America’s Poor and the Myth of Mobility
by Jacob Hacker
The Conversation
March 21st, 2006
David Schmidtz’s generous response to my initial posting both pained and pleased me. It pained me because Schmidtz misunderstood my opening complaint about the abstraction of his essay (which he is fair to point out is not only below the norm for academia, but also below the level of some of my own writings). My point in trying to bring the conversation “down to earth” was not to criticize abstraction as such. And it certainly was not to question Schmidtz’s own sympathy for—much less his personal experience of—the plight of economic hardship. It was, rather, to encourage Schmidtz to deliver on his essay’s promise to interrogate the concrete reasons why we should or should not be concerned about inequality.
Which brings me to my reason for pleasure. Schmidtz, in his response, says immediately that he believes that the translation of economic might into political power is a serious concern, and one that he, like me, believes should be addressed. He admits he doesn’t “know how to get from there to here,” and I appreciate his humility on this score. (I’m happy to explore some possible roadmaps in future posts.) But I think it is worth underscoring both our agreement on this point and its substantial implications, at least as I see them.
Perhaps the most important implication is that efforts to reduce inequality can be justified not just on egalitarian grounds, but also on democratic grounds. Indeed, as the American Political Science Association’s Task Force on Inequality and American Democracy reported, some of the most vibrant examples of 20th-century American public policy—the GI Bill, support for collective bargaining between management and unions, Social Security—were successful not just in reducing economic inequality, but also in empowering citizens. By providing Americans across the income spectrum with resources, skills, and motives for democratic citizenship, each of these policies substantially evened out disparities of participation and influence in American politics, helping to reinforce the broad-based character of post-WWII prosperity.
Near the end of his generous response, Schmidtz switches into rebuttal mode, and so I will switch, too. He argues that we should be heartened that social mobility has not declined dramatically even as inequality has increased, because the gap between the rungs on the economic ladder are now farther apart than in the past. My point, however, was that rising inequality is more tolerable if people feel they have a good chance of moving up the ladder. And it strikes me as cold comfort to be told that, while the chance of moving up the ladder has not increased—and perhaps declined, according to a number of studies—this is because the folks higher up the ladder are moving farther and farther away from you.
In any case, the cross-national statistics on upward mobility do not show us in the “middle of the road,” as Schmidtz writes (admittedly in response to my vague statement that U.S. levels of mobility are “unexceptional”). They show us at or near the bottom of the pack for rich democracies—with, for example, the correlation between the incomes of fathers and sons higher in the United States than in Germany, Sweden, Finland or Canada. Alan Kreuger of Princeton sums up these studies thus: “The data challenge the notion that the United States is an exceptionally mobile society. If the United States stands out in comparison with other countries, it is in having a more static distribution of income across generations with fewer opportunities for advancement.”
As for the position of those at the bottom, I agree that it is better that their incomes have grown slightly over the past generation than if they’d not. But, first, most of the growth at the bottom—and, indeed, in the middle—is due to the increasing work hours of families (mostly the increased hours of women). In fact, if there had not been such an increase, families at the bottom would have seen their incomes fall, and families in the middle would have seen their incomes rise by only about a third as much as they did. If the focus is on real hourly wages as reported to the Census Bureau, rather than family incomes, there has been an absolute decline since the early 1970s—not just at the bottom but also in the middle.
Second, lest there be any doubt, lower-income Americans are quite poor. Our economy has more than doubled in size in the last 25 years, and median incomes in the United States are higher than in other advanced industrial democracies. But, according to the extensive research of Lee Rainwater and Timothy Smeeding (Poor Kids in a Rich Country, 2003), poor children in the United States are poorer than in every rich western nation but the United Kingdom, Spain, and Italy. In Switzerland, a child at the 20th income percentile has 70 percent higher real income than an American kid in the same relative position; in Norway, almost 60 percent; in Canada, France, and Belgium, more than 25 percent—despite America’s substantially greater per capita income. As the two authors put it, “A comforting belief in the United States is that while we may have more inequality than European countries, decades of economic growth have lifted even the worst-off Americans to a higher standard of living than the marginal economic classes of Europe. Rather surprisingly, this turns out not to be the case.”
I do not want to end in rebuttal mode, and so let me close with a question that I invite Schmidtz to address or ignore as he choose:
Do you believe (a) that economic inequality in the United States is not a cause for concern (either in itself, or because of what it indicates about opportunity or political equality or something else) or (b) that it is a cause for concern but it cannot be addressed without violating other important values that you hold dear? I take Tom Palmer’s response to be mostly about (b)—whatever we think of inequality, we have no legitimate rationale for responding to it through democratic politics, because any governmentally enforced response violates people’s rights. But I read you, unlike many libertarians, as focusing mostly on (a)—that inequality shouldn’t really concern us all that much. Am I right?
