As pointed out in a recent Brookings Institute report, economies with larger income inequality have lower social mobility.
The chart accompanying this post shows social mobility correlated with income inequality for selected countries. The U.S., which holds itself out as the “land of opportunity,” resides in the middle of the pack. Our social mobility is about equal with that in Pakistan. Many of the countries whom we consider our peers as democratic, market-based economies have higher mobility and lower inequality.
Why does this matter? Lower mobility means it’s harder for an economy to grow additional well-off individuals from the bottom up. As the trend continues, some economies will amass more individuals who are relatively weak. Because we are social creatures and to some extent only as strong as our weakest link, having a growing class of weakened individuals is a threat to the entire group.
This comes back to my argument about fairness in hunter-gatherer and agrarian societies. When humans transition to settled agrarian societies, it becomes possible to stockpile resources. As long as everyone has enough, some people having more than enough is not a threat to the group and can be tolerated. But as the disparity grows, it apparently begins to impact the overall well-being of the group.
As this PBS story points out, it’s hard to assign causal effects in this relationship. It’s even hard to establish empirically the direction of the social mobility trend in the U.S., since we don’t routinely gather the data to establish trends in social mobility. Still, there’s plenty of evidence of the growing gap between rich and poor in the U.S., and the expanding number of those living in poverty.
The PBS story also points out that the public services available in a given city or area can impact the social mobility of people in those area. There’s inequality even in poverty. It’s better to be born poor in San Jose than Detroit.
The design and delivery of public services–marketing–matters for improving social mobility, which in turn improves the health of the economy and culture overall.
When I look back over my family history, I can see social mobility tied to public services. Transportation, rural electrification, and the programs of the Great Depression helped my grandparents raise better children. The GI Bill and Pell Grants helped those children, my parents, raise better children. What public goods and services are we creating today to help raise the next generation above the current one?