Mobility Has Held, but Perception and Perspective Have Changed

In an essay analyzing a very specific statistical claim that President Obama made in a speech on December 6, Scott Winship finds that economic mobility has not declined; if anything it’s notched up a tad:

… an ongoing Labor Department survey has followed men and women born in the early 1980s, starting in 1997 when they were adolescents. In 2008, the most recent year for which their incomes are available, they were in their mid to late 20s. A predecessor of this survey (also ongoing) has followed a group born in the late 1950s and early 1960s. Using these two National Longitudinal Survey data sets, I can compare children born between 1962 and 1964 to children born between 1980 and 1982, observing their parents’ incomes when they were 14 to 16 and their own incomes twelve years later when they were 26 to 28.

In contrast to the president’s claim of declining mobility, I found that upward mobility from poverty to the middle class rose from 51 percent to 57 percent between the early-’60s cohorts and the early-’80s ones. Rather than assert that mobility has increased, I want to simply say — at this stage of my research (which is ongoing) — that it has not declined. If I include households that reported negative or no income, the rise in upward mobility I find is only from 51 percent to 53 percent, which is not a statistically meaningful increase. But the data provide absolutely no evidence that economic mobility declined, whereas the president said it had fallen by ten percentage points.

If the president’s statement is incorrect with respect to statistics, it may be dead on with respect to sentiment.  According to the Pew Economic Mobility Project’s 2011 poll, more than half of Americans believe that their “children will have a harder time moving up the income ladder” than they did.  The percentage who would say that “the American Dream is ‘very much’ alive” has fallen by half, from 34% to 17% since 2003.

Winship goes on to suggest (in the print version of his National Review essay) that this disparity may, in a sense, be self-reinforcing:

… A 2005 Journal of Politics article by political scientist B. Dan Wood and his colleagues found that optimism and pessimism expressed in presidents’ speeches between 1978 and 2002 had a detectable effect on consumers’ sentiments regarding the economy and unemployment, which in turn affected economic growth. So the president’s strategy is likely to hinder recovery from the Great Recession. …

Worse than any impact on middle-class anxiety or even on the strength of the recovery, however, is the message the president is sending to those struggling to pull themselves out of poverty. The data indicate that it is no less true today than it was in the past that poor children can make a better life for themselves. To be sure, it is no more true than in the past, either, a fact that should discourage complacency. But by arguing — against the evidence — that opportunity is on the decline, the president needlessly dampens the hope of those who wish to transcend their disadvantages.

One way to interpret the disconnect between perception and reality is that, metaphorical lottery tickets aside, climbing the ladder of success is hard work.  The relevant population, especially its younger members, might therefore be especially vulnerable to messaging campaigns telling people that it is impossible and that government programs must fill in the rungs.

That may explain the responses that Valencia College Economics Professor Jack Chambless received, even before the Occupy movement arose, when he asked about 180 students to describe “the American Dream” and what they wanted the federal government to do to help.  (Video of related interview video here.)  About 80% said “they wanted free healthcare,” government-financed tuition, government home-loan down payments, and government-granted employment.  To some degree, the presentation of the questions could have affected the responses, first presenting the idea of the American Dream and then immediately asking the students, essentially, to imagine that the federal government could have a role in their achieving it.  The response, in that context, was not so much socialist as it was unimaginative.

Still, one need only flip through the myriad self-help reality shows (such as The Biggest Loser or My Extreme Animal Phobia) to observe that professionals aiming to help their clients to achieve difficult goals never tell them that the situation is hopeless.  They never emphasize how easy the project could be with the right tools or services.  Given the state of public discourse about economics, it would be more surprising if young adults were increasingly of the bootstrap school, rather than the government-assistance school.

Economic mobility can be difficult, and it is not a sure thing.  But one-in-two odds are hardly insurmountable, and they no doubt improve considerably among those willing to do the work.