to the heart of what the American Dream is and who has access to it.