Harder for Americans to Rise From Lower Rungs
By JASON DePARLE
WASHINGTON — Benjamin Franklin did it. Henry Ford did it.
And American life is built on the faith that others can do it, too: rise from
humble origins to economic heights. “Movin’ on up,” George Jefferson-style, is
not only a sitcom song but a civil religion.
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.
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.”
Liberal commentators have long emphasized class, but the
attention on the right is largely new.
“It’s becoming conventional wisdom that the U.S. does not
have as much mobility as most other advanced countries,” said Isabel V.
Sawhill, an economist at the Brookings Institution. “I don’t think you’ll find
too many people who will argue with that.”
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.
By emphasizing the influence of family background, the
studies not only challenge American identity but speak to the debate about
inequality. While liberals often complain that the United States has unusually
large income gaps, many conservatives have argued that the system is fair because
mobility is especially high, too: everyone can climb the ladder. Now the
evidence suggests that America is not only less equal, but also less mobile.
John Bridgeland, a former aide to President George W. Bush
who helped start Opportunity Nation, an effort to seek policy solutions,
said he was “shocked” by the international comparisons. “Republicans will not
feel compelled to talk about income inequality,” Mr. Bridgeland said. “But
they will feel a need to talk about a lack of mobility — a lack of access to
the American Dream.”
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.
“Family background plays more of a role in the U.S. than in
most comparable countries,” Professor Corak said in an interview.
Skeptics caution that the studies measure “relative
mobility” — how likely children are to move from their parents’ place in the
income distribution. That is different from asking whether they have more
money. Most Americans have higher incomes than their parents because the
country has grown richer.
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.
Since they require two generations of data, the studies also
omit immigrants, whose upward movement has long been considered an American
strength. “If America is so poor in economic mobility, maybe someone should
tell all these people who still want to come to the U.S.,” said Stuart M.
Butler, an analyst at the Heritage Foundation.
The income compression in rival countries may also make them
seem more mobile. Reihan Salam, a writer for The Daily and National Review
Online, has calculated that a Danish family can move from the 10th percentile
to the 90th percentile with $45,000 of additional earnings, while an American
family would need an additional $93,000.
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.
While Americans have boasted of casting off class since Poor
Richard’s Almanac, until recently there has been little data.
Pioneering work in the early 1980s by Gary S. Becker, a
Nobel laureate in economics, found only a mild relationship between fathers’
earnings and those of their sons. But when better data became available a
decade later, another prominent economist, Gary Solon, found the bond twice as
strong. Most researchers now estimate the “elasticity” of father-son earnings
at 0.5, which means that for every 1 percent increase in a father’s income, his
sons’ income can be expected to increase by about 0.5 percent.
In 2006 Professor Corak reviewed more than 50
studies of nine countries. He ranked Canada, Norway, Finland and Denmark as the
most mobile, with the United States and Britain roughly tied at the other
extreme. Sweden, Germany, and France were scattered across the middle.
The causes of America’s mobility problem are a topic of
dispute — starting with the debates over poverty.
The United States maintains a
thinner safety net than other rich countries, leaving more children vulnerable
to debilitating hardships.
Poor Americans are also more likely than foreign peers to
grow up with single mothers. That places them at an elevated risk of
experiencing poverty and related problems, a point frequently made by Mr.
Santorum, who surged into contention in the Iowa caucuses. The United States
also has uniquely high incarceration rates, and a longer history of racial
stratification than its peers.
“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.”
A second distinguishing American trait is the pay tilt
toward educated workers. While in theory that could help poor children rise —
good learners can become high earners — more often it favors the children of
the educated and affluent, who have access to better schools and arrive in them
more prepared to learn.
“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.
The United States is also less unionized than many of its
peers, which may lower wages among the least skilled, and has public health
problems, like obesity and diabetes, which can limit education and employment.
Perhaps another brake on American mobility is the sheer
magnitude of the gaps between rich and the rest — the theme of the Occupy Wall
Street protests, which emphasize the power of the privileged to protect their
interests. Countries with less equality generally have less mobility.
Mr. Salam recently wrote that relative mobility “is
overrated as a social policy goal” compared with raising incomes across the
board. Parents naturally try to help their children, and a completely mobile
society would mean complete insecurity: anyone could tumble any time.
But he finds the stagnation at the bottom alarming and warns
that it will worsen. Most of the studies end with people born before 1970,
while wage gaps, single motherhood and incarceration increased later. Until
more recent data arrives, he said, “we don’t know the half of it.”
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