Economic mobility is a myth, whatever the presidential candidates say

Politicians promote the idea that hard work can carry you anywhere. But the American dream is just that — a figment of our collective imagination.
Illustration of personal climbing a broken ladder.
What really makes America unique when it comes to economic mobility is our blind spot.Eleni Kalorkoti / for NBC News
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By Evan Horowitz, director of research communication at FCLT Global

Sen. Kamala Harris, D-Calif., struck a deep nerve — and invigorated her campaign — when she attacked former Vice President Joe Biden for not embracing busing as a way to integrate public schools in the 1970s, noting that she herself was a young girl whose life has been transformed by a school busing program.

Biden’s record on this and other racial justice issues has since become a major point of contention, and his lead in the polls has sagged. In that debate-defining moment, Biden was tarred as someone who stands against equal opportunity. And that is a serious blow in American politics, where opportunity is regularly invoked as a solution to poverty, inequality or any force that keeps disadvantaged kids from rising to the top.

The whole Horatio Alger, rags-to-riches, pull-yourself-up-by-your-bootstraps story about hard-working folks who crack into the elite is either greatly exaggerated, or utter bunk.

Too bad it’s a myth. The whole Horatio Alger, rags-to-riches, pull-yourself-up-by-your-bootstraps story about hard-working folks who crack into the elite is either greatly exaggerated, or utter bunk.

I mean, sure, the scions of poor families do sometimes climb their way up the income ladder, just as rich ones sometimes fall to the bottom. But while these success stories are heralded as the quintessential American experience, and both political parties trumpet these anecdotes as the end their policies achieve, they are actually the exceptions.

If you’re thinking, “That’s just because we haven’t done enough to shake up the entrenched class structure with equalizing acts like busing,” you might want to think again. Even herculean efforts to reshape the social order have proved ineffectual.

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Consider what happened after the upheaval of the Civil War. When slaves across the South were suddenly freed, slave owners lost a lot of their wealth. As in: a lot, a lot. Counting both the direct cost of lost slaves and the shrunken value of land used for slave-intensive crops, the richest southerners saw their wealth drop by 75 percent, according to a working paper released in March. The authors call it “one of the largest compressions of wealth inequality in human history.”

Yet within a single generation, the children of these decimated, slave-owning families had reclaimed their place at the top of the South's economic system. They got out of plantation farming, found new white-collar jobs and rapidly leapfrogged their white peers.

How’d they pull it off? The paper’s researchers argue that social connections made the biggest difference. Even stripped of their wealth, the former slave owners could still open doors to educational and career advancement for their children.

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This is hardly the only study to suggest that economic mobility is far rarer than people tend to assume. In "The Son Also Rises" (get it?), economist Gregory Clark tracks economic privilege across centuries and finds incredible levels of consistency going back to early modern Europe. One exemplar is the 17th century British parliamentarian and diarist Samuel Pepys (rhymes with the marshmallow candies that can also endure across centuries). Turns out Pepys' progeny have consistently remained among the British elite, with a statistically improbable rate of attendance at elite universities followed by lucrative careers. Meanwhile, families that were struggling in the 17th century are more likely to find themselves in the same position today.

Of course, America is supposed to be different; the essence of the American dream itself is that hard work can carry you anywhere. But that ideal just doesn’t match reality.

Even among immigrants, who are so central to the myth of American opportunity, mobility is tightly constrained. A 2017 study tracking U.S. immigrants and their children over recent decades found that these kids do tend to rise up the social ranks, but mainly until they match the social status their parents once held in their former country. So what looks like upward mobility — child of immigrant parents climbs comfortably into the American middle class — is really what the authors describe as a "reproduction of their parents' pre-migration status."

More generally, there are two ways to think about the failings of economic mobility in America.

The first issue is whether people today are doing better than their parents, or what’s sometimes called absolute mobility. That’s supposed to be a lower bar, because technological innovation is constantly advancing in ways that make societies richer and more productive. And indeed, at times in U.S. history, this measure has shown better results. Children born in 1940, for example, had about a 90 percent chance of outearning their parents, according to the leading analysis from the Opportunity Insights group at Harvard University. Yet that number has done nothing but drop ever since. Children born in the 1980s have just a 50-50 shot, which is the kind of coin-flip odds that bespeak a world of stagnant economic growth.

Then there’s the other side of economic mobility, the one we’ve been focused on more directly: relative mobility. This touches more closely on the core myth of the American dream: Can people born at the bottom scrape their way to the top through hard work and perseverance?

What really makes America unique when it comes to economic mobility is our blind spot.

Here the numbers look especially dim, again according to the work of Opportunity Insights. Kids born in the poorest 20 percent of U.S. households around 1980 had about a 1-in-13 shot of ending up among the richest 20 percent of households (for black kids, it was nearly 1-in-40.) Obviously, this is a big leap — bottom to top — but it’s become a favored measure among mobility researchers in part because it shows just how far apart the rungs on our economic ladder have become.

What really makes America unique when it comes to economic mobility is our blind spot. In one study comparing the U.S. with Britain, France, Italy and Sweden, researchers found that mobility over the last three or so decades is actually lower in the U.S. than in the European countries, where the odds of climbing from the bottom 20 percent to the top 20 percent are more like 1-in-9. But that’s just half the story. They also found that Americans, and only Americans, overestimate the chances of moving up.

Misbegotten optimism aside, these various accounts suggests that immobility — not ladder-climbing — is the default condition of human economies. Through centuries, through wars, through a liberation so radical that it the upended the entire Southern economy, families at the top have found ways to stay there, leaving families at the bottom little avenue to escape.