The president, in the vain hope of escaping the Obamacare cloud and of reengaging his base, has decided to make economic mobility and inequality the focus of his second term. He got bad news this week in the form of a Harvard economic study.
The Post reports: “Children growing up in America today are just as likely — no more, no less — to climb the economic ladder as children born more than a half-century ago, a team of economists reported Thursday. Even though social movements have delivered better career opportunities for women and minorities and government grants have made college more accessible, one thing has stayed constant: If you are growing up poor today, you appear to have the same odds of staying poor in adulthood that your grandparents did.”
This may contradict conventional liberal thinking, but it is not an outlier. (“Another leading voice on mobility issues, Manhattan Institute economist Scott Winship, said in an interview that he has found a similar trend in mobility — no change for children born in the 1980s compared to those born in the 1940s — using a different data set.”)
The study also demonstrates that inequality doesn’t impede upward mobility, as Jim Pethokoukis from the American Enterprise Institute explains:
Children born in 1971 in the bottom 20% of household earners, according to The Wall Street Journal, had an 8.4% chance of eventually making it into the top 20% of earners by their 20s or 30s vs. for 9.0% kids born in 1986. And about 20% of children born into the middle fifth households in the mid-1980s climbed into the top fifth as adults, also largely unchanged from earlier. Upward mobility has not been declining.
Hold on a second. Progressives like the president argue that extreme income inequality has been hurting mobility. They point to research from Saez and fellow economist Thomas Piketty finding the share of market income going to the top 1% of the population has more than doubled since the 1970s. Maybe so, but that phenomenon — driven mostly by technology and globalization — doesn’t seem to be hurting mobility. Indeed, the EOP study inconveniently found that when you looking mobility across geographic areas “upper tail inequality is uncorrelated with upward mobility … .”
In fact, the strongest impediment to upward mobility is family structure: “’The fraction of children living in single-parent households is the strongest correlate of upward income mobility’ among all the variables the research team explored. Social capital is also key since ‘high upward mobility areas tend to have higher fractions of religious individuals and greater participation in local civic organizations.’” Moreover, the inequality issue is also distorted, says Pethokoukis quoting from a separate study. (“The rise in American inequality has been exaggerated both in magnitude and timing. … The income share of the 91st to 95th percentile has not increased since 1983, and the income ratio of the 90th to 10th percentile has barely increased since 1986.”)
So in a way there is a correlation between poverty and mobility and between poverty and inequality: The family. This, unfortunately, as we’ve written, isn’t of much interest because it is a knotty topic for which the liberals’ favorite tactic, income redistribution, is of very little value.
Politicians being politicians want to come up with, as you might expect, government solutions to our ills (either tax cuts and growth, say conservatives, or massive federal spending, says the left). However, the problem, David Brooks reminds us, goes beyond the ability of head start (a liberal favorite) to children who reach adulthood without an intact family that practices good parenting. (“We’ve probably placed too much emphasis on early education. Don’t get me wrong. What happens in the early years is crucial. But human capital development takes a generation. If you really want to make an impact, you’ve got to have a developmental strategy for all the learning stages, ages 0 to 25.”)
But somehow simply changing a slew of government programs to attend to older children and teaching parenting skills to single teenagers who aren’t emotionally or financially prepared for parenting seem stop gaps at best. It’s disillusioning to those who favor statism — even a sleeker, cheaper statism — to find out there is no real government program that is going to do for children what successful parents and functioning families do. That doesn’t mean, however, the president doesn’t have a role to play. We — and he — shouldn’t give up on families without a fight.
For starters, he is a role model who can extol the benefits of finishing school, finding a job to learn basic skills, then getting married and then having children (in that order). Instead of telling youth that pot is no worse than cigarettes, he should be pounding home the message about staying in school and delaying childbearing.
But if he really wanted to be honest and constructive in his State of the Union address this week he’d say something like this:
The federal government isn’t designed to take the place of two loving parents. One size-fits all programs directed from inside the Beltway are unlikely to meet the needs of diverse communities and children with different backgrounds, needs and challenges. The best we can do is send monies directed at the poor back to states and localities which know their people best, understand their local communities and can reach out to those who are falling behind face-to-face. The solution, however, isn’t simply governors, mayors and local school boards. Every church, synagogue and civic organization can play a part — from getting truant kids back in school to providing after-school programs for supervised homework to hiring teens even part time to teach them basics work skills. It is not a matter of religion, but of social necessity that we have to speak with one voice: Finish school first, and have children only after you’ve gotten enough education to support yourself and formed a stable home with two parents. We should figure out how to encourage these behaviors in our communities. Local businesses can sponsor a bonus or offer some sort of job for finishing high school, for example, in at-risk school districts. The solution to reducing poverty and inequality and promoting upward mobility is no mystery. We just need to be honest about the roots of these issues and commit at all levels of society to promote behaviors that will help our fellow citizens attain the American dream.
Republicans should, with or without the president, echo that message. They can also pledge to protect Americans from Obama policies that harm the most vulnerable. Repeal Obamacare and put in place a reformed Medicaid program and a patient-centered health-care reform. Stop harassing localities with effective school choice programs. Reform drug laws to stress rehabilitation but don’t legalize drugs that entice the most vulnerable. Republicans can also vow to put forward pro-growth immigration reform that brings in (or keeps after graduation) the highly skilled people who are likely to start jobs and infuse the economy with innovation.
In short, there is a lot we can do to promote mobility and reduce poverty. But first we have to be honest about the extent of these problems and their causes. And then we have to go back into communities to try (by trial and error in all likelihood) to reconstruct the social norms and behaviors that will spread success. Unfortunately, I expect the president will trot out the usual ineffective and counterproductive measures (e.g. minimum wage hike, higher taxes). Republicans as a matter of policy and politics need to do better than that.