American Opportunity Myths
Isabel Sawhill and Ron Haskins have written a piece for Brookings titled “Five Myths About Our Land of Opportunity.” None of it’s new to those who’ve paid much attention to these things in recent years. What’s interesting, though, is the seeming contradiction in Myths 1 and 4.
1. Americans enjoy more economic opportunity than people in other countries.
Actually, some other advanced economies offer more opportunity than ours does. For example, recent research shows that in the Nordic countries and in the United Kingdom, children born into a lower-income family have a greater chance than those in the United States of forming a substantially higher-income family by the time they’re adults.
If you are born into a middle-class family in the United States, you have a roughly even chance of moving up or down the ladder by the time you are an adult. But the story for low-income Americans is quite different; going from rags to riches in a generation is rare. Instead, if you are born poor, you are likely to stay that way. Only 35 percent of children in a family in the bottom fifth of the income scale will achieve middle-class status or better by the time they are adults; in contrast, 76 percent of children from the top fifth will be middle-class or higher as adults.
4. If we want to increase opportunities for children, we should give their families more income.
Of course money is a factor in upward mobility, but it isn’t the only one; it may not even be the most important. Our research shows that if you want to avoid poverty and join the middle class in the United States, you need to complete high school (at a minimum), work full time and marry before you have children. If you do all three, your chances of being poor fall from 12 percent to 2 percent, and your chances of joining the middle class or above rise from 56 to 74 percent. (We define middle class as having an income of at least $50,000 a year for a family of three.)
Many American families need supplements to their incomes in the form of food stamps, affordable housing and welfare payments. But such aid should not be given unconditionally. First, the public is concerned that unconditional assistance will end up supporting those who are not trying to help themselves. Second, new research in economics and psychology has shown that individuals frequently behave in ways that undermine their long-term welfare and can benefit from a government nudge in the right direction.
And third, policies with strings attached have had considerable success. One example is the 1996 welfare reform law, which required most adult recipients to get jobs, and dramatically increased employment and lowered overall child poverty. In the midst of a recession, we can’t expect everyone to work. But social policies will be more successful if they encourage people to do things that bring longer-term success.
What this seems to say is that “opportunity” is not what keeps the children of the poor from economic progress. Rather, it’s the passing along of poor habits and values.
The poor, by and large, are those who have made bad decisions: Dropping out of school, having children out of wedlock, and been satisfied with government supported subsistence living. Their children, in turn, are trapped in the same pattern of behavior by being surrounded by a culture that sees these things as the norm and actively discourages responsible behavior.
This point is emphasized when one looks at the part I omitted from Myth 1:
The United States is exceptional, however, in the opportunity it offers to immigrants, who tend to do comparatively well here. Their wages are much higher than what they might have earned in their home countries. And even if their pay is initially low by American standards, their children advance quite rapidly.
And Myth 3:
3. Immigrant workers and the offshoring of jobs drive poverty and inequality in the United States.
Although immigration and trade are often blamed, a more important reason for our lack of progress against poverty and our growing inequality is a dramatic change in American family life. Almost 30 percent of children now live in single-parent families, up from 12 percent in 1968. Since poverty rates in single-parent households are roughly five times as high as in two-parent households, this shift has helped keep the poverty rate up; it climbed to 13.2 percent last year. If we had the same fraction of single-parent families today as we had in 1970, the child poverty rate would probably be about 30 percent lower than it is today.
Among women under age 30, more than half of all births now occur outside marriage, driving up poverty and leading to more intellectual, emotional and social problems among children.
So, again, the problem is behavioral rather than one of raw “opportunity” in any macro sense.
Of course, this doesn’t mean that those who came up poor had the same advantages as the children of the wealthy and the upper middle class. The latter were much more likely to be surrounded by role models that steered them in the right direction. Further, there are huge advantages conferred by wealth and connections, such as a much greater likelihood of getting a good primary and secondary education and not only going on to college but a much higher propensity of going to a “good” school that opens up doors much harder to walk through for those who went to Podunk State Directional University.
This is interesting, too: “we have seen a growing tendency among well-educated men and women to marry each other, exacerbating income disparities.” My strong guess is that well-educated men have always married bright, socially adept women. But those sort of women are now likely to be college educated. Further, beyond the social advantages marrying that sort of women always brought, the fact that most married women continue to work outside the home even after they have children means that there are economic incentives as well.
UPDATE: Dave Schuler amplifies my point above about culture:
Many of the poor live in nearly self-contained communities and their exposure to the breadth of possibilities in the United States is really quite limited. There are places where the only lives that the kids can imagine for themselves are pimp, prostitute, hustler, professional athlete, performer, or cop. Becoming an accountant or a hospital administrator is unimaginable.