That's what we like to think, but a new book, Creating an Opportunity Society, by Ron Haskins and Belle Sawhill of the Brookings Institution proves otherwise. They took a close look at intergenerational mobility and found that 42% of American men with fathers in the bottom income quintile remain there as compared to: Denmark, 25%; Sweden, 26%; Finland, 28%; Norway, 28%; and the United Kingdom, 30%. They present a wealth of new and old research evidence to support the conclusion that if you're born poor in America, you're likely to remain poor.
This book is not a liberal polemic. It is carefully researched, quite readable, and takes pains to stick with what's proven to work regardless of ideology. Haskins was President Bush's Senior Advisor on Welfare Policy at the White House in 2002 and was at the center of the historic 1996 welfare reform legislation as the staff director of the House Ways and Means Human Resources Subcommittee. He is a conservative Republican. Belle Sawhill has conducted landmark research in a long career at the Urban Institute and then Brookings with a stint from 1993 to 1995 as an Associate Director of President Clinton's Office of Management and Budget. She is a liberal Democrat. Haskins is a PH.D. psychologist and Sawhill is a PH.D. economist.
I commend these two for developing such an outstanding research partnership. Listening to them present their book at Brookings yesterday morning, I was struck by how much each was willing to concede to the other on research findings that ran counter to political labels and by how much they are willing to set aside ideology to promote solutions proven to work. If only Congress would do likewise!
Unlike most expert experts, after a thorough examination of the literature and explanation of their own findings, Haskins and Sawhill explore public attitudes and cultural conventions to get at why so many past efforts at alleviating poverty have failed. They come up with strong conclusions and policy recommendations that take from both Republican and Democratic playbooks:
- We start out life with advantages and disadvantages which are hard to alter.
- We underinvest in the disadvantaged.
- Personal responsibility it very important.
- Promoting education, work, and family is very important. Convince disadvantaged kids at an early age that they need to go to college, develop a strong work ethic, and get married. Policy incentives aren't enough. Publicity campaigns are needed to change attitudes.
- Government should do more, but it can't do it all.
- Slow the growth of benefits for the elderly to fund a $20 billion per year program of specific policy changes, including some spending cuts.
You've got to have a lot of guts to push policies like this. Children don't vote, and the elderly vote over 70% of the time. Their political muscle has toppled anyone who stands in their way. But even the elderly can understand that their future is imperiled if the younger generation falters.
Commentator Juan Williams held up the vilification heaped on Bill Cosby when he had the courage to demand personal responsibility of poor minority fathers. Williams asked why we blame the poor instead of fighting racism?
New York Times columnist David Brooks called for moving beyond the Republican-Democratic divide to revive Progressivism. He urged that we stop looking for what causes poverty and devote ourselves to attacking it. He argued strenuously for reaching out to the unconscious mind, embedding the disadvantaged in schools and other institutions that 1) enlist the power of love; 2) teach impulse control; and 3) employ the lessons of attachment theory that those raised by unreliable parents aren't capable of enough trust to climb out of their circumstances by themselves.
New York City's Deputy Mayor for Health and Human Services urged reauthorizing TANF, Temporary Assistance for Needy Families. She commended the 1996 welfare reform, but noted it skipped childless adults. She urged more be done for children from birth to age 5 and to help raise the 20% graduation rate of those enrolled in community colleges. She initiated such programs in New York City. She noted our extremely high incarceration rate provides alternative education we could do without and that we need to do much more to create economic opportunity for those aged 15-24.
The webcast is well worth watching. I asked an early question about the Earned Income Tax Credit, which I formulated back in 1975. Others raised good points about the decline of middle class jobs and how we consign the disabled to poverty.
"Socialist" countries beating us
"Denmark, 25%; Sweden, 26%; Finland, 28%; Norway, 28%; and the United Kingdom, 30%"
Note that all these countries have national healthcare plans.
Everything on Insurance Review
Beside that it also has a convincing point towards education. We have to realize and spread awareness amongst our children and teenagers to go to college and complete their education inspite of being dependant over the policy incentives.
Support Systems
Support systems are also vital. Making the transition from poor/working-class background to college-educated middle class life necessarily involves making big transitions. And if you come from a community where very few, if any people, have successfully made that transition, then it's going to be incredibly difficult to stick with college and such through difficult periods.
Anyways, my point is just that there are very real barriers to transitioning between classes, beyond just the financial and academic ones. (Which are already large and formidable.)
quintile problems
Caveat: I have not read the book and I am basing the following comment on the article and general knowledge of international income comparisons. The book authors may have corrected for my comments.
International comparisons of income by dollars or comparisons of percentile rankings in two or more different countries can lead to many false conclusions if extreme care is not taken.
Some significant reasons (and certainly not the sole reasons) are:
Income is measured differently in various countries. In the US, income does not include government benefits, such as food stamps. In France, for example, income does include the equivalent program's monetary value. So if someone in France becomes wage poorer so that they qualify for a government food benefit whose value is more than the lost wage, that person's total income increases. They get paid less but the value of the program is added back to their income number. In the US, the benefit of the similar government program is not included in income and the lowered wages will lower income although with the food benefit, the income will be higher than reported. This distorts international comparisons and makes the US income numbers look much worse than they really are on a consistent international basis.
Countries have different standards of living in the sense of the number of hours it takes to work to buy something and in the item's comparative international price. In the UK, for example, clothes and food are more expensive (in a single currency such as dollars or pounds) than in the US and in more hours of work needed to buy the same comparable item, such as a dress shirt, or other clothing item, a digital camera, fresh fruits, etc.
The standard of living of the bottom quintile in different countries are not equal in what they can buy for their income and are not equal in the amount of government benefits they receive. To compare one against the other without significant adjustments is political and economically meaningless.
In terms of the number of hours of work to buy something in the US, the US has one of the highest, if not the highest, standard of living in the world. Because standards of living change over time in a country and comparatively internationally, someone can remain in the same quintile in the US and yet be better off than someone who moves up a quintile in another country. The US standard of living increases over time (just think about how much cheaper Wal-Mart items are than the comparable items before Wal-Mart, or computers, digital cameras, and many grocery store items). Someone who does not move up in percentile rank can, over time, still be better off and buy more food and other items than before. Does anyone doubt that the bottom income quintile of the US is much better off than the bottom income quintile of an undeveloped country with extreme poverty? Being in the same income quintile in an international comparison does not mean being in the same state of standard of living or poverty! To give an extreme example, just to help make the point suppose we took all the corporate lawyers in the US, created percentile income groupings for them, and compared them to percentile income rankings of restaurant workers. The comparison of the two bottom income quintiles of these two groups is meaningless. Corporate lawyers, even in the bottom income group, are well off and probably much better off than the bottom income group of restaurant workers.
Mathematically manipulating and comparing income numbers is easy. Correctly adjusting numbers for a meaningful comparison is extremely difficult. I hope the authors have done so.
Yes, we should do many things for the disadvantaged in the US, especially as a child grows up. But just doing something, even if it seems obvious, does not mean it will help. For many years, we have thrown money into education without any educational improvement of those we most want to help. Solutions that work for real world problems are often difficult to find and implement. Careful and accurate analysis helps to achieve desired beneficial results. Simplistic analysis just hurts those we are trying most to help because they remain disadvantaged.
Quintile Problems
Good points. Haskins and Sawhill rely on discussion paper no. 1938 (Bonn:IZA,2006) by Markus Jantti and others. I haven't checked it out, but I'd be very interested in your views if you have time to look into it.
America the Stratified
Pete - thanks for this post. It highlights what really is our biggest l.t. socionomic structural challenge. Over two decades ago my mom and I were on vacation and had dinner in a small Southern University town. At the next table a young professor down for an interview was telling his host about growing up as an academic. Ever since then I've noticed that more and more instead of a fluid society that the same phenomena is widespread and growing. NB: have you seen the similar data on social class and British career paths?
This data is not independent imho from the wages stagnation and income distribution data but is symptomatic of it. Our periods of greatest growth was when Savings and Investment were highest in the '50s and '60s. Consider that was also the period when the churn of WW2 and the subsequent GI Bill induced the greatest mobility in our history. With benefits for us all.
The American social contract is based on the "land of opportunity" meme. What happens to our long-term prospects if we become a rigid, stratified society where history is destiny and that contract becomes non-viable?
We can do something about it
I'm currently reading Susan Neuman's Changing the Odds for Children at Risk. She was assistant secretary of education under G.W. Bush and specializes in early childhood learning.
We've know for decades now how fundamental family environment is to emotional and cognitive development in children. From the actual number of words spoken, to the qualitative difference in language structure and attitude, there exists vast differences in experience across socio-economic demographics. These are highly predictive of educational and general life success.
Yet while we have know what the problems are, we have struggled as a society to come up with effective strategies for changing this dynamic. What Neuman presents in her book are clear, research driven solutions that not only have worked, but can be scaled up to deal with the most at-risk children in our nation's poorest communities.
And yes, this will require money. The good news, however, is that this is rock solid, evidence driven stuff. And there is much evidence that the outcomes are getting very high rates of return. Without going in to too much detail, it is difficult to give a good analysis of her recommendations. But they basically involve a high level of intervention into these struggling families (mostly poor women), from pre-natal care, to highly qualified home-visits and preschool.
Not only will these children actually get a fair shot at the American Dream, but society will enjoy reduced crime, teen pregnancy, drug addiction, productivity and in general a breaking of the cycle of poverty.
We Can Do Something About It
Amen. I tutor twice a week in one of Washington D.C.'s poorest schools. Remedial education for 2nd through 5th graders is tough. We've got to start a lot earlier, making sure mothers are off drugs and alcohol while pregnant and then reading to their kids after they're born.
Early Childhood - the most critical years
One of my personal heroes (Rolnick, Minneapolis Fed) has been beating the drum on this for years:
http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3832
Early Childhood
Yes, Rolnick and Heckman are the key researchers on the economic benefits of early childhood interventions. See this Partnership for America's Economic Success bibliography for links to their work. Rob Dugger brought Wall Street and business funding to this effort to make human capital investments where they count, with the youngest children. Unfortunately, too many poor young Americans get most of their education in jail, which we could certainly do without.