28 September 2012

Social mobility in America

The American dream is that any child can make it from the bottom to the top. That may still be true in politics; the son of a Kenyan immigrant, raised partly by his grandparents, is now president of the United States. But it is much less true, in economic terms, than most Americans think. Social mobility is less easy in America than in other countries. For example, three-quarters of Danes born in the lowest-earning 20% of the population escape their plight in adulthood. Seven out of ten poor children in supposedly class-ridden Britain achieve the same feat. But fewer than six in ten Americans do so.

Similarly, with rags-to-riches stories. It is far less common for Americans from the bottom 20% in childhood to move into the top 20% in adulthood than it is in Denmark or in Britain. On the whole, America's wealthy prosper while the average citizen struggles; the richest 1% of Americans gained 93% of the additional income created in 2010. The pay workers get has failed to move in line with productivity in the past 30 years. But Americans have yet to realise the extent of this tectonic shift. In a survey conducted in 2011 the average respondent thought that the richest fifth of the population had 60% of the wealth, not 85% as is the case. The respondents' ideal income distribution would be for the top quintile to have just 30% of the wealth.

- Economist, 23 June 2012, in a review of Joseph Stiglitz, The Price of Inequality: How Today's Divided Society Endangers our Future.

See also:
Review: Yvonne Roberts, Observer, 13 July 2012
Interview: Jared Bernstein interviews Stiglitz, Rolling Stone, 25 June 2012
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