Rep. Paul Ryan’s Heritage Foundation
speech on Wednesday criticizing President Obama for “divisive
rhetoric” has sparked a web war over whether America has high
income mobility — Ryan suggested that it does, prompting vitriolic
pushback from a number of liberal commentators who argue that
income mobility in the U.S. is less than in other developed
nations.
The back-and-forth over income mobility has been disappointing,
because neither side, left or right, has defined either their terms
or their purposes. As far as I’m concerned, the relevant question
is whether poor people are able to make their way up the income
ladder with ease in the U.S. I’m not at odds with anyone, including
liberals, when I say that making it easier to go from poor to rich
in America is a goal.
Now, progressives are right to state, as
Brian Beutler did in initially contradicting Ryan, that there
is a metric of relative income mobility by which America fares
worse than a number of European countries. But it’s important to
distinguish this statistic from measurements of absolute
mobility — the frequency with which people move from lower- to
higher-income brackets, or whether kids do better economically than
their parents. This is different from relative mobility, which
measures the likelihood that kids will end up near the same income
percentile as their parents. To make a long story short, the U.S.
has low relative mobility, but, as Rep. Ryan implied, high
absolute income mobility.
While that would seem to be a contradiction, it’s not. And the
reason is that the U.S. constantly adds immigrants at the bottom of
the distribution.
Before going any further, ask yourself this question: would you
rather start out poor in the U.S., or anywhere else in the world,
including one of the large European social democracies?
Rep. Ryan would choose the U.S., and I would too.
Perhaps Beutler et al. would choose otherwise, but it’s worth
noting that millions of immigrants from all over the world, not
just Mexico, have, in fact, chosen the U.S. Of course, there are a
million other considerations of history, immigration laws,
de-colonialization, etc., to take in account. But the fact that so
many Koreans, Guatemalans, Vietnamese, and Lebanese, to name a few
other than our neighboring Mexicans at random, migrate to America
suggests, at the very least, that the U.S does not have a totally
inescapable caste system.
For
an article on income mobility last year, I interviewed Dr.
Nathan Grawe, a professor of economics at Carleton College and the
author of
one of the reports published by the Economic Mobility Project,
the source cited by Beutler in his criticism of Ryan. Grawe
explained that immigration explains how absolute income mobility
can be fine even in the face of bad news about prospects for people
born into a particular class:
How can this generation earn less than their parents’ generation
and yet kids consistently out earn their parents? The answer
is interesting and illuminating: immigration…. Because new
immigrants earn less (on average) than others, their inclusion
makes it look like things are heading toward less opportunity when
in reality nearly all kids from lower-income families (and 2/3s of
all kids) are doing better than their parents.
This is really important news. It helps us to reconcile many
Americans’ sense that their families have made progress…with the
average earnings data we hear every year.
Grawe also noted that “this is a uniquely North American
reality.” While some European countries also have high rates of
immigration, the U.S. have a disproportionate amount of immigrants
from developing, and poor countries. Around half, or
fewer than half, of migrants to countries like Norway, Sweden, and
France, come from other European or North American countries. A
much higher percentage — closer to 80 — of U.S. and Canadian
immigrants come from poorer countries.
So while the U.S. may not look as good as some European
countries by some relative income mobility statistics, Ryan is not
wrong to portray the U.S. as a country of opportunity in which it’s
relatively easy to move up in economic status.
In my estimation, it’s less important to ask whether people
shift around class levels frequently, with some rising and others
falling, than it is to ask whether it’s easy to move from
poor to rich. By this standard, Ryan is right that America is an
upwardly mobile society.
