Straight Talk on Economic Mobility

Americans may be skeptical of some large welfare state programs, but a widely shared conviction is that children that are born to poor parents should have the chance to move upward. That’s why it was good to hear President Obama finally talking passionately about economic mobility in his Tuesday speech on income inequality in Osawatomie, Kansas:

“Over the last few decades, the rungs on the ladder of opportunity have grown farther and farther apart, and the middle class has shrunk. You know, a few years after World War II, a child who was born into poverty had a slightly better than 50-50 chance of becoming middle class as an adult. By 1980, that chance had fallen to around 40%. And if the trend of rising inequality over the last few decades continues, it’s estimated that a child born today will only have a one-in-three chance of making it to the middle class – 33%.”

In trying to hunt down the source for the President’s statement, I stumbled upon a treasure trove of charts and graphs on economic mobility from Pew. (By the way, I still couldn’t find the exact reference, so if you know it, please send it along). Here are some of the charts that I found most striking.

Americans believe they can achieve the American dream through hard work, but also see an expanded role for government

Pew conducted in-depth public opinion polls on economic mobility in 2009 and 2011 (the full report is here). In 2009, 46% of respondents said that they believed that their children will have a harder time moving up the income ladder than they did, but this increased to 59% in 2011.

Still, more than 2/3 of Americans believe that they are in control of their economic situation and the same proportion say they have achieved or will achieve the American Dream.

Finally, respondents were asked a set of questions about what they would like to see the government doing to promote mobility. (Note: none of the questions asked at what cost it would be worth addressing these problems, which tends to erode support). In the poll, 83 percent want the government to either provide opportunities for the poor and middle class to improve their economic situations, prevent them from falling behind or both.

Intergenerational mobility is substantially lower in the U.S. than in Canada and other rich countries

The figure below (from this report) displays the intergenerational elasticity of father and son’s earnings in 12 of the richest countries. At the top of the pack are the UK, Italy, and the U.S., and the lowest elasticities are in Denmark, Norway, Finland, and Canada.

Digging deeper into the data, the authors found that 26 percent of American sons with fathers in the top decile remained in the top decile compared to 18 percent in Canada. They also found that 22 percent of American sons in the bottom decile remained in the bottom decline compared to 16 percent in Canada.

Despite these disparities in mobility, Canadian and American respondents are largely similar in their views of what factors determine mobility over the lifecourse (hard work tops the list, followed by ambition, health, and education).

Many people in the middle class experience downward mobility

In a September 2011 report, Greg Acs looks at the risk of the falling out of the middle class (defined as children raised between the 30th and 70th percentile). He finds that a third of such individuals will fall out of the middle class by adulthood.

The figure below illustrates some of the specific risk factors for downward mobility:

Specific risk factors include divorce (especially for women), lower education, and use of drugs.

Final Thoughts

I think we need to pivot away from our currently narrow (but important) conversation on the disparity between the 1 and 99% to address the predictors of success for low and middle income Americans. Talking about mobility is the right way to enter the conversation, although it is important to frame the discussion as a matter of providing a fair starting place: hard work matters, but it can only matter when people have the right tools to be successful, escape poverty, and improve their standard of living.

About Brendan Saloner

I am a postdoctoral fellow at the University of Pennsylvania in the Robert Wood Johnson Health and Society Scholars Program. I completed a PhD in health policy at Harvard in 2012. My current research focuses on children's health, public programs, racial/ethnic disparities, and mental health. I am also interested in justice and health care.
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