Mobility Impaired, Harder for Americans to Rise From Lower Rungs

Are people better off today than previous generations?  Is the "American Dream" still alive or has it died a slow death?  What is the "American Dream"?  I'm sure if you asked enough people you would get a plethora of responses both positive and negative.  


In this post I present two somewhat opposing views.  The first article from the NYT, Harder for Americans to Rise From Lower Rungs takes the view that we are indeed worse off than previous generations.  The second piece comes from the National Review,  Mobility Impaired and it takes the more conservative approach that the US has it's problem but there is still a future here.


The truth probably runs somewhere between this two stories.  Bottom line there isn't anywhere else I would rather live given the opportunities that this country provides for it's citizens.  Our government may dysfunctional but we still have the framework of a free democracy.


From Harder for Americans to Rise From Lower Rungs

• But many researchers have reached a conclusion that turns conventional wisdom on its head: Americans enjoy less economic mobility than their peers in Canada and much of Western Europe. The mobility gap has been widely discussed in academic circles, but a sour season of mass unemployment and street protests has moved the discussion toward center stage.
• One reason for the mobility gap may be the depth of American poverty, which leaves poor children starting especially far behind. Another may be the unusually large premiums that American employers pay for college degrees. Since children generally follow their parents’ educational trajectory, that premium increases the importance of family background and stymies people with less schooling.
• At least five large studies in recent years have found the United States to be less mobile than comparable nations. A project led by Markus Jantti, an economist at a Swedish university, found that 42 percent of American men raised in the bottom fifth of incomes stay there as adults. That shows a level of persistent disadvantage much higher than in Denmark (25 percent) and Britain (30 percent) — a country famous for its class constraints.
• Meanwhile, just 8 percent of American men at the bottom rose to the top fifth. That compares with 12 percent of the British and 14 percent of the Danes.
• Despite frequent references to the United States as a classless society, about 62 percent of Americans (male and female) raised in the top fifth of incomes stay in the top two-fifths, according to research by the Economic Mobility Project of the Pew Charitable Trusts. Similarly, 65 percent born in the bottom fifth stay in the bottom two-fifths.
• While Europe differs from the United States in culture and demographics, a more telling comparison may be with Canada, a neighbor with significant ethnic diversity. Miles Corak, an economist at the University of Ottawa, found that just 16 percent of Canadian men raised in the bottom tenth of incomes stayed there as adults, compared with 22 percent of Americans. Similarly, 26 percent of American men raised at the top tenth stayed there, but just 18 percent of Canadians.
• Some conservatives say this measure, called absolute mobility, is a better gauge of opportunity. A Pew study found that 81 percent of Americans have higher incomes than their parents (after accounting for family size). There is no comparable data on other countries.
• Even by measures of relative mobility, Middle America remains fluid. About 36 percent of Americans raised in the middle fifth move up as adults, while 23 percent stay on the same rung and 41 percent move down, according to Pew research. The “stickiness” appears at the top and bottom, as affluent families transmit their advantages and poor families stay trapped. 
• “The bottom fifth in the U.S. looks very different from the bottom fifth in other countries,” said Scott Winship, a researcher at the Brookings Institution, who wrote the article for National Review. “Poor Americans have to work their way up from a lower floor.”
• “Upper-income families can invest more in their children’s education and they may have a better understanding of what it takes to get a good education,” said Eric Wanner, president of the Russell Sage Foundation, which gives grants to social scientists.

From Mobility Impaired

• One way to assess the extent of mobility is to ask whether people tend to be better off than their parents were at the same age — whether they experience upwardabsolute mobility. Research for EMP conducted by my colleagues at the Brookings Institution Julia Isaacs, IsabelSawhill, and Ron Haskins shows that two-thirds of 40-year-old Americans are in households with larger incomes than their parents had at the same age, even taking into account the fact that the costof living has risen. That’s pretty impressive, but it actually understates the improvement between generations. Household size declined over these decades, so incomes now are divided up among fewer family members, leaving them better off than bigger households of the past. Another EMP study shows that when incomes are adjusted for household size, four out of five adults today are better off than their parents were at the same age.
• The EMP/Brookings analyses break the parent and child generations into fifths on the basis of each generation’s income distribution. If being raised in the bottom fifth were not a disadvantage and socioeconomic outcomes were random, we would expect to see 20 percent of Americans who started in the bottom fifth remain there as adults, while 20 percent would end up in each of the other fifths. Instead, about 40 percent are unable to escape the bottom fifth. This trend holds true for other measures of mobility: About 40 percent of men will end up in low-skill work if their fathers had similar jobs, and about 40 percent will end up in the bottom fifth of family wealth (as opposed to income) if that’s where their parents were.
• In fact, if the last generation is any guide, your child growing up in the top two-fifths today will have a 60 percent chance of being in the top two fifths as an adult. That’s the impact of picking the right parents — increasing the chances of ending up middle- to upper-middle class by a factor of three or four. 
• If the size of the boost that children get from greater parental income differs between countries, that could be either because parental income buys more access to the best opportunities in one country than it does in the other, or because the best opportunities are compensated more highly in one country than the other. It may be no more unusual for Americans from modest origins to become top executives than it is for similarly situated Danes, but American CEOs make a lot more money than Danish CEOs do. In this scenario, it’s not that opportunities to obtain the best slots in the United States are less fairly distributed than in other countries, it’s simply much more lucrative to occupy those slots here.
• Recent research indicates that the link between parental income and educational advantages on one hand and child academic outcomes on the other is stronger in the United States than in other Western countries. So it may be that higher pay for better slots and narrower opportunities to occupy the best slots both now contribute to lower earnings mobility in the United States. Still, our country does not look particularly bad in terms of occupational mobility — the degree of similarity between the desirability of parents’ and children’s jobs. And in the broadest sense, that may be the best measure of opportunity for different slots.
• What is clear is that in at least one regard American mobility is exceptional: not in terms of downward mobility from the middle or from the top, and not in terms of upward mobility from the middle — rather, where we stand out is in our limited upward mobility from the bottom. And in particular, it’s American men who fare worse than their counterparts in other countries. One study compared the United States with Denmark, Norway, Sweden, Finland, and the United Kingdom. It found that in each country, whether looking at sons or at daughters, 23 to 30 percent of children whose fathers were in the bottom fifth of earnings remained in the bottom fifth themselves as adults — except in the United States, where 42 percent of sons remained there
• Of course, one-fifth of the population has to be in the bottom fifth, but that quintile does not have to be filled so disproportionately with the children of disadvantaged parents. Many people in the bottom fifth are likely to have made the same bad choices as their parents before them. Different people will hold them more or less accountable for their shortcomings, and that is a major fault line of American politics. 
• Broad-based economic growth, international competitiveness, and the ideals composing the American Dream all require that policymakers heed Governor Daniels’s call. Increasing upward absolute mobility — for all, but with a particular focus on those who start out at the bottom — should be the primary goal of policymakers. The first political party that commits itself to putting upward mobility first and that credibly takes on the challenge will be ascendant.