How exactly does income inequality reduce social mobility? I understand it becomes harder to get into the next upper quintile of income distribution, but … I didn’t know that income was incremental. It’s a progressive thing. If you earn one dollar more you earn one dollar more - not that you earn one dollar more, but are still in the bottom 20th percentile. :dubious:
You are correct that some things are absolutes. For example, if you have under the buying power of around US $1.25 a day, life becomes inherently unsustainable. That is because things like staple foods, fossil fuels, cloth and other essentials are traded on a global commodity market and cost the same basically everywhere in the world. With less than $1.25 a day, a person is going to be barely able to sustain themselves on a daily basis, and it’s basically luck if they survive through the day. There isn’t enough to allow for long term improvements in life.
Likewise, I think it’s around US $4,000 (I may have that number wrong.) where life develops enough stability to potentially support democracies. Democracies can survive with less than that, but they tend not to. US $4,000 allows enough for basic education, some social mobility, a meaningful press and other things that help create free and growingly prosperous societies.
But other things are relative. For example, in rural Niger, the guy who graduated high school is going to be one of the most educated people around, and is going to have more social mobility. In the US, however, graduating high school is barely enough to work in unskilled labor. A bachelor’s (and, increasingly, advanced degrees) are becoming a pre-requisite for even basic social mobility. And, as these things become necessarily, their costs rise and they continue to be easier to obtain for those born into well off families than those born into poor families.
It’s the same with housing. $125,000 in Washington DC will barely buy you a one-bedroom condo in a dangerous, economically depressed neighborhood. That same $125,000 in Sacramento will buy you a reasonable ranch home in a normal suburb. Housing prices in a region become relative. And since housing determines a lot about the quality of school you attend, the safety of your daily life, the social networks you connect to and the economics around you, where you grow up becomes an important part of social mobility.
To expand on that, if you have one neighborhood where only the poor live, and one where only the rich live, you are likely to end up with a situation where the poor get poorer and the rich get richer. Why? Poor kids will only have access to poor role models in their daily life. When they get their first job, they’ll look to their poor relatives to help them know where to look, which will be organizations where workers are poor. If they start a business, their business will cater to poor customers. When they go to school, their schools will be full of poor kids and the social problems that are interconnected with poverty. The rich kid, however, spends all day with people who became rich. When they get their first job, they’ll hit up their rich relatives for an internship or an entry level job in an organization where people becomes rich. If they start a business, their clients will be rich. When they go to school, they’ll go to school with the advantages of higher parent involvement, more resources to address social issues, and richer social connections.
If you have a more mixed neighborhood, however, some of that effect is smoothed over. The poor have access to some rich role models, schools get some of the benefits of high-income students, and the poor get some chance to tap into the social and economic networks that make people rich. Likewise, the rich lose their stranglehold on things like education and high quality housing, and their kids start to sink or swim on their own merits.
Anyway, in the long run social mobility and quality of life is a complex mix of absolute income and access to things that perpetuate success (education, social capital, startup funds for businesses, preventative health care, etc.).
What about the role of ambition? Take the case of one of the poorest groups of immigrants to the USA-the Russian/Polish Jews. Starting in the 1870’s, these people left their homes because of poverty and persecution. They landed in an alien land, unable to speak the language…indeed, many were believed to be feeble minded. They took menial jobs-running chicken farms, sewing shirts, running junkyards. But in a few generations, their status rapidly changed-they made sure their kids got educated, and now most of them are in the upper classes. Social mobility is there-you have to work at it. Now we have all these efforts by the government to “equalize” things-yet we have more and more poverty-why? Why do some people stay mired in poverty, while others excel?
You know what’s the biggest killer to ambition?
Knowing that no matter what you do, you can’t get a foothold into a higher stratum.
Isn’t this why so many immigrants flock to the US? In their home countries, income inequality acts as a barrier to ambition, but the US carries the promise of being able to live out your dreams.
Not all of them were poor. Some of them were doing okay at home, and they came here and made okay “good” and “great”. Which meant that the poorer immigrants that came afterwards had a pre-existing network that helped them to establish themselves socially and economically. There have been no immigrants to arrive here who made it all by themselves. Settlement Houses are a testament to this.
I find it curious that you highlight this group and not say, black Americans. Black Americans are a great example of how a group can be harmed when there is limited mobility. Years after Emancipation, economic success of black Americans was restricted to a blessed few, with the majority mired in poverty. Once barriers began to lift in the mid-20th century, black Americans promptly began to fill the ranks of the middle class–which is where most of them reside today. Were black Americans suddenly hit with a pulse of ambition in the 1950s, or did their context change in such a way to make their ambition more lucrative?
Why is “equalize” such a bad word? Why is it so bad to believe that American citizens should be treated the same, regardless of where they are from, their racial backgrounds, and socioeconomic status?
Do you think maintaining social disparities promotes mobility?
The 1870s, of course, was a hell of a different time. The US was a rapidly developing country with lots of room for rapid expansion and huge untapped consumer markets, not the mature economy it is today. It’s not surprising that ambition gets people further in, say, China and Dubai than Spain and Greece.
Because not everyone is deserving of the same things. Sometimes life prohibits certain ambitions, but that doesn’t mean we should try to fix it. My best friend from childhood wanted to be a soldier like I was. He coundn’t, though, because of the cancer he had as a young boy. The Army wouldn’t take him.
Even though the cancer was a cruel twist of fate, and no one’s falut, should my friend get to claim that he’s a veteran? Should he be treated the same as one, regardless of his lack of service?
You ask that as if we get to control social disparities. ralph’s point was that we try and fail to equalize society.
Maybe we fail because we “try” the way a toddler tries to share a cookie?
It’s worth noting that “The four countries with the lowest “intergenerational income elasticity”, i.e. the highest social mobility, were Denmark, Norway, Finland, and Canada…”
Why is that worth noting?
No idea, I’m just glad Enter the Flagon clarified that low intergenerational elasticity = high social mobility. Because to me it sounded like it would be the opposite.
Because Americans always go on about how America is the land of opportunity where it’s easier than anywhere else to get rich, and how the Evil Social Programs of nations like Canada inevitably lead to nationwide poverty and socioeconomic stagnation. When the evidence is that it’s the opposite. America is not the Land of Opportunity, it’s the Land of No Opportunities, where you are more likely to stagnate in whatever class you are born into than in any of those Evil Socialist nations.
Think of intergenerational earnings elasticity as measuring the correlation between your income and the income of your children. So in a country with a high intergenerational earnings elasticity, if your income is low then your children will also likely have low income. With a low intergenerational earnings elasticity then your children’s income will be less dependant on your income (you could be poor, but your children could have a decent shot at being rich).
You might expect that countries that put an emphasis on equal opportunity (through, e.g., access to schooling) would have a low intergenerational elasticity, and that’s what we find. What’s sad is that America has changed from a country where everyone (well, not really everyone) had a shot at success to one where the poor stay poor over multiple generations. People still think of America as the land of opportunity, but that’s becomming increasingly less true.
Some great responses in this thread, by the way.
Remember that social mobility is not just some namby-pamby social justice issue. Social mobility ensures that our citizens make reach their maximum potential, and that scarce resources (advanced education, startup funds, etc.) go to the people who can do the most good with them. Social mobility inhibits corruption, and encourages competition.
On the touchy-feely side, social mobility builds hope, and that prevents all kinds of social ills.
Imagine a school that does not want its students to feel bad about being cut so it chooses its basketball team by lottery. Everyone’s name goes into a hat and the first 12 pulled out are on the team.
Another school chooses its team by having tryouts and picking the best 12 players. Which team is more likely to have parents who are good at basketball? The second team. Does that mean that the first team is more like a meritocracy? Obviously not, height and body type are heritable and so tall athletic parents are more likely to have tall athletic children. Therefore in a meritocracy you would expect more members of the basketball team to have athletic parents.
Likewise you can not make any judgements about the amount of opportunity in American by looking at social mobility. Intelligence and some aspects of personality are heritable so since intelligent people make more money than unintelligent people we would expect a strong correlation between incomes in generations. America is also a much more diverse place than the Scandanavian countries and different cultures have different expectations and goals. A child who is raised to want to buy a big truck and go mudbugging every weekend is going to have a different level of income then one who spends his weekends studying for the SAT and practicing the cello. That does not mean that the opportunity does not exist for the mudbugger, merely that he may not be prepared to take advantage of that opportunity.
Also because of the diversity and prosperity of America there is alot of income inequality. Obviously most of that is on the high side.
Imagine a world where income is totally dependent on height. It would be much harder for the children of an average citizen to move into the top income bracket if you lived in a country where the average height was 6 feet and the standard deviation was six inches, than if you lived in a country where the average height was 5 feet and the standard deviation was three inches.
Thus an income distribution that is flatter is much harder to move around brackets. In Sweden the lowest decile of income makes about $10K a year and the 90th percentile makes about $38K a year. In the US the lowest decile makes about $7K per year and the 90th percentile makes about $55K per year. Thus the same increase in pay would jump the person in Sweden up alot more than the person in America.
Your stories do absolutely nothing to explain the decrease in social mobility over time in the US. Perhaps “intelligence and some aspects of personality” have become more heritable in the last 70 years? If not, everything you just said was meaningless.
Society has gotten more equal as women and minorities are participating in the economy so it is much more of a meritocracy than it used to be.
More women go to college now than in the past. College is a great spot to meet spouses. Also more women go into the workplace and meet spouses there. Therefore spouses are much more likely to marry someone of similar intelligence than they use to be.
Also technology allows businesses to scale like never before. This allows returns to be focused on fewer people creating income inequality. Facebook could be coded and produced by a handful of people and all of them became enourmously wealthy. Manufactured goods needed armies of factory workers, accountants, and middle managers. Thus succesfull companies create fewer people to split the proceeds. So an information economy will be more unequal than manufacturing economy.
Our country is also much richer, and I have already explained why rich countries have less social mobility.
Are you saying those things aren’t happening in other rich countries? Are people in Canada or Denmark not meeting their spouses in college? Are women in Finland not going to college? Is the US truly that special? Want to try again?
By the way, for your future benefit, you should be aware that the correlation is between low country income and low social mobility. Social mobility is, in almost all countries (UK and US being the big exceptions), something that is higher in rich democracies. The real correlation is between income equality and social mobility: cite.
Let me rephrase this as “richer countries on average have more social mobility,” so if you think that we have lower social mobility because our country is so rich, you’re wrong.
You may have linked to the wrong chart. All that shows is social mobility is inversely correlated with income inequality. That is what I have said all thread. It also shows that diverse countries such as the US, Switzerland, and Singapore have more income inequality than small homogenous countries such as Canada and the Nordic countries.
Lack of social mobility may be linked to lack of opportunity or it may be linked to meritocracy , no one has produced any evidence that there is less opportunity in american than there used to be or in other countries.
Canada is not homogenous. Canada is the complete opposite of homogenous, actually.