The United States has great economic inequality, but the American narrative is that upward mobility is not only possible but the normal order of things. This narrative has many components. One is the idea that each generation will (or should) do better than the previous. Another is that individuals can use their talents, gumption and a bit of luck to rise from humble beginnings. This general narrative is typically accompanied by specific anecdotes, such as the popular tales of Steve Jobs, Bill Gates and Mark Zuckerberg.
While narratives and anecdotes can be interesting, they are not a substitute for evidence. After all, anecdotes can and often are about cases that are unusual rather than what is supported by statistical evidence. This is why there is a fallacy called anecdotal evidence. This fallacy is committed when a person draws a conclusion about a population based on an anecdote (a story) about one or a very small number of cases. It is also committed when someone rejects statistical data supporting a claim in favor of a single or small number of examples that go against the claim.
Unfortunately, the United States is a high inequality and low mobility country. Years ago, Esmé Deprez appeared on CNN to discuss a Bloomberg report on this fact and other researchers have been discussing the matter for some time. Since then, things have only gotten worse.
42% of the men raised in the bottom 20% income remained there as adults, which matches poorly against Britain (30%) and Denmark (25%). 8% of the men in the bottom 20% were able to reach the top 20% while this rate was 12% in Britain and 14% in Denmark. 65% of those born in the bottom 20% stay within the bottom two-fifths. Of those born in the bottom 10%, 22% remain there. In Canada, the number is 16%.
The news is, as always, better at the top: about 62% of those raised in the top 20% remain in the top two-fifths. For those in the top 10%, 26% of American men born there stay there. Canada fares worse here: only 18% of Canadian men born into the top 10% remain there.
This mobility from income class to income class is relative mobility. It is relative in that the movement is defined relative to the person’s class of origin. So, for example, someone born in the bottom 10% who moves on up to the top 10% would be upward relative mobility.
Another type of mobility is absolute mobility. This measure involves a comparison of incomes rather than economic class. Looked at in terms of absolute mobility Americans seem to be doing well: back in 2012 81% of Americans had a higher income than their parents because the United States was richer in 2012 than it was earlier. This is, of course, changing and we are seeing the youth on track to make less than their parents. No conversation about economics in the United States would be complete without mentioning the middle class, which is said to be vanishing.
As far as why the United States has limited mobility (especially upwards), this is a matter of dispute tainted with competing political ideologies.
Years ago, Rick Santorum claimed that the poor in the United States are more likely to be raised by single mothers relative to other countries. This is taken by some to be a factor in the lower mobility and as something to be utilized as a premise in arguing in favor of the traditional family.
Another factor is that the United States leads the world in the percentage of its citizens who are in prison. Being imprisoned is a major economic impediment that impacts the rest of the person’s life. As such, the high incarceration rates reduce economic mobility by trapping people in poverty. This seems intentional, so is a feature of America rather than a bug.
A third factor is the great economic inequality in the United States such that the distance between economic classes is large. To use an analogy, the lowest economic class starts out at the base of Mt. Everest while the top class begins at the summit. Working up from the bottom or even in the middle requires a significant change in income and wealth.
A fourth factor is that the economic playing field is obviously not level. Some people have great advantages (such as starting wealth, family connections, political influence, and race). To use a sports analogy, moving up is like running a marathon in which some people start at various miles along the course, with the poorest starting at the very beginning and the rich starting miles closer to the end. Catching up to folks who have such a huge lead might not be impossible, but would at best be very difficult.
One advantages people have is education, which is one of the many reasons the Republican party has been focused on this area. While people in the lower classes can attend college, this is more difficult in terms of paying, being prepared (wealthy areas tend to have the best K-12 schools while poor areas have the worst), and having the connections needed to get into the better schools. The trend is to cut public education spending that benefits the lower classes which hurts poorer families more than wealthy families and this will lower mobility.
A fifth and controversial factor is unionization. While the fantasy narrative of the right is that unions are job killers and economy destroyers, lower rates of unionization lead to lower wages and reduced benefits, thus reducing the ability of workers to work their way up. Interestingly, the lowering of wages is sometimes seen as a good thing since it increases profits and it is claimed that this leads to more jobs. However, some see the creation of more lower paying jobs ass less than ideal.
A sixth factor and one that might seem odd is the obesity epidemic in the United States. While the exact impact of modern obesity will not be known for some time, it is known that being obese increases health care costs and generally has a negative impact on success. Some of this impact is due to the health impact of obesity that can cause a person to miss work and be less productive. Weirdly enough, the United States might be less mobile because of obesity.
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