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Thursday, February 14, 2008

Upward Mobility The Great American Myth

I've often times felt like opportunity has become a myth in America. The concept of credit and how it functions seems to limit the possibilty of getting ahead. The way our taxes are exacted also seems to tax the poor disproportionally. Which limits the ability to accumulate any form of personal wealth. In my reading today I found a website with a study done in 2005 which shows this to be true. I've always told my kids do not expect life to be fair. Just one more example about the ever increasing myths about freedom in America.


For most of its history, especially from the mid-19th to early 20th centuries, the United States was exceptional in its occupational and physical mobility. America is known as the "land of opportunity" and in this sense, it prided and promoted itself on providing individuals with the opportunity to escape from the contexts of their class and family background. Examples of this social mobility include:

Occupational - children could easily choose careers which were not based upon their parents' choices.
Physical - that geographical location was not seen as static, and citizens often relocated freely over long distances without barrier.
Status - As in most countries, family standing and riches were often a means to remain in a higher social circle. America was notably unusual due to an accepted wisdom that anyone - from impoverished immigrants upwards - who worked hard, could aspire to similar standing, regardless of circumstances of birth. Birth circumstances were not taken as a social barrier to the upper echelons or to high political status in American culture. This stood in contrast to other countries where many higher offices were socially determined, and usually hard to enter without being born into the suitable social group.
However, regardless of the past, the United States no longer has exceptional social mobility. A 2005 study showed that children born into poverty in Europe and Canada were more likely to find prosperity than children born into poverty in the United States

From the wikipedia encylopedia

The Myth of Economic Inequality

The gap between the rich and the poor is growing in the United States
and has been for decades. The topic came to the forefront of the national
debate last year with the rise of Occupy Wall Street. However, a growing
 income gap may not be the problem that some make it out to be.
The evidence that growing inequality hurts the middle class and poor is
 weak, as Scott Winship, a fellow at Washington-based think tank the
 Brookings Institution, testified to the Senate Budget Committee today
 at a hearing about inequality and economic mobility. "There is very little
 evidence to suggest that the gains at the top have come at the expense of
other Americans," he said.
Without question, income inequality has grown substantially in the
 United States. According to an October report from the Congressional
 Budget Office, a nonpartisan agency that provides economic data to
 Congress, real income for the top 1 percent of the population grew by
 275 percent between 1979 and 2007. Meanwhile, household income
 for the middle 60 percent of the population grew by just under
 40 percent, and for the bottom 20 percent, it grew by just 18 percent.
 That's a wide disparity, but explosive income growth for the richest
Americans isn't necessarily detrimental to the poorest Americans.
As an example, Winship pointed to Mitt Romney, who made
 $22 million or so in 2010, and Mark Zuckerberg, who could
make $5 billion
 off of his stock options this year. "Should we be concerned about
 the poorer man?" asked Winship. In other words, extreme economic
 inequality isn't always problematic; it's simply a fact of life as some
 Americans get fantastically richer and skew the numbers even further.
This means that the income gap within the bottom 99 percent has grown
 much more slowly than that between the 99 percent and the top 1 percent.
This means that a tiny segment of the richest Americans has an
 increasingly large impact on measures of inequality, though the
 negative impact on other Americans may be minimal.
"How will the typical American end up better off if the Facebook IPO
 were to fall through so that Zuckerberg could not exercise his options?
" said Winship in his opening statement.
While the problems of inequality can be deceptive and
 perhaps overstated,
growing income disparities can point to larger economic problems.
 For example, the CBO has cited a lack of skilled labor as one contributing
 factor to inequality, as demand and pay grow for rare skilled workers.
 Better education, particularly in STEM fields, could mean a better
chance at a better life for many.
Likewise, while income gaps continue to grow, economic mobility--
the ability to move up (or down) the income ladder--is very limited.
Even while a vast majority of Americans are earning more than their
 parents did, many Americans find it difficult to move from their places 
on the economic ladder, says Erin Currier, project manager at Pew's
 Economic Mobility Project, which studies economic opportunity in
 the U.S. Many Americans, particularly the richest and poorest, tend
 to "stick" at their parents' places on the ladder: "65 percent of kids
 raised in the bottom 20 percent never make it to the middle class
 as adults," says Currier.
In part, this is again a question of education;
the cost of higher education
 has increased faster than median family income in recent decades.
 Post secondary education, says Currier, quadruples the chances that
 a child born in the bottom fifth of the population will make
 it to the top fifth.
Some inequality is good, as Winship told the committee members today.
 "In a world of perfect equality, there would be no rewards for hard
 work or risk," he said.
 The worry may instead be that those rewards are diminishing.

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