The Spectacle Blog

Income Mobility Discussion Incomplete without Immigration

By on 10.28.11 | 4:53PM

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.

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