Land of opportunity

I recently had the opportunity to debate the Horatio Alger myth with some other Williamsites. They reckoned that social mobility is alive, well, and healthy in America, and that hard work will carry anyone - anyone - through. I pointed out that America was more stratified than it was 30 years ago, and that in conditions of bad social mobility the "working hard always brings success" idea(l) places the blame for poverty on the poor.

Since then, I've looked up some of the statistics on social mobility and class in America. But, before I start in on those, it's worth it to define what social mobility means: it's equality of opportunity. Under conditions of perfect social mobility, a child from a poor family would have the same chance of ending up as a rich adult (or a poor adult) as a child from a rich family.

To break this down statistically, perfect social mobility would mean that, of all children growing up in the bottom quartile of family incomes, about 25% would end up in the top quartile of income, 25% in the second quartile, 25% in the third quartile, and 25% would remain in the bottom quartile. And so on and so forth for children in the other 3 quartiles of family income. This, however, is not the case in today's America.

'Upward mobility' in real decline, studies charge
Actually, it is about two or three times as difficult for children of poor families to rise above their economic circumstances as economists reckoned in the 1970s and 1980s, he adds. "There was a bit of wishful thinking about equality of opportunity."

Further, the children of rich parents very seldom slide into the bottom half of the income ladder. Most retain at least a major chunk of their inherited wealth.
[...]
Bhash Mazumder, a Federal Reserve Bank of Chicago economist, calculates that on average fully 60 percent of the income gap between any two people in one generation persists into the next generation.

In the 1980s, studies found that only 20 percent of the income gap persisted. But improvements in econometrics show a gloomier picture - that poverty may well endure over several generations.

Declining Social Mobility in the US

• A classic social survey in 1978 found that 23% of adult men who had been born in the bottom fifth of the population (as ranked by social and economic status) had made it into the top fifth. Earl Wysong of Indiana University and two colleagues recently decided to update the study. They compared the incomes of 2,749 father-and-son pairs from 1979 to 1998 and found that few sons had moved up the class ladder. Nearly 70% of the sons in 1998 had remained either at the same level or were doing worse than their fathers in 1979.


• In the 1990s 36% of those who started in the second-poorest 20% stayed put, compared with 32% in the 1980s and 28% in the 1970s.


• A study by Thomas Hertz, an economist at American University, found that 42% of those born into the poorest fifth ended up where they started—at the bottom. Another 24% moved up slightly to the next-to-bottom group. Only 6% made it to the top fifth. On the other hand, 37% of those born into the top fifth remained there, whereas barely 7% of those born into the top 20% ended up in the bottom fifth.


• Two economists at the Federal Reserve Bank of Boston analysed family incomes over three decades. They found that 40% of families remained stuck in the same income bracket in the 1990s, compared with 37% of families in the 1980s and 36% in the 1970s.

Log Cabin to White House? Not Any More
[T]he cost of going to university over the last 25 years has exploded. The average cost of tuition fees and room and board has risen fourfold since 1977 to an average of $10,315 (£7,264) today; the overall average masks a stark contrast between the average cost of study at private universities at $17,613 (£12,403) and public universities at $7,013 (£4,938).

Yet as costs have risen, federal and state support to help fund students' costs has both declined, and been refocused on the middle class. In 1965, the Pell grant, the largest federal program for poor students, covered 85 per cent of the cost of four years at a public university; in 2000, it covered just 39 per cent of the bill. Meanwhile, the Hope Scholarship, introduced by President Clinton, provides up to $3,000 of tax credits to fund university education but it goes mainly to families earning between $30,000 and $90,000 (£21,126 to £63,380) whose children would have gone to college anyway. States have cut their support on average by 32 per cent since 1979.

The result of this vicious scissor movement - rising costs cutting against falling state and federal support - is a calamitous drop in the chances of a poor student acquiring a university degree, and this in an environment where there are negligible alternative forms of vocational and formal education.
[...]
[Compared to the four biggest European economies and three Scandinavian economies,] the US has the lowest share of workers moving from the bottom fifth of workers into the second fifth, the lowest share moving into the top 60 per cent and the highest share of workers unable to sustain full-time employment. The most exhaustive study by the OECD confirms the poor rates of relative upward mobility for very low-paid American workers; it also found that full-time workers in Britain, Italy and Germany enjoy much more rapid growth in their earnings than those in the US, who rank roughly equal with the French. However, downward mobility was more marked in the US; American workers are more likely to suffer a reduction in their real earnings than workers in Europe - the log cabin to White House effect in reverse.

Sorry to be so lazy about this - I'm just going to let you think out this matter out for yourselves. Rising inequality in America; decreasing social mobility. This does not exactly eradicate Horatio Alger stories - after all, it is still possible to work hard and get rich even if you've started at the bottom. But strong evidence suggests that those who do so have also gotten rather lucky. Opportunities - for education, for health care, for jobs - are not equal in this country.

Does anyone else think it's time for a change or something?