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Feature
Legacy Nation
The issue of our time is not income inequality but income mobility, of which there is in the U.S. less and less. Are conservatives paying attention?
American Exceptionalism has taken a few hits of late, with the country lagging in important measures of performance. We used to think America was the freest country in the world, but now the Heritage Foundation begs to disagree. It ranks America in tenth place, as “mostly free,” behind a group of “free nations.” We used to think that this was a country of small government, but that was before Obama. And we used to think that, more than any other country, this is a place where people can get ahead no matter where they come from. However, the Pew Economic Mobility Project 2011 tells us that that’s not true either.
Income Inequality and Income Mobility
The Pew study was produced by the Pew Charitable Trusts. While one wouldn’t describe them as a conservative foundation, they’ve co-partnered with our friends from the Heritage Foundation and the American Enterprise Institute on their mobility project. The table at right, from their study, measures income mobility, and reports that the U.S. is one of the least mobile societies in the first world. The study measures “intergenerational elasticity,” defined as the relationship between a child’s and his parent’s rank on the income ladder. An elasticity of 0 denotes a highly mobile society, with no relationship between the income levels of parent and child. An elasticity of 1 describes a society with no mobility between the two generations.
| Comparable Estimates of the Intergenerational | |
|---|---|
| Elasticity of Earnings between Fathers and Sons | |
| Country | Elasticity |
| U.K. | 0.5 |
| Italy | 0.48 |
| U.S. | 0.47 |
| France | 0.41 |
| Spain | 0.4 |
| Germany | 0.32 |
| Sweden | 0.27 |
| Australia | 0.26 |
| Canada | 0.19 |
| Finland | 0.18 |
| Norway | 0.17 |
| Denmark | 0.15 |
| [Source] | |
The study finds that, of the countries sampled, income mobility is greatest in the Nordic countries and least in the U.K., where half the earnings advantage is passed on by parents to their children. That’s not surprising, as we’re apt to regard Britain as a class-ridden society. The surprise is that we seem almost as immobile a society as they are. If so, this would strike at the heart of this country’s self-image, as expressed in the idea of American Exceptionalism.
Nothing is more central to the idea of America than the belief that anyone can move up the ranks with the proper amount of industry and discipline. What we don’t want are permanent classes of peasants and aristocrats. That’s our idea of what Europe is or was, and we’ve always seen the U.S. to be different from that. We see America, not Denmark, as the land of opportunity. If it turns out that we are more class-ridden than the Europeans, then a core understanding of what American Exceptionalism means will have been lost.
Income mobility can be expected to become a major issue in the coming decades. Progressives have already picked up on the problem, in their campaign to reshape our economy. This was the message behind the President’s Osawatomie speech last December. Here’s what he said:
We tell people—we tell our kids—that in this country, even if you’re born with nothing, work hard and you can get into the middle class. We tell them that your children will have a chance to do even better than you do. That’s why immigrants from around the world historically have flocked to our shores.
And yet, 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%.
The President repeated the same idea in his January State of the Union speech. In both cases, conservatives have wrongly taken the message to be about income inequality. That’s in there, but the deeper message was about income mobility.
For decades progressives have complained about income inequality, about differences in wealth and earnings in the U.S. That’s what the Occupy Wall Street folks mean when they talk about the 1 percent and the 99 percent. For the most part, however, those complaints have fallen on deaf ears. Income inequality doesn’t bother most Americans, so long as there is income mobility. We aren’t bothered by the fact that other people are richer than we are, provided that our children have an equal shot at the brass ring. We’ve always believed that this was true of America, more than most countries, and that is why, according to Seymour Martin Lipset, “it didn’t happen here” and socialism never took hold. Take mobility away and income inequality presents progressives with transformational opportunities. That’s the story of Venezuela.
The absence of income mobility might also weaken the sense one has of belonging to a single American nation. With separate classes of citizens, one loses the sense of a united country with commonly shared expectations in life. In the past Americans have been quick to volunteer their services in times of peace and enlist in times of war, and I suspect that one reason is the belief that we all have an equal chance at life, that this is a country of income mobility. Otherwise we’re left with the two nations of Sybil, Disraeli’s England of 1845, and that’s a possibility which should concern people, particularly conservatives, who think American nationalism valuable. At present, the left is claiming the income mobility issue. Concede that to them, and say goodbye to a good many Tea Party supporters.
Natural Aristocracies
If income mobility is desirable, just what is the best mobility ratio, on the Pew scale? Did Denmark get it right, with its figure of 15 percent? Or would a score of 0, denoting perfect mobility, be better still? Just what kind of mobility to expect was a subject that greatly interested the Founders. They were self-consciously creating a new nation, and with it a new society, and what they wanted was something different from what they saw as an aristocratic England.
There had been sharp social distinctions in the Ancien Régime of colonial America, and the Founders worried that these might persist. They knew nothing of statistics but nevertheless understood the idea of reversion to the mean, the tendency of exceptional parents to beget ordinary children, and as they opposed aristocracies took comfort in this. In a letter to John Adams, Jefferson described this process as the “natural degeneration” of mankind. The Chinese expressed the same idea with the saying “shirtsleeves to shirtsleeves in three generations.” Our modern version features a entrepreneurial grandfather with dirt under his fingernails, a father with a Harvard MBA, and a son on Ritalin.
About the Author
F.H. Buckley is Foundation Professor at the George Mason University School of Law.
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Ryan| 3.27.12 @ 9:47AM
I'd also add a few things, and probably add some elaboration.
Income mobility is also undermined by welfare - both personal and corporate. In a sense, both people and companies need to be made "desperate" so that they will get imaginative and get to work providing for themselves and their families.
That's why corporate welfare (in the form of targeted tax favors and loopholes) and personal welfare (AFDC and other general forms of welfare) prohibit human productivity.
We need an environment in the US where small businesses can thrive on startup. If we want all these people to go back to work, they need to also have the opportunity to work for themselves and truly advance.
skip| 3.27.12 @ 2:17PM
Once again you are consistently rock solid. Your contributions to the discourse on various issues have not been lost on me. Kudos.
'The Ten Cannots'
William Boetcker ( 1873 - 1962 )
You cannot bring about prosperity by discouraging thrift
You cannot strengthen the weak by weakening the strong
You cannot help the poor man by destroying the rich
You cannot further the brotherhood of man by inciting class hatred
You cannot build character and courage by taking away man's initiative and independence
You cannot help small men by tearing down big men
You cannot lift the wage earner by pulling down the wage payer
You cannot keep out of trouble by spending more than your income
You cannot establish security on borrowed money
You cannot help men permanently by doing for them what they will not do for themselves
Indiana Alex| 3.27.12 @ 10:11AM
"Individualizing" social security would be the single most impactful policy to eliminate generational poverty, and stagnatin in the working class.
Today the working class mostly work very hard their entire lives, some in more than one job, yet most die penniless. Accumulating assets from this lifetime of work, that could be passed down generationally opens up the door to the middle class and beyond.
Of course liberals prefer an empty promise from the government that some amount of check may be sent monthly that can be taken away at the whim of congress. They look at themselves and figure that people aren't smart enough to manage their own assets.
Of course the true objection from big government types in both parties is the loss of power to buy votes inherent in the collectivist system.
And the rich stay rich, and the poor stay poor.
DTOM| 3.27.12 @ 10:27AM
F.H.
How can you measure "inter-generational income elasticity" when over half the live births in this country have no father of record?
Your sample is largely restricted to two parent families which are well documented to be positively correlated with income. Thus your measurement understates economic mobility in the US.
Sort of like when pollsters' results were unknowingly biased by the fact that not everybody had a telephone.
Don't Tread On Me...
Hoads| 3.27.12 @ 10:42AM
While Mr. Buckley dismisses the impact of our evolution from an industrial economy to an information society, one cannot dismiss the impact of our American economic evolution from production to consumption. The rise of a global economy has resulted in the export of a significant amount of our manufacturing base even as our manufacturing productive capacity has increased secondary to technological advancement.
The availability of cheap labor in a global economy has markedly decreased the price of consumer goods overall for everyone such that, those at the lower economic scale can now afford all the conveniences of modern life as compared to previous generations. The old Maslow Heirarchy of Needs comes to mind- the ability to acquire basic human needs of food, shelter, clothing, air, sleep frees the individual to pursue the more intangibles of life such as safety, security, happiness, creativity, etc. The same goods and services are available for all income scales with variances in price and quality. Vera Wang has a line of clothing at Walmart. One can buy a steak dinner at Golden Corral or Morton's. Consumer satisfaction is achieved on both ends of the scale as is measures of happiness and well- being.
It doesn't require a top down analysis and wringing of hands in recognizing that drive and ambition are generally positively correlated with the degree of hunger/inferiority. Perhaps Americans are so consumed with our cheap goods and the never ending array of entertainment that we've become fat and satiated at the expense of drive and ambition.
Perhaps we are the victims of our own "success" when we perceive our ability to consume the toys of life as the measure of our success and happiness. The real problem then is our moral degradation- we're losing the character traits that fuel the rise up the income ladder.
Petronius| 3.27.12 @ 11:21AM
Oh, So right about those "progressive aristocrats". They are motivated as the moneyed industrialists of old who's primary mission was keeping "the other kind" out of their sphere of privilege. The fact is that the old Ivy League blue bloods and the hard core liberals are of the same type. They believe in upward mobility for those of like mind and downward for all of us who are not but demand the Right to live by and for ourselves without hindrance from Them. Political PC not withstanding, their social control is absolute. The paid protesters assaulting Conservatives doing their bidding don't care a wit that their rice bowl comes from the heads of foundations living like royalty so long as they can paralyze any business that does not function as a support group for losers. And they love the N.Y. Times telling the struggling middle class wannabes to give up and accept their preordained place on the liberal plantation. The message hasn't changed. The animus of our oppressors has.
Still at the bottom of it all is that sand box mentality the "little guy" takes as gospel who's knowledge of economics is summed up in the three words, "have, get, and benefit". His chain is easily pulled by liberal plutocrats as he goes his destructive way knowing that they will attack the middle class trying to accumulate wealth, but not Them! They are secure in the knowledge that when the windows of Their banks get smashed, Their insurance companies cover the losses and the middle class they all despise gets the bill. Don't you just love it when a plan comes together? All this proves is that the tactics of social coercion have shifted from the market dominance exercised by Rockefeller and Carnegie to the cultural warfare waged by the nouveau riche deploying miscreant adherents of Rousseau wearing the cockade who would rather ruin the lives of their betters than improve their own. And it's not really about money. It's about displacing God and deifying themselves. I fear what will happen to the children and grand children of my friends. We cannot defeat liberalism politically.
PCC| 3.27.12 @ 12:33PM
An excellent article, cogently presented.
Mike 3/505| 3.27.12 @ 1:45PM
Petronius,
Please, Please...Paragraphs! You write some good stuff...but my old eyes have a hard time reading it.
Regards,
Mike
Petronius| 3.27.12 @ 3:53PM
Mike
Beg your pardon for being so verbose. I should have stated plainly and forcefully that the ruling class utilizes government, academia, and cultural institutions to prohibit any commerce they cannot overtly control. Ergo, upward mobility for the white middle class is now defunct.
cicero| 3.27.12 @ 3:46PM
Petronius et al, Well said. The thing that amazes me is that these guys think that they are living in the real world. The WSJ has been reporting all month about the haircut the CEO's have been taking, because they finally admitted that they have been running their publicly traded companies into the ground. Instead of $20 million, they will only be getting $12 million in their pay envelopes. Poor babies! Then there is the inverstment banker who is going to jail for the next 11 years because, although he has made tens of millions of dollars in the past few years, he tried to game the system to make a few more million. In the meanwhile, the middle class makes their $50 thousand a year, raises their kids, goes on a vacation to the beach every so ofter, and brings in the next generation. And they achieve the really heavy lifting with a sense of humor, and fatalism. This they achieve even though the beaurocracy conspires against them on a continuing basis.
The fact that the income plateaus have been static at the top and the bottom is not very relevant. Those who make the millions and billions will die, as everyone does, and their heirs will dissipate the wealth, as they always do. Those at the bottom will remain there until there is a societal change that stops institutionalizing poverty. The upward and downward movements in income distribution will continue within the confines of the great American middle class. Those making between $45,000 and $250,000 will vary within those parameters, and life will go on until the Left, if allowed to, kills our capitalistic economy.
Petronius| 3.27.12 @ 3:59PM
There's an old fashioned App for this: Black markets.
JP| 3.27.12 @ 3:58PM
The "mobility" problem in this nation has nothing to do with education, money, government programs, or class. It is ultimately a moral issue, and morality isn't something that can be subsidized.
Teflon93| 3.27.12 @ 5:48PM
The author seems unaware that one way to achieve "income mobility" is to confiscate the income earned by one unfavored group of people and give it to a favored group of people.
This is why socialist countries in the table have greater "income mobility". It is because the term is synonymous with corruption and tyranny.
Bob K.| 3.27.12 @ 8:14PM
Well this is news to me!
I thought that our long time government policy of Affirmative Action for everybody but white males would finally even things out!
Apparently it hasn't.
Are you now having trouble finding enough males of the right color for you in the Country Clubs, Universities and Board Rooms of America, Mr. Buckley?
POST American| 3.27.12 @ 11:13PM
---------------------FINAL WORD---------------------------
--NONE of the above!
The issue ---IS---NOT the actuarial breakdowns
from the capstone 'authorized' press.
The issue ---IS---- the destruction of liberties
---endless interference ----criminal tax schemes
---nearly a century of ILLEGAL, seditious
machinations from the ultra rich, TAX FREE
'chair--'IT'--Abel' foundnations and the 'FED'.
In this, the 11th hour of the CFR-RED China
handover, sellout, takedown, TREASON and
FINAL EUGENICS OP -----we can't afford
to mince words.
-----------------HUAC/ Nuremberg 2012--------------
John Kettlewell| 3.28.12 @ 5:09AM
Flawed study is...flawed. Always amusing to see attempts at quantifying life. We have a population equal to al other listed nations. We attempt to not have socialism, well we used to. I see no mention of minimum wage or any mention of inflation (including debasement and cost associated). Decrease in manufacturing? Mass litigation? How about actual ownership of property? Lifespan increases?
You can't possibly list all variables and accurately compare them between different societies. I feel like I just took an anthropology course...and it was just as useless as a real one (or sociology, etc.). You speak of university level education but not of the uselessness of courses, degrees, and abundance.
You can't measure happiness, and that is our pursuit.
aware| 3.28.12 @ 7:43AM
You completely miss the real cause of economic, cultural, and societal breakdown, the State.
Society has always had remedies to the problems we face but is now prevented from applying them by the State. When the State replaces fathers with handouts it is an act of war on society.
A host of aberrant behaviors is not only forced upon us by the State, it is subsidized. No society that gives equal footing to deviancy, whether homosexuality, bastard children, handouts for non-productivity, and worst of all prohibiting stigmatizing those engaged in such, can survive.
This article only points out one more symptom of the poison forced on us by the State. Until "conservatives" understand the true pathology of the State, which is force, they will continue to believe that changing the faces will change the pathology. Force is violence, which the State seeks a monopoly on, and violence is not building, it is destruction. Society is being suffocated by the State.
Even to call the State "government" is to soften the reality. It makes you think somehow you have a role in this destruction when the truth is you have little or no power over it. In fact, you are a victim.
The State can never be the instrument of bringing a "good" society into being. As Nock said, it is a harrow that you are to believe can be used to plow. But no matter how much you try, no matter who you have driving it, and no matter what "new" theories invented to support it, it will never make a furrow to plant a crop.
What's more, the State is totally resistant to any and all attempts to "reform" or "rehabilitate" like any career criminal. The founders innately understood this and created a prison for it. They wasted no time on "reforming" and instead severely restricted it with the shackles of the constitution.
Now we are faced with the hard reality that it will never go back to those shackles, and worse, will continue driving down the path of self destruction. It is a well traveled path and always ends at the same destination.
POST American| 4.1.12 @ 12:53AM
---------------------TRUTH OPENED-------------------
"--And in the 1920s, the foundations et al
were paying off ministers across America
to preach that 'Jesus was FOR EUGENICS."
-Endgame
(docoumentary)
10 MILLION views online
Unaccountable, inter-generational, psychopathic,
INTER-national USURY ----is-----EUGENICS.
EUGENICS -------IS------actuarial psychopathy
turned on the human soul and substance.
----------------HUAC/ Nuremberg 2012---------------
CASE OPENED