David Brooks recently wrote, contrary to my last blog, that Mitt Romney is neither too rich nor elite to truly represent the American people. Brooks claims that Romney -- whose father was CEO of GM and governor of Michigan -- is actually more akin to a “striving immigrant” than to a “rich scion.” Unfortunately, this ignores all the evidence that the best way to rise to the top in America is to make sure your father was there before you.
In 2006, a summary study that reviewed the literature on social mobility found that among the wealthy OECD countries, it was the U.S. and the U.K. that most rigidly fixed individuals’ adult income, not on their own merits, but on the qualities of their parents. To be born poor in the U.S. means that there is a nearly 50 percent chance that you will be poor as an adult. This is due to the fact that in the U.S., 47 percent of the of the economic advantage that high-earnings fathers have over low-earnings fathers is transmitted to their sons, while less than 20 percent is transmitted in countries like Denmark, Norway, Finland, and Canada.
America’s anemic mobility rate is not only a matter of justice, it is a matter of prosperity. If we penalize individuals for having been born poor, we waste the productive and human potential of millions. The difference between the progressive tax code of the Netherlands and the flat one in the U.S. is that differences in individual background separate standardized test scores of the rich and poor by half as much as in the U.S. Differences in school environment matter too. Denmark enrolls two-thirds of children in daycare and preschool, Poland enrolls 2 percent — and the difference between test scores from rich and poor schools is six times greater in Poland than in Denmark. If the U.S. is to maintain its competitive edge, it must find the right competitors — engaging not in a race to the bottom but a race to invest in the skills and training of our workers and citizens.
You might think the answer is as simple as increasing public investment in education — but alas, the U.S. and the U.K. represent both the OECD high and low, respectively, in education expenditure per student. Nor is the solution to be found through income transfers. It turns out that the correct policy mix according to one of the leading researchers in the social mobility field "is not mere money, but the public provision of social services." For example, a big reason that equality of opportunity is so high in the Nordic countries not because of high educational expenditures but because universal access to affordable day care has erased child poverty.
Social services that benefit everyone are, in fact, social investments in opportunity and long-term productivity. It is no coincidence that the U.S. and U.K., economies based on Thatcher and Reagan’s erosion of social services and social insurance programs through neoliberalism, have the lowest social mobility in the OECD. As long as members of Congress prefer “free markets and competition” to the triple whammy of “malnutrition, childhood sicknesses, and a bad education” that plagues the children of America’s low-income families, the possibility that the children of striving immigrants and the hard-working poor may actually grow up to be rich (and maybe even political leaders) is not worth betting on.
The next time someone mistakenly tells you that the U.S. promotes opportunity and social mobility better than the European “top-heavy welfare states [that] have replaced the traditional aristocracies,” let them know you’ll believe it as soon as your dad becomes the CEO of GM.