Economics: Poor Social Mobility in the U.S.

As Rich Lowry and Ramesh Ponnuru wrote in an important statement for National Review about the superiority of the U.S. over the European model:

American attitudes toward wealth and its creation stand out within the developed world. Our income gap is greater than that in European countries, but not because our poor are worse off. In fact, they are better off than, say, the bottom 10 percent of Britons. It’s just that our rich are phenomenally wealthy.

This is a source of political tension, but not as much as foreign observers might expect, thanks partly to a typically American attitude. A 2003 Gallup survey found that 31 percent of Americans expect to get rich, including 51 percent of young people and more than 20 percent of Americans making less than $30,000 a year. This isn’t just cockeyed optimism. America remains a fluid society, with more than half of people in the bottom quintile pulling themselves out of it within a decade.

But what if it turns out that America is not really such a fluid society?

I’ve referred before to this Brookings Institution study, published in 2009.

Pay special attention to this chart from page 5.

Only the UK does worse than the US among the 9 countries surveyed — and the social democratic countries of Scandinavia all do better.

This is not an argument in favor of the European way of doing things. I agree with Lowry and Ponnuru — and Charles Murray too — that American freedom and individualism are important national values to be celebrated and defended.

But let’s not flatter ourselves: Those values exact a social cost — and they would be easier to defend if the cost were less high. And the fact that this cost is not being paid by my children or (probably) yours does not make the cost less real to the one-third of America whose children do pay it.

For more, see Losing the Fight Against Child Poverty by David Frum, July 6, 2010, at Frum Forum.

Another of the interesting charts from the study, Economic Mobility: Is the American Dream Alive and Well? by Isabel Sawhill and John E. Morton, 2009, at The Economic Mobility Project is: