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Immobility Nation: The Fable of the 'Land of Opportunity'
For most people facing poverty today in the United States, the concept of America as the land of opportunity is just a fable.
America is becoming "a country where a shrinking number of people do really well, while a growing number of Americans barely get by," President Barack Obama declared during his State of the Union address.
The numbers back him up. Executive compensation and the poverty rate are both at or near all-time highs.
photo: AtleBrunvoll / Flickr
Surprisingly, it was Republican presidential candidate Rick Santorum who first made economic mobility an issue in the 2012 elections. Three months ago, he pointed out that children born to poor families rarely grow up to become rich, or even middle class.
"Believe it or not, studies have been done that show that in Western Europe, people at the lower parts of the income scale actually have a better mobility going up the ladder now than in America," he said during the October 19 Republican presidential debate in Las Vegas.
In early January, when The New York Times picked up on Santorum's comments and explored the fact that American incomes are increasingly immobile across generations, it made a big splash in the media. Now, Obama's aspiration to "restore an economy where everyone gets a fair shot" is going viral.
Santorum is right about mobility. Academic studies typically show that around 40-45 percent of income differences are transmitted from one U.S. generation to the next. This is about twice as high as the equivalent figures in Western Europe and Australia.
Unfortunately, American immobility is an even bigger problem than that.
In a highly technical report from the Federal Reserve Bank of Chicago, economist Bhashkar Mazumder shows that prior researchers have seriously underestimated the degree to which children inherit their parents' positions in society.
The new best estimate is that the intergenerational stickiness in income is around 60 percent. In other words, over half of a person's economic status in life is predetermined at birth.
Mazumder, the director of the Chicago Census Research Data Center, concludes that it would take an average of five generations for a family's offspring to rise from low income to middle income.
This doesn't mean that all of a poor family's descendants will be poor for six generations, but it does illustrate just how slowly family incomes change in America.
It wasn't always this way. Time was when opportunities for advancement in America were expanding, not contracting.
Another study from the Federal Reserve Bank of Chicago shows that intergenerational mobility increased continuously from 1940 to 1980. Only then did it start to fall.
By 2000 (the final year of the study covered), mobility in America was lower than where it had started in 1940.
Obama and Santorum are right to argue that the government has a responsibility to foster an economic environment that encourages intergenerational mobility. And the American people agree with them.
A 2011 poll from the Pew Charitable Trusts' Economic Mobility Project found that 83 percent of Americans "support a government role in promoting upward economic mobility."
The top three things Americans told Pew that the government should do? Provide all children with a quality education, promote job creation, and ensure equal opportunity — all of which Obama called for in his address.
In the end, the best way to promote upward mobility is to give people a helping hand. It's not enough to get government out of the way. Government can and should be part of the solution.
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35 Comments so far
Show AllActually the Pew Institute is vague with comments such as "promote job creation". What kind of job creation? More McJobs for every one? More minimum wage jobs to perpetuate poverty? At least begin with raising the minimum wage to $15 an hour, raise taxes on imports to promote domestic industries, tax corporations and the wealthy to the max and increase the civil service by three million. We shouldn't have to wait in line for four hours to get a driver's license or SSN and then hear that there are no jobs out there! Universal healthcare would probably boost employment more than any other public interest program with the added benefit of lowering bankruptcies, living longer and healthier and reducing national stress across the board.
Education is another way of bankrupting Americans rather than helping their upward mobility. With typical undergrads having a student debt of $100,000 when graduating, you almost guarantee that the student will die in debt. No tuition for post K-12 education would be a logical start along with more 'grants' rather than 'loans' for the poor.
Equal opportunity begins with full employment at decent wages. Instead of a War on Terrorism or Drugs, we need a War on Poverty. Also equal opportunity can't exist in a society in which corporate America can high jack both our government and our media. Public broadcasting (i.e. CBC in Canada) that doesn't depend on corporate sponsorship, new election finance laws and of course a repeal of Citizens United are the bare minimum for Americans in restoring democracy to our country.
Of course it is a long shot that any of this will happen as long as the public continues to support the two corporate parties. It's never easy seizing power from the 1% especially when so many can't see the trees through the forest.
This article implies that the 'mobility" issue was just uncovered by Santorum and Obama in recent months. Didn't anybody listen to the lyrics of John Lennon's WORKING CLASS HERO that debuted four decades ago?
Absolutely in agreement! As a progressive, I think it's sad to say that we have to turn back the clock, but when the clock has been running the way it has we do. We had a better country ... we need it back. Salvatore
"The top three things Americans told Pew that the government should do? Provide all children with a quality education, promote job creation, and ensure equal opportunity — all of which Obama called for in his address."
Not surprising that he called for them in his address since a poll outlined exactly what he should say. What would be surprising is if he ever delivered on what he called for. And experience has shown that the only thing he ever delivers on is his promises to Wall St.. Not surprising since his grandmother was a "bank officer" and he's now part of the 01%.
He's too busy building "street cred" for killing people and ensuring the bonuses for Wall St. and their cronies. He's not to be believed. This man is not another MLK, Reagan, Lincoln, or JFK. He's just a media invention used to promote Wall St. and the 01%.
The majority of US citizens are for single payer health care. Where was he on that?
On September 9, 2009 while promoting Obamacare, Obama told the world: " health care reform must preserve insurance industry profits"
Obama's 2012 SOTU speech unequivocally disparaged single-payer.
Need any more evidence of where Obama stands on single-payer ?
Just another lying piece of sh*t in the White House. But it's because Americans would rather have the beautiful lie, than the harsh reality, so I don't really blame Obama, but the American voters who keep thinking the lesser of two evils will somehow be good for them.
Again, absolutely agreed! If the President would even start to live up to his rhetoric we could have a much better country. Change -- that's what we need -- so let's have it. And let's start with "Medicare for All"! Salvatore
Actually I think Fiat jobs came out the best when Obama screwed over the auto industry. GM not so good.
Cute. :) But the fact is you CAN create jobs by fiat. The government should be hiring teachers' aids, nurses' aides, and social work assistants TODAY. Next year it can hire more teachers, nurses, and social workers. Millions of Americans need help, while millions of other Americans sit home and suffer the indignities of unemployment. The government CAN and SHOULD create jobs. Salvatore
"Citizens United" must be repealed!!!!!
But has anyone heard any politician whatsoever mention this need?????
I don't know if Santorum is a bit more honest than the usual politician or if he talks without too much thought. He gave us the famous "man on dog" quote and in Iowa he TWICE said social security needed to be cut immediately. Of course the SS comment is untrue and politically stupid, but seems to display honesty of opinion, I guess.
The GOP has no expectation that whatever clown gets the GOP nomination will beat Obama in November. The GOP knows their resources are better utilized taking control of the US Senate. Unseating an incumbant president is not worth the challenge, especially when that president is so eager to collborate under the guise of "bipartisanship"..
The GOP has proven that whatever extreme right wing idea they toss out today will become part of the Democrats' agenda within a year or two. Obama is already defunding Social Security, and is looking forward to gutting it and blaming the GOP during his second term.
"Obama is already defunding Social Security..." That is a lie. I've recently been dealing with a new republican neighbor who spouts right-wing lies. It's put a strain on our relationship. If we can not speak honestly about our positions, then we are way too much like the right-wing crazies.
"Obama is already defunding Social Security" is absolutely TRUE. This is where the payroll tax cut is coming from:
http://www.counterpunch.org/2011/09/09/about-that-payroll-tax-cut/
http://www.counterpunch.org/2011/07/26/obama-s-ambush-on-entitlements/
By LAW it is being funded by the general fund.
What are you talking about? You seem to have some need to protect Obama.
"Fact No. 1: Last year, for the first time in its 75-year history, Social Security took in less money than it paid out.
Fact No. 2: This year, the first of the baby boomers reached retirement age and began collecting Social Security benefits.
Fact No. 3: The payroll tax holiday that Congress approved a year ago reduced Social Security's revenues this year by $105 billion.
Obama showed no sign of being troubled by those facts when he popped into the White House briefing room earlier this week and called on Congress to extend the payroll tax cut for another year.
...
"Getting rid of the way we fund Social Security through the payroll tax is a dangerous idea," says Lamar Alexander, the Senate's No. 3 Republican. "Taking money from Social Security funding is a long-term raid on solvency of Social Security."
http://www.npr.org/2011/12/07/143241709/how-payroll-tax-cut-affects-social-securitys-future
Does one get brain damage when registering Democrat or does one get invited to join the party after brain damage? You're defending a guy who's been outflanked to the left by Lamar Alexander!
Babones sez: "Obama and Santorum are right to argue that the government has a responsibility to foster an economic environment that encourages intergenerational mobility."
***
They are NOT right to argue for this, when every action they have ever taken has been designed to produce just the opposite. Their "arguments" are just politics.
Obama's actions to date have facilitated the DOWNWARD mobility of tens of millions of Americans.
When Obama guts Social Security, Medicare and Medicaid during his second term you will see a huge escalation of downward mobility as fewer older workers retire, thereby increasing the unemployment rate for young Americans who are already experiencing the highest unemployment rate of any age group.
Unfortunately the mobility aids are not like crutches and walkers that someone decides to donate from their "disposable income" garnered from planned obsolescence. They entail liberating people from fractional reserve banking, and removing the illusion of the Bernaysian system of pathologically perpetually deferred promises, among other things.
The author didn't mention employment mobility that has impacted many homeowners who could get a job if they could sell their house and move to a new location if the US housing market wasn't in a downward spiral.
Millions of Americans who rent will not buy a house as long as they know that the illiquid housing market will tie them down and prevent them from relocating to a location offering viable employment opportunities.
They limit me to 800 words -- I'm doing my best! :) The government owns the mortgages on most of the houses in America. It can damn well do something about this. But the best thing the government could do is hire people, promoting wage growth so they could pay their mortgages in the first place. Salvatore
ya know its bad when:
"Dallas, TX - The slumping economy in the United States isn't just affecting Americans. According to recent reports, the decline in employment opportunities is driving many illegal Mexican immigrants back over the border.
Enrique Hubbard, the Mexican consul general in Dallas told Fox News that the rate of Mexicans returning to their home country is "almost 100 percent more this year than it was the previous two years.""
"According to the Center for Immigration Studies, there has been an 11 percent drop in illegal immigrant population in the U.S. since August of last year, and that 1.3 million illegal immigrants have returned to their home countries. According to the C.I.S. the population of legal immigrants is still growing.
Reportedly, the Mexican economy will likely be affected in a similar way that the American one has by the insurgence of so many workers needing jobs. It is expected that wages will be driven down and social services will be strained by the influx of people returning to Mexico."
http://banderasnews.com/0808/nw-returntomexico.htm
"Three cheers for Arizona!!! The shoe is on the other foot and the Mexicans from the State of Sonora, Mexico don't like it. Can you believe the nerve of these people? It's almost funny. The State of Sonora is angry at the influx of Mexicans into Mexico.
Nine state legislators from the Mexican State of Sonora traveled to Tucson to complain about Arizona's new employer crackdown on illegal’s from Mexico. It seems that many Mexican illegal’s are returning to their hometowns and the officials in the Sonora state government are ticked off. A delegation of nine state legislators from Sonora was in Tucson on Tuesday to state that Arizona's new Employer Sanctions Law will have a devastating effect on the Mexican state.
At a news conference, the legislators said that Sonora, – Arizona's southern neighbor, – made up of mostly small towns, – cannot handle the demand for housing, jobs and schools that it will face as Mexican workers return to their hometowns from the USA without jobs or money."
http://www.morningliberty.com/2010/05/19/illegal-immigration-sonora-authorities-angry-mexicans-are-going-back-to-mexico/
congratulations to the senate congress and whitehouse - after 40 years of your diligent efforts you have finally reduced amerika to a status of "less attractive" than mexico
the rockefellers would be proud - there'll probably be a little extra in the pay packet this month for all your efforts
well done!
So, upward mobility pretty much stopped in 1980? Probably really backed off starting in January 1981. That's when St. Ronald of Reagan opened fire on the middle class.
Reagan prevented the minimum wage from rising during his entire 8 years in office. So when the minimum wage became $3.35 an hour in 1981, it remained $3.35 an hour all the way until 1990 when it was raised all of 15 cents to $3.50. Of course prices had continued to rise all this time, making minimum wage effectively "cheaper" year after year. For those running the sort of business where wages were kept at the minimum wage level, this was a great deal. Labor costs stayed the same while you could price your products and services at "the going rate". Effectively during this time we had a "declining" minimum wage relative to purchasing power from 1981 to 1990. This is what Ronald Reagan did for us. Obviously he didn't care what happened to the low income people. Probably felt that since they likely all voted Democrat he didn't owe them anything anyway.... This in any case is the Republican viewpoint. Today of course the Republicans are working as hard as possible trying to make it more difficult to vote upon the idea if you can't win an election fairly, "stack the deck"!
Obama is just a waterboy for the rich. He has no intention of creating upward mobility. Absolutely everything he has done proves he cares nothing about the American People. Obama has and continue's to build a police state, and support perpetual war. That's it. Forget Washington, there is no hope there. Our only hope is to work collectively and cooperatively to build a better world from the ground up. Washington is a disease, not a cure. Corporations are a disease, not a cure. The cure lies in people cooperating to build a new society,. There is no other path. I will point blank state that if you participate in politics today your energy will be spent and you will end up where you started. On election day protest, don't vote. Fly your flags upside down and don't vote. If you vote your voting for corruption. Voting will not change things. You must build a new society to change things. If you can't perceive that after all this time and information, then there's no hope for a better life. Happy little Fascists is your future.
In addition to the police state in perpetual war, Obama is creating an extortion state where IRS agents force you to buy medical insurance (and soon, other defective products) from corporations.
Back in the 20th century they would have called that fascism.
Yah, what a crock.
Obviously lack of intergenerational mobility is genetic, like all other problems.
The simple solution is for Monsanto, or some other mega biocorp, to create a GMO to correct the fault. They can put into poor kids' Wheaties and all will be OK.
We won't see any changes unless Americans get tired of being lied to--lies like: 9/11 was carried out by a man in a cave; Al Qaeda is not a CIA-backed organization; Osama bin Laden did not die in 2001, but was killed in 2011; torture produces valuable evidence; drone attacks only kill bad-guys; when we do it, it isn't a war crime; wealthy people create jobs--the list goes on and on, yet every lie is firmly believed by most Americans. Until that changes, we will continue to be played like expendable pawns on a chess board.
Haratio Alger is dead even if Henry Wallace as vice president wanted to resusitate him. "Time is not on his side/No it isn't. . ." Special thanks to the Rolling Stones!
Capitalism, thy time is coming. "No compromise with Satan is possible" as Wallace correctly put it as vice president. "On the march!" You know it. Talking about "the people's revolution!"
The OECD (which is the group of 'most developed' countries) has been tracking social mobility for some time. These studies usually take a lot of time and funding and there aren't many of them - I'd been informally citing the same one for years until this came out:
http://www.tuac.org/en/public/e-docs/00/00/06/77/document_doc.phtml
I suspect that Santorum (or an aide - he seems a dim bulb, and I say this as a Pennsylvanian who's heard way too much of him) caught wind of an article about that particular study.
There was some small push on the far left to publicize the results of a similar OECD study that came out several years ago (I recall the number of countries being fairly small - maybe only 7? - and the US ranking dead last), but it was generally ignored. Anyone else recall that study?
I'm not sure which study you're talking about, but I can give you a citation list if you'd like to e-mail me. I'm always happy to hear from people, and I'm easy to look up. Just Google me. Thanks! Salvatore