Achieving the American dream gets tougher

Jason DeParle 

 

 

 

It is harder for a poor man in the U.S. to rise in economic standards than his peers in Canada and much of western Europe. 

Benjamin Franklin did it. Henry Ford did it. And U.S. 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 centre stage. 

The 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 Ryan (Republican-Wisconsin), 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 emphasised 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 U.S. poverty, which leaves poor children starting especially far behind. Another may be the unusually large premiums that U.S. 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 per cent of U.S. 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 per cent) and Britain (30 per cent) a country famous for its class constraints. 

Meanwhile, just eight per cent of U.S. men at the bottom rose to the top fifth. That compares with 12 per cent of the British and 14 per cent of the Danes. 

Staying on at the top 

Despite frequent references to the United States as a classless society, about 62 per cent 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 per cent born in the bottom fifth stay in the bottom two-fifths. 

By emphasising the influence of family background, the studies not only challenge U.S. 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 neighbour with significant ethnic diversity. Miles Corak, an economist at the University of Ottawa, found that just 16 per cent of Canadian men raised in the bottom tenth of incomes stayed there as adults, compared with 22 per cent of Americans. Similarly, 26 per cent of U.S. men raised at the top tenth stayed there, but just 18 per cent of Canadians. 

“Family background plays more of a role in the U.S. than in most comparable countries,” Mr. Corak said in an interview. 

Sceptics 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 per cent 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 a U.S. 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 a U.S. family would need an additional $93,000. 

Even by measures of relative mobility, Middle America remains fluid. About 36 per cent of Americans raised in the middle fifth move up as adults, while 23 per cent stay on the same rung and 41 per cent 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 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 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 U.S. 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 favours 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. 

— New York Times News Service