Let's start with this 2011 cartoon from Cam Cardow over at PRI:
In a new report, Richard Reeves looks at economic mobility and what it has to do with the belief in the American dream:
Since Truslow Adams coined the phrase in his 1931 The Epic of America, the “American dream” has captured this quintessential American idea: that each citizen can rise to the very peaks of his or her ambition and ability, unconstrained by barriers of class, background, or (now, at least) race. To the famous question posed by Amartya Sen, “equality of what?” (Sen 1979, 197), America has always had an answer ready: equality of opportunity...
Of course, high-flying rhetoric about opportunity is one thing; hard facts are quite another. In recent years, the issue of intergenerational mobility has broken out of academic circles into political and public conversation. In part this is because of facts—the growing evidence that relative mobility rates in the United States are rather disappointing, certainly by comparison to the American ideal, and even when compared to other nations. By the reckoning of some scholars, the American dream has been shipped overseas.
But the debate about social mobility and equality of opportunity is still unbalanced, with a surfeit of rhetoric and a deficit of data. The evidence base is too fragile for much of the political weight placed upon it. We need more data.
Is the American dream on the rebound? Over at CNN, investment analyst Kristina Hooper reports that things are looking up. She writes more people are finding jobs, getting out of debt and feeling more optimistic about the future. The New York Times, to kick off the New Year, ran an online debate about whether the modern American dream is attainable. Pew's Erin Currier is among the majority of the debaters who argue the dream is still very much under siege:
The American Dream is usually defined in terms of financial security, homeownership and higher education. Our data on financial security shows why it is in doubt. When it comes to economic mobility — the ability to move up or down the economic ladder within a lifetime or from one generation to the next — your place on the ladder as a child can often be a predictor of your place as an adult.
Just 4 percent raised at the bottom rung of the income ladder make it to the top a generation later.
The Pew Charitable Trusts uses two different measures: absolute mobility and relative mobility. Absolute mobility measures whether people have more (or less) income or wealth than their parents had at the same age. On the income side, 84 percent of American adults today have surpassed their parents. But that hasn’t translated into greater wealth, which is all the financial assets a family has minus its debt — a strong measure of economic security. Only half of Americans are wealthier than their parents were.
Despite these numbers, a recent blog post from the American Enterprise Institute discusses poll data showing that a majority of Americans still believe the dream is achievable and that hard work will lead to getting ahead. Brookings' Carol Graham looks at what feelings of well-being have to do with the opportunities people believe they have:
The right to the “pursuit of happiness” is a foundation stone of the American dream. But happiness comes in different forms, which relate in varying ways to opportunity, economic progress, and inequality... In a new paper, Milena Nikolova and I use well-being metrics and data from the Gallup World Poll to study well-being of different kinds around the world. In the poorest societies, hedonic well-being stands out as most important to respondents, as it is the dimension they are able to achieve in the face of constant daily struggles. In contrast, respondents in wealthier societies score higher on life evaluations because they have more control over the lives that they lead. Acquiring new capabilities and opportunities can in fact be an unhappy process, from a hedonic perspective. Capabilities such as employment are positive for life evaluations, and therefore for eudaimonic well-being, but also contribute to stress and anger.
Robert Samuelson argues over at RealClearMarkets the U.S. system is rigged in favor of the middle class and repairing it is as much "psychology as it is economics":
We overestimated our ability to control the economic environment. What we have learned is that outside events - here, the financial crisis and Great Recession - can overwhelm collective protections and discredit conventional beliefs. The economy is more random, unstable and insecure than we imagined. It is less susceptible to policy engineering. The fact that the upper classes can better shield themselves against its upsets naturally breeds resentment. The middle class is thinning. Belonging is a matter of self-identity, and fewer Americans buy into its defining presumptions. Whether an improved recovery begins to reverse these attitudes and restore traditional beliefs and confidence is a crucial question for 2015.
Kids and Mothers in Poverty
In the Washington Post, Lyndsey Layton reports that the majority of kids today attending U.S. public schools are poor:
The Southern Education Foundation reports that 51 percent of students in pre-kindergarten through 12th grade in the 2012-2013 school year were eligible for the federal program that provides free and reduced-price lunches. The lunch program is a rough proxy for poverty, but the explosion in the number of needy children in the nation’s public classrooms is a recent phenomenon that has been gaining attention among educators, public officials and researchers... The shift to a majority-poor student population means that in public schools, a growing number of children start kindergarten already trailing their more privileged peers and rarely, if ever, catch up. They are less likely to have support at home, are less frequently exposed to enriching activities outside of school, and are more likely to drop out and never attend college.
Meanwhile in a pair of recent blog posts, Demos' Matt Bruenig looks at how poor children in the United States do in comparison with their European counterparts as far as government support:
In my last post, I used LIS data to show that America's poorest children are essentially the poorest in the developed world. If you haven't read that post, you probably should start with it. In this post, I decompose the income that households of poor children receive, breaking it up into transfer and market income, and then do a similar ranking... All else equal, if the United States transferred the same amount of PPP dollars as Denmark to these populations, the poorest children in the US (both 0-10th and 10th-20th percentiles) would be the second richest children in the developed world, just 3-4% behind Norway's poorest children. With one of the lowest tax levels in the developed world, this is something the US could easily finance. Because it chooses not to, however, its poorest children sit at and around the bottom of the developed world in disposable income.
The Roosevelt Institute's Andrea Flynn looks at whether inequality is leading to more maternal deaths in the United States:
Today, more U.S. women die in childbirth and from pregnancy-related causes than at almost any point in the last 25 years. The United States is the one of only seven countries in the entire world that has experienced an increase in maternal mortality over the past decade (we join the likes of Afghanistan and South Sudan), and mothers in Iran, Turkey, the United Arab Emirates, Serbia and Greece (among many other countries) have a better chance of surviving pregnancy than do women in the United States. It should be no surprise that maternal mortality rates (MMRs) have risen in tandem with poverty rates. The two are inextricably linked. Women living in the lowest-income areas in the United States are twice as likely to suffer maternal death, and states with high rates of poverty have MMRs 77 percent higher than states with fewer residents living below the federal poverty level. Black women are three to four times as likely to die from pregnancy-related causes as white women, and in some U.S. cities the MMR among Black women is higher than in some sub-Saharan African countries.
If you want to learn more about robots and other automated machines coming to get a job near you, check out this recent article in the New York Times. The Center for American Progress released a new report on the state of the U.S. labor market that might be of interest:
CAP also features a new report from Harvard's Larry Summers and British MP Ed Ball on improving economic inclusion in the 21st Century:
Today, we are living in the age of globalization and technological revolution. Both have delivered much benefit to society, but have reshaped the political economy of western industrialized countries in ways that challenge the middle class and those striving to get into it. Our report is about embracing the new economic opportunities of the 21st century by finding ways to ensure they serve the vast majority of society...Just as it took the New Deal and the European social welfare state to make the Industrial Revolution work for the many and not the few during the 20th century, we need new social and political institutions to make 21st century capitalism work for the many and not the few.
In a Renewing America memo, former U.S. Trade Representative Robert Zoellick and CFR's Matthew Slaughter call on Congress to overhaul jobs policy based on three core principles: “concentrate on jobs for the long-term unemployed; supplement wages, when necessary, to encourage employers to increase hiring; and relax congressional budget rules for programs that help people become earners and increase future tax revenues." A chart shows the United States is struggling to stay ahead of its peers in employing people:
Kids, you might want to take up welding in...Texas, if you want to avoid being saddled with massive college debt that might not land you a decent paying job, reports the Wall Street Journal's James Hagerty:
Justin Friend ’s parents have doctoral degrees and have worked as university lecturers and researchers. So Mr. Friend might have been expected to head for a university after graduating from high school in Bryan, Texas, five years ago. Instead, he attended Texas State Technical College in Waco, and received a two-year degree in welding. In 2013, his first full year as a welder, his income was about $130,000, more than triple the average annual wages for welders in the U.S. In 2014, Mr. Friend’s income rose to about $140,000... Demand for welders has been strong in Texas for the past few years, largely because of booming energy-related industries. Some of that demand is expected to decline in the near-term as lower oil prices reduce exploration. Meanwhile, the number of qualified welders should rise. Schools in the Texas State Technical College network had 732 students enrolled in welding programs in the fall 2014 semester, up about 70% from three years earlier. For now, the college says most of its welding students secure jobs before they graduate.
Are public and private labor unions at odds with one another? In the City Journal, Steve Malanga looks what economic malaise is doing to inter-union relations. You might also be interested in this Vice piece on potential new union busting efforts in the coming year.
Over at Forbes, nonprofit consultant Tom Watson discusses giving to build nonprofit capacity in 2015:
I know that organizations are increasingly facing financial pressure away from program oriented gifts and grants, and toward their capacity to create growth and sustainability, and manage that process well with talented and committed people. Of course, there are exceptions in the highly capitalized precincts of the elite institutions of higher learning and culture – but among the nation’s roughly 1.5 million nonprofits, the stress of raising undirected general capacity funds against a landscape that increasing favors targeted, results oriented grants can… So I’m proposing the most important philanthropic buzzword for 2015 and beyond – that’s right, capacity. I’d love to see more philanthropists, foundations, and giving companies focus on building organizations for the long term, investing in staff ability and systems, and providing resources for organizational stability. When well-meaning board members tell my clients that organizations should “operate more like businesses,” this is what I think of.
Another year-end New York Times online debate discusses the tensions between investment and giving. One debater, Sonal Shah gives a nod to Heron in her response on not really having to choose between one or the other:
Across the emerging field of impact investing, we see charities and investors working together to build new markets and solutions in housing, health, energy and social service delivery. Organizations such as the Omidyar Network, F.B. Heron Foundation and Mercy Corps are using charitable dollars to develop new models and to seed new entrepreneurs to pave the way for self-sustaining markets. Across every level of government, policy is being created to support new models of charity and social enterprise. To solve our social challenges, we need both charity and investment. For too long we have separated them. Imagine the potential for change if we can combine the power of the heart with the power of the market.