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.
The main thing hurting opportunities in the US are the high taxes.
The more hard work you put in, the more of your earnings have to go to Obama, Pelosi, and Barney Frank.
Because of this, there is no incentive to excel. The only reason I am still a greeter at Wal-Mart is because if I earn more money it will just go back to Washington.
As long as there are death panel taxes, capital gains taxes, and extremely high income taxes, nobody is going to try and better theyselves.
This was an excellent item for you to pick up, James.
I think though that the challenging questions aren’t tied to the responses you offered. The tough question is “if Nordic market-socialism works, why is it so off the radar?” Is it because it works?
I do remember that when the “Swedish experiment” had been judged to fail the right was all over it. Now, people will call Obama a socialist and say that implies Venezuela or the old Soviet Union.
FWIW, I like a mixed economy. I like cleanly capitalist enterprises, like car companies. I like small but cleanly run government institutions, like schools. I actually prefer a separation between the two. Public-private partnerships ensure the worst of both worlds, and near-immediate corruption.
We have too much of that, don’t we? Corrupt public-private partnerships in banking … and now car companies. A game of “let’s pretend a free market” isn’t working. Maybe we should understand how other mixes do work.
I would, too, if I could find any. You presumably do not live in Chicago.
I was speaking in the abstract there, we don’t have “cleanly capitalist enterprises, like car companies” right now either.
I actually live in California, where if I recall correctly, half our budget goes to education. I doubt we are getting the bang for a buck that we could.
(Fluff majors should not even be offered at public colleges.)
Are you trying to tell me that my internship during college with my dad’s friend’s business was not entirely based on merit? How insulting!
Well, part of the reason there is sorting in marriage is that with the older marriage ages, we’ve already sorted by education. At 27 or 29, I doubt many college educated singles are socializing with many of the opposite sex who aren’t college educated or in college and vice versa.
We must also realize that until recently the better paying opportunities for non-college graduates, i.e., plumbers, electricians, etc. were filled with aging baby boomers since the quantity of those jobs has declined or stagnated since the ’80s. Not to mention, many jobs you could apprentice in before now require a college degree just to get an interview. Jobs such as estimator for construction, marine engineer, etc.
As you noted, this is a serious misunderstanding and misuse of the word opportunity. The fact that people don’t seize the opportunities available to them can in no way be construed as negating the opportunity.
Another argument without data? How did you measure that opportunity, and do you have a link? Oh wait, Sarah told you at a rally, so you know.
Seriously, we have structural problems here. Some can be laid at the feet of “teh liberals” sure, but ignoring them ain’t going to fix them.
A generation is graduating from college with unmarketable degrees and tens of thousands in debt. Understand “I have an English degree but I’m a personal trainer” and you understand America.
Not sure what you are trying to say here. Majoring in English was a personal decision.
Offering an unemployable major(*) at a subsidize public institution was a political decision, worse yet if the loan went through Sally Mae.
(* – some small number of English and Music majors find related work, but the numbers might be so small that either standards should be high and enrollment should be limited, or it should be left to private colleges. If you are an English major at a true private college, I have no problem at all.)
BTW, Anon … when I say I have no problem with a private major in whatever you want, I mean I have no problem from the freedom perspective.
I think I might really have a problem when the college industry sort of greases the skids to failure though. Did someone say to “I have an English degree but I’m a personal trainer” are you sure? Or did they say “I can get you a loan.”
Okay, I understand your point now.
There is no way, however, that any university would ask, “Are you sure?” The English department would raise a huge stink.
A university is not a trade school. Getting a BA with a major in English produces an educated adult who can critically read and has excellent written communication skills. There are countless jobs where those skills can be applied.
Now, if one wants a job teaching English literature or somesuch, then a BA won’t be adequate. And there are limited opportunities even for those with MFAs or PhDs in English. But even mediocre schools place some PhD and MFA graduates in related jobs.
The challenges the poor face are more than just bad habits and mores. They include heavy crime, unresponsive (occasionally hostile) police, underfunded schools, a lack of decent healthcare (much less dentistry), shoddy housing that is commonly not up to code, sub-par municipal services (e.g. the trash isn’t picked up as often nor as thoroughly), and, since the collapse of the manufacturing sector, a lack of jobs.
So while it may feel good to think that they just have bad habits, there are a few structural issues as well.
There are two ancient words: occupation and avocation.
I going to say that state funded schools have no business teaching avocations. Right now, they fail to distinguish.
BTW, on this “countless” bit:
Feel free to quote me success or failure rates for state college liberal arts majors. Countless? Or fodder for flat-world unemployment?
Odograph,
When you say, “state funded schools have no business teaching avocations,” you’re forgetting about Berkeley, UCLA, U Mass, Texas at Austin, Michigan, Michigan State, Wisconson, UNC, William & Mary, Illinois, etc.
Again, they’re not trade schools. Getting an undergrad in physics doesn’t necessarily lead to a physics job, either. Ditto political science. But people with these degrees find jobs using their analytical and math/writing skills all the time.
The economy is bad now, obviously, with 10 percent unemployment. But I’m guessing more than 90 percent of those with bachelors degrees in English are gainfully employed. You’re the one asserting that they can’t find jobs, putting the burden of producing statistical evidence on you.
When you say they are “not” trade schools, you are saying that you want them to teach non-commercial skills. OK fine, but on my dime?
Your position is quite non-libertarian.
In a pragmatic sense, students and society should look at ROI. Return on investment.
If the ROI ain’t there, should we be taxing hard working ditch diggers to pay for it?
(When I have time I’ll dig up a survey, most people I talk to agree that they are there … earning by major, five years out from graduation, etc.)
Scott wrote:
I’m offering a fix for the educational funding problem. If the middle class just “wants” colleges to teach their kids ethnic studies or whatever … we can do it, right?
With enough taxes, sure.
odograph, you’re an ass. You do not understand everyone who disagrees with you as much as you think you do.
There are multiple factors that impede the poor from moving up. Higher taxes and creating a business environment that encourage business to “outsource†and move out of the country is one. It is hard to move up when there aren’t many stepping stones to do so. When you have a hard time putting food on the table, you end up spending most of your time doing just that.
If you do not know of opportunities, they may as well not exist. Even if you know a little about them but don’t know how to get there or know very view details about the opportunities and the process, it makes it extremely difficult. It is much easier today thanks to the internet but the lack of knowledge and guidance is still a major impediment.
Social groups have an impact not only in habit but in what type of “common†knowledge you have. I grew up with a good deal of knowledge in how to succeed in a certain industry but knew little outside including much about college. I stumble through OK but it would have been much better with some knowledge others took for granted.
An amusing chart at the bottom of this page, for James:
http://www.northeastern.edu/magazine/9901/labor.html
So what am I missing charles? Do you think taxes should fund non-productive majors?
On what schools should teach or not teach, I was watching a college game this weekend, Florida vs. Georgia (I think Georgia), when I had a WTF moment. Said moment occurred when it was revealed that Tim Tebow is majoring in Family, Youth and Community Sciences….
Well, I don’t this quite makes sense. Does this mean that we should constantly adjust funding by funding only majors that make above the median wage?
Also, by this standard, we should stop funding elementary school education majors, since they make even less than English majors.
Note that I actually do think that universities should be responsive to public needs. I just think that defunding majors that have a lower salary is probably not the right way to go about it.
There are two ways to look at it. You can say that state schools are actually there to promote enterprise in the state, or you can say they are there to make people happy.
If state colleges are there to promote enterprise, you try to determine if graduate X produces extra business activity over time, exceeding costs (all relative to a HS diploma).
Well I see two problems with regard to this. First is that Universities are treated as trade schools by every HR department in the universe. my field is computer networking, but last time i had to go through a job search in ’06 I was astounded at the number of jobs that *required* a computer science degree which I don’t have. So the fact that in 1985 I didn’t study Computers negates my 15 years real world experience on technologies that didn’t exist in 1985 (not even mentioning the fact that in Network Engineering you would want someone with a computer engineering degree not a computer science degree … but I digress)
Second, there is no real vocational training in this country that is accredited the way collages and universities are. The credits earned in vocational degrees at two collages are not transferable to university and are sort of looked down on. we are way too over educated for simple jobs in the country for no other reason then HR departments are lazy.
Finally there is a world of difference in a middle class upbringing that lower class people can even begin to make up for even if they wanted to. I’m surrounded by mediocrities who if it weren’t for the fact that they have been instilled with middle class cultural norms and the connections that tend to go with it would be homeless (and they all think they are highly competent and productive).
Weird question about points one and four – if only 35% of children in the bottom fifth end up in the middle-class, doesn’t that contradict the point about your chance of being poor falling from 12% to 2%? Or is the latter a measurement of anyone’s chance of ending up poor?
Keep in mind that those “gains” happened in a period in which an economic expansion began to occur, and in which wages for high-school-graduate-only workers were rising. I’d be skeptical of saying that the “tough love” policies created those gains – what if, for example, the policy change had happened in 1991 or 1992?
If by “imagine” you mean “realize that their background realistically won’t help them get to the latter positions (accountant, hospital administer). Most of the kids in the crappy neighborhoods know that the education they’re getting is bullshit most of the time.
Standard fare for a Brookings Institute Report, James. A while back Emmanuel Saez updated his income disparity data, which can be found here in a more simplified form. A couple of snips will help set the stage:
Clearly this kind of data needs an explanation, and the sweet peas from Brookings have figured out how to explain this data away. First of all, we have to find out who the blame. And of course, you take a big bite out of the offered apple, to wit:
And here is the bite:
That was actually the second bite of the apple, the first was this lovely:
Good news James, we have identified the root cause for poverty in the US, and it has nothing to do with income inequality, disparate educational system or the abysmal level of social services we provide to pregnant women or young mothers.
Next, they have to dumb down the income of the middle class. From Myth 4 (If we want to increase opportunities for children, we should give their families more income) we get this lovely: We define middle class as having an income of at least $50,000 a year for a family of three. More kids, then what, another 10K of income needed per added kids? Assuredly not if you have to build a projected college fund of a minimum of 50K/per kid. And do not get sick, and do not lose your job.
In my grouchy old age, it takes a magnum dose of absurdity to tickle my fun bone, and this put on the floor and gave me a belly ache:
Recent research shows? Come, come now Isabel and Ron, that data has been available for over 20 years. The difference is what you decide to invest in. In Scandinavia, folks decided to invest in their people. By definition that is to maximized the potential of the young, promoting continuing education for all, and ensuring the health of the population. We have chosen a different path…
Pssst 1#: Links to support systems to pregnant women, young children in Sweden provided on request. Warning, will cause heart burn to those who accept James thesis that the poor are irredeemable.
Some interesting numbers here Paul:
Educational attainment of persons aged 25 to 64 years old, percentby country, 1992 (6)
Primary Secondary College
Country Only Also Also
---------------------------------------------
United States 16% 53 24
Netherlands 42 37 21
Canada 29 30 15
Denmark 41 40 13
Germany 18 60 12
Norway 21 54 12
Sweden 30 46 12
United Kingdom 32 49 11
Finland 39 43 10
France 48 36 10
Switzerland 19 60 8
Italy 72 22 6
The Nordic countries do have free university (in at least some cases) but they also graduate fewer.
I do not think you can compare the Scandinavian educational system to that in the US Odograph. My knowledge lies in the Swedish system, but the Norwegian system is not too different, and presumably that holds for Denmark and Finland.
High school is certainly more rigorous, and there is an early split into various types of high schools, some more technical than others. The same holds for post high school studies, where a variety of different disciplines are offered outside of the University tract. Graduate tracts are different, for example a medical doctorate is 6 years of University study after high school, but if you want a real doctorate in medicine, you have to do original research and defend a thesis… You can practice medicine without the real doctorate…
More on this some time in the future, but one illustrative point. One of my nieces is studying physics and nuclear power plant management. Not at a University, but at a school set up by the nuclear power plant in Sweden. She will not get a “University degreeâ€, she will get a technical certificate that is recognized through out the EU. Her twin brother attended an “International High School†where course work was in English. He is at the University of Uppsala, and will probably pop up as a graduate from a University… Shifts from University to technical schools are common.
Perhaps a better index is literacy rate, judging from our high school graduates, and the stories emanating from Community Colleges remedial course work, we ain’t doing to well…
As my pappy used to say: You get what you paid fer…
Thanks Paul. I think Nordic systems like those have some strengths. We have a bit of flexibility with junior colleges and more targeted AA degrees.
Sometimes a trade school is the right answer, and sometimes an assembly line toward college for its own sake is a disservice.
Graduate too many, or too many in some majors, or too many in weak majors, and we aren’t doing the kids any favors.
And it isn’t like we have to stifle people’s broader education. We should have good public libraries, and (yes) good public television.
(lest we all descend to 120 channels of Ghost Hunters)