Immobility Of Economic Mobility; Or Running To Stay In Place

It’s hard to find well-informed and insightful discussions about certain hot-button issues. This is particularly true for issues related to economics for wealth represents power.

Poverty, inequality and mobility all speak to how power is shared or monopolized. They also relate to how education, knowledge and the media are controlled and who controls them. Discussion is difficult because the system silences or disregards most of those impacted by what is being discussed or whitewashed. When the upper class elites (political, media and academic) begin talking about the lower classes, you should immediately look for the potential spin and the too often lack of probing depth of analysis.

As a jumping off point, let me use the example of a recent paper by National Bureau Of Economic Research (Is The United States Still A Land Of Opportunity? Recent Trends Intergenerational Mobility). Both the paper and the reporting on it show the difficulties of seriously dealing with the problem. The New York Post had an article by Linda Chavez (Inequality: It’s the family, stupid) which, like many similar articles, made this statement:

President Obama and the Democrats have decided “income inequality” is the major domestic issue confronting Americans. But a new study by liberal economists challenges many of the president’s and his political allies’ assumptions about the growing gap between rich and poor.

Well, not really. When you look at various data, the so-called assumptions aren’t the problem.

The focus on the study had to do with specific generational cohorts (The social mobility muddle by Robert J. Samuelson):

“We find that children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s,” write the economists. Comparing their results with earlier studies covering 1950 to 1970, they also find little difference. Social mobility “remained remarkably stable over the second half of the twentieth century in the United States,” the study says.

Something is strange about this data. There is a disconnect. As even the authors of the paper noted:

Based on all of these measures, we find that children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s. However, because inequality has risen, the consequences of the “birth lottery” – the parents to whom a child is born – are larger today than in the past

The middle class had been continuously growing until 1974. Since then, the middle class has been disappearing, the middle class that bridges the gap between the poor and rich.

All this study is saying is that most Americans today are at least as bad off as they were decades ago. Most Americans, generation after generation, are on average stuck in their class position, no more likely to rise or fall than before.

Even so: job security and good benefits are becoming a rarity, wages are stagnating, inflation is growing,  buying power is shrinking, costs of living are getting more expensive (especially medical bills), costs of college put kids in debt before they even graduate, debt in general is overwhelming many people, bankruptcy is becoming common, families are losing their homes and life savings, small businesses are having a harder time competing against big biz, and much more could be added. But because of public assistance programs most Americans are managing to not completely go under.

Basically, the economy is doing worse for most Americans and only the government is artificially keeping the whole system from crashing down.

Meanwhile, the rich are getting richer. Average economic mobility is staying about the same, but the rich are moving up into the stratosphere. Of course, the 1% is the 1% even as that entire 1% moves further away from the 99%.

As J.J. Feinauer explained in Why is upward mobility in America stagnant?:

“The findings also suggest that who your parents are and how much they earn is more consequential for American youths today than ever before,” The Washington Post’s Jim Tankersley writes. “That’s because the difference between the bottom and the top of the economic ladder has grown much more stark, but climbing the ladder hasn’t gotten any easier.”

The economic system overall isn’t doing well, even as the wealthiest are laughing all the way to the bank. The Journalist’s Resource (U.S. poverty and inequality: 2014 overview and research trends), looking at other data, made this absolutely clear:

A paper from Stanford University, “State of the Union: The Poverty and Inequality Report 2014,” synthesizes economic data and academic research to paint a full picture — a “unified analysis” — of key indicators of the nation’s economic health that may not receive the same visibility as GDP, aggregate growth patterns or stock market trends. Produced by the Stanford Center on Poverty and Inequality, which receives some federal funding, the report enlisted subject-area academic experts on issues such as the labor market, health, education and income trends. Overall, the data suggest a “broadly deteriorating poverty and inequality landscape.”

To return to the data of the NBER paper, The Equality of Opportunity Project summarized some of the details:

Is America the “Land of Opportunity”? In two recent studies, we find that: (1) Upward income mobility varies substantially within the U.S. Areas with greater mobility tend to have five characteristics: less segregation, less income inequality, better schools, greater social capital, and more stable families. (2) Contrary to popular perception, economic mobility has not changed significantly over time; however, it is consistently lower in the U.S. than in most developed countries.

All of that is obvious.

People who are well off live in better conditions and are able to maintain those better conditions across generations. They have the money to fund their schools and libraries. They have a ton of social capital and the basic privileges of a middle-to-upper-class lifestyle. Their lives are less stressful, their marriages are less stressed, and they have more free time to spend with their kids. They have the wealth and they have the connections and opportunities to use that wealth to offer their children a very rosy future.

And people who aren’t well off live in worse conditions.

The New York Post article began well by discussing some of these issues:

The researchers delved deeper to see what might explain these variations. They found that areas with large populations of African-Americans had lower mobility. What was surprising was that whites who lived in those communities with large African-American presences also experienced lower rates of upward mobility.

The study also found that areas with less urban sprawl had higher intergenerational mobility, and where there was substantial racial and economic de facto segregation, mobility decreased. The strength of social networks — as measured by participation in civic or religious groups, for example — also correlated with mobility. “High upward-mobility areas tend to have higher fractions of religious individuals and greater participation in local civic organizations,” the study’s authors write.

Exactly. Not everything is about race. It has to do with structural classism and the enduring neighborhood effect. But then the article veers off into typical nonsense. As the author explains in her great wisdom, jumping from correlation to causation:

But the most important finding is one that most conservatives won’t be surprised at and many liberals would rather ignore: “The fraction of children living in single-parent households is the strongest correlate of upward income mobility among all the variables we explored.” The more single-parent households in the area, the lower the mobility.

And, as with race, the correlation holds even for those who don’t fit the category. Children from intact families experience lower mobility rates if they live in areas with large numbers of single-parent households.

This is the danger of a little bit of knowledge. It can lead to narrow analyses and simplistic conclusions. The problem in this case was the author wasn’t even sure what she was concluding. If the family is so important, how does the larger social environment trump the direct family influence?

In The Nurture Assumption, Judith Rich Harris tackles this assumption that all or most of the blame can be put on families. She even takes on the race angle (p. 240):

I mentioned a study of African -American kids from “high risk” families —no fathers, low incomes. The ones who lived in low-income neighborhoods were more aggressive than their middle-class counterparts; aggressive behavior was the norm where they lived. But the ones who lived in mostly white, middle-class neighborhoods were not particularly aggressive. These black kids from fatherless, low-income homes were “comparable in their level of aggression” to the white, middle-class kids they went to school with. They had adopted the behavioral norms of the majority of their peers.

So, it goes both ways. Social environment trumps family conditions in all scenarios. Peer influence, in particular, is very powerful. That supports the liberal position, contrary to Chavez’s claim.

As Harris explains in detail, there are a lot of complex factors involved (pp. 285-287):

When the biological father is living but not living with his kids, you have a family situation that is statistically associated with unfavorable outcomes for the kids. Let me show you how it might be possible to account for the unfavorable outcomes without reference to the children’s experiences in the home or to the quality of parenting they receive there.

Most single mothers are nothing like Murphy Brown: most of them are poor. Half of all homes headed by women are below the poverty level. Divorce usually leads to a drastic decline in a family’s standard of living— that is, in the standard of living of the ex-wife and the children in her custody. 22

The loss of income impacts the kids in several ways. For one thing, it can affect their status in the peer group. Being deprived of luxuries such as expensive clothing and sporting equipment, dermatologists and orthodontists, can lower kids’ standing among their peers. 23 Money is also going to play a role in whether the kids can think about going to college. If it’s out of the question, then they may be less motivated to graduate from high school and to avoid getting pregnant.

But by far the most important thing that money can do for kids is to determine the neighborhood they grow up in and the school they attend. Most single mothers cannot afford to rear their children in the kind of neighborhood where my husband and I reared ours —the kind where almost all the kids graduate from high school and hardly any have babies. Poverty forces many single mothers to rear their children in neighborhoods where there are many other single mothers and where there are high rates of unemployment, school dropout, teen pregnancy, and crime. 24

Why do so many kids in these neighborhoods drop out, get pregnant, and commit crimes ? Is it because they don’t have fathers? That is a popular explanation, but I considered the question in Chapter 9 and came to other conclusions. Neighborhoods have different cultures and the cultures tend to be self-perpetuating; they are passed down from the parents’ peer group to the children’s peer group. The medium through which the cultures are passed down cannot be the family, because if you pluck the family out of the neighborhood and plunk it down somewhere else, the children’s behavior will change to conform with that of their peers in their new neighborhood.

It’s the neighborhood, not the family. If you look at kids within a given neighborhood, the presence or absence of a father doesn’t make much difference. Researchers collected data on 254 African-American teenage boys from an inner city in the northeast United States . Most of the boys lived in households headed by a single mother; others lived with both biological parents, a mother and a stepfather, or in other kinds of family arrangements. Here are the researchers’ conclusions:

“Adolescent males in this sample who lived in single-mother households did not differ from youth living in other family constellations in their alcohol and substance use, delinquency, school dropout, or psychological distress.” 25

Within an economically disadvantaged inner-city neighborhood, the kids who live with both parents are no better off than those who live with only one. 26 But within a neighborhood like this, the majority of families are headed by single mothers, because mothers with partners generally can afford to live somewhere else. The higher income of a family that includes an adult male means that kids with two parents are more likely to live in a neighborhood with a middle -class culture and, therefore, more likely to conform to middle-class norms.

This all shows how important class is. Also, it shows how upward and downward mobility relate to class influences. But I don’t want to leave this issue without tying it more closely to race. Much of this has nothing to do with race, but much of it has everything to do with race.

Considering Pew data, Jessica Cumberbatch Anderson (in Economic Mobility For African Americans May Be A Myth, Pew Report Shows) points out:

“Specifically, African Americans are much more likely than whites to be stuck at the bottom of the income ladder over a generation, and also at the bottom of the wealth ladder,” she said. They’re also more likely to fall from the middle. [ . . . ]

“It is the case that African-American families manage to get to the middle class and they have some sense of economic security, but their ability to pass that on to their kids is not as high as the white families,” she said.

As the author continues, she points out how racial segregation can trump even class influence:

And while this particular study didn’t delve into specific reasons for this gap, Currier pointed to previous research showing the impact neighborhood poverty has had on maintaining wealth disparities over time. “Two thirds of African-American children born between 1985 and 2000 are being raised in high poverty neighborhoods,” compared to just six percent of white children, Currier noted, proportions that haven’t shifted much over the last 30 years. “It isn’t the case that two thirds of African-American families are poor, but a lot of even middle-class African-American families are living in high poverty neighborhoods and research shows that, that environment in childhood increases a person’s chance of downward mobility by 52 percent,” she added.

Interestingly, the author then brings up yet another NBER paper which seems to be a necessary corollary to the other one:

A study published in May by the National Bureau of Economic Research may have hinted at one of the barriers to moving out of those poverty-stricken neighborhoods, revealing that black and Hispanic homebuyers pay as much as 3 percent more for their homes, regardless of their income, wealth or credit profiles.

It turns out that the actual data shows a much more dire picture than some of those writing on the subject would suggest.

Simply stating the fact that economic mobility by some measures hasn’t decreased isn’t to say most Americans are doing well. It isn’t even to imply that economic mobility comes even close to being a realistic hope for many Americans. If you are poor and especially if you are a poor minority in a poor minority neighborhood, you are shit out of luck. For these people, it’s a constant struggle, running just to stay in place.

American Winter and Liberal Failure

American Winter is a new documentary that is out right now. It’s about how easily families can fall from middle class into poverty, even when they do everything right.

I watched a free screening of it, along with my brother and a friend, at a community-supported theater that closed down years ago as a for-profit movie theater. That community theater seemed like an appropriate venue.

The turnout was fairly impressive as it was almost a full house. I wonder what impact documentaries can have. I put great faith in knowledge, but it is easy to be dismissively cynical about any positive change resulting.

If anything, I see the fact of such documentaries even being made, much less watched, as the result rather than the cause of changes that are already happening (whether or not it is positive, it would be a bit early to say). Just by casual observation, it is clear that public opinion is shifting and that the former consensus has been eroded. What profoundly saddens me, though, is the knowledge that such cold-hearted capitalism/corporatism not too long ago was strongly supported by so many average people. An entire generation of Americans turned their back on those in need, and too many continue to do so.

It wasn’t strangers far away who supported such moral corruption. Conservatives obviously supported it and even many liberals supported it, probably quite a few of the people around me at that theater. Those who got their slice of the pie thought everything was fine and it apparently never occurred to them what would happen when no one baked any more pies and the last slice was taken.

None of this was forced on the American people, although it could be said that the American people forced it on many others, both the struggling in this country and all around the globalized world. American voters bought the rhetoric hook, line and sinker. Meritocracy, trickle down, free markets… the rhetoric sounded so nice, just as long as it was only other people suffering the consequences.

What woke up the American public was their too late realization that they were part of the struggling masses. A refrain by the people interviewed in the documentary was that they never thought that it would happen to them. Only worthless losers, lazy deadbeats, welfare queens, moral failures, social reprobates, criminal leeches and other inferior types ever need or ask for assistance from others… or so goes the unstated rhetoric that these people had come to accept.

Predictably, people love to judge others for their problems until the same thing happens to them. It is such condescending judgment that allowed it all to get so bad. But why does it take immense personal suffering, not to mention near economic collapse, to remind people of basic compassion and common decency? This frustrates me to no end. Why do we have to let problems become so festering and overwhelming before we even allow honest public debate? All of this is as preventable as it is predictable… or rather it should be preventable because it is so predictable.

One of the major points of American Winter is that for these families poverty was preventable. None of this is a mystery or even complicated. All it takes is the collective will to implement what we know has been proven to work.

This point was expanded in an interesting direction. It is cheaper to prevent the problem than to pay for taking care of it after it becomes a problem.

That doesn’t even include all the secondary costs incurred if the poverty becomes established and continues, especially if it creates a permanent underclass of the severely impoverished: permanent unemployment or underemployment, homelessness, psychological stress and related issues, alcoholism and drug abuse, drug dealing, gangs, crime and imprisonment, violence, increase of homicides and suicides, prostitution, unstable families, divorce, single parents, low grades and lower school achievement, dropping out from high school, not going to college, lack of health insurance and quality healthcare, etc. Add to that all the other problems that go with a shrinking middle class, low socioeconomic mobility, and growing economic disparity: food deserts, obesity, diabetes, malnutrition, STDs, teen pregnancy, and on and on and on, ad infinitum.

All of it is preventable and is less expensive than the alternative. What is most interesting about this is that there isn’t a good criticism that can be offered by conservatives of any variety, especially not fiscal conservatives. Only the most hearltess libertarian or the most belligerent Randian objectivist could dismiss both the moral and fiscal reasons for ending and preventing poverty. It isn’t a matter of not being able to afford poverty prevention. Quite the opposite. We can’t afford to do nothing.

Besides, democracies that get too large of economic inequalities inevitably become banana republics. There is no way to have political democracy without economic democracy. Of course, many on the right would claim they don’t want any democracy at all or else as little of it as is possible, but they should be careful what they wish for. They will get it if they continue to push their luck, assuming we aren’t already past the point of no return.

Meritocracy is presented as a close enough approximation to democracy and/or a replacement for democracy. Hard work is the reward we are to accept for allowing ourselves to be politically disempowered. Voting with our dollars is supposedly all that matters, corporate personhood for corporate ‘democracy’ with the corporation that has the most dollar-votes getting to represent us the consumer-citizens, a la Citizens United.

Indeed, the ideal of a meritocracy is an odd thing, specifically as rhetoric meets reality.

In the documentary, one particular person (a guy with a down syndrome son) demonstrated how this oddness plays out on the personal level. He was one of those who never thought it would happen to him. It was clear that he was deeply ashamed. He said that a grown man in his fifties shouldn’t have to ask his father to pay the electricity bill. How I interpreted this was that he thought a mature adult should be an autonomous individual who is dependent on no one, not even on the closest of family during the most difficult of times.

What seems most odd about this is the simple truth that we all are interdependent on one another. It’s just a fact of reality, not something to be ashamed of. The entire planet is one big interdependent biosphere and humans are the most socially interdependent of any of the species. We humans will deny our interdependency to our own peril.

It has been said, “No man is an island.” Well, I’d say that a self-made man is a mystical beast living on an imaginary island. Even the fairies in fairyland have a hard time believing such a thing could exist.

It’s not just that behind every successful man there is a woman or vice versa. Behind every successful man, there is any number of things: a healthy community, well off social connections, a privileged childhood, etc. The strongest determinant of wealth in America right now, as was mentioned in the documentary, is growing up with wealthy parents. This is to say that most wealthy Americans inherited their wealth and/or the conditions of their wealth, rather than having earned it through hardwork and merit alone.

This isn’t the American Dream. We’ve been sold a bill of goods. Or to put it into Gilded Age terms, we’ve been railroaded. Plutocray has been the dream of rich white men for centuries, most of the founding fathers included, but plutocracy has been the nightmare of average Americans since at least when George Washington violently put down the first populist revolt.

With the plutocratic rhetoric of meritocracy, one of the great boogeymen is the welfare queen. It took corporate propaganda sold by an actor-trained president to convincingly sell this hatred of the poor, presented with a kindly-looking smile, but sold it was. In the standard narrative, the welfare queen is a poor black woman (the antithesis to the rich white man) who out of wedlock pumped out the children (slut) to get free government money (whore) so as not to have to do honest work (lazy) and so as to live the high life driving expensive cars (leech).

The poor black woman was the target of rich white men’s lust during the slave era, but now that she is free who knows what she will do in retribution for the sins of the rich white men’s fathers. Although a demented dark fantasy, it does have its own internal logic of sorts, not unlike the logic of portraying Obama as his father’s son come from dark Africa to seek his anti-colonial vengeance upon white man’s Western society. It sounds like a Hollywood blockbuster.

Fearmongering aside, who are the real welfare queens?

A welfare queen takes more than gives, especially those who assume benefits as privileges without attendant social responsibilities. This is anyone who personally benefits from publicly-funded services and whose lifestyle is dependent upon publicly-funded support. This is anyone who accepts any kind of community offering or public good, including public resources taken from the commons, without reciprocation and fairness. This is anyone who takes more than they need when others have greater need, anyone who takes advantage of those less powerful and less fortunate, and anyone who disregards precautions about and investments toward the long-term sustainability of society and the impact on future generations. A welfare queen is defined by their selfishness, greed, and sociopathy.

It is clear that I’ve just described the prototypical modern big business. Nothing surprising about that.  American Winter briefly touches upon an aspect of this, although all too briefly.

A weird form of corporate welfare has developed. The modern transnational corporation isn’t sustainable itself without massive financial support from public funds. What capitalism has perfected is the externalization of costs.

Without welfare and food stamps, without unemployment benefits and public health services, without  public education and state colleges, there would be no functional workforce that could survive on such low wages as offered to most employees. Governments subsidize corporations by paying for what citizens can’t afford with minimum wage. There is something majorly wrong when many if not most of the people receiving government funds and services are those who are employed, yet don’t make a living wage. And when corporations move factories, they leave behind massive unemployment and poverty that is taken care of by the government.

This is is just one aspect of externalized costs. Other aspects include social destabilization and undermining of local economies, bailouts and subsidies, pollution and environmental degradation,  and selling below the market value of natural resources from public lands, etc.

The majority of United States citizens would quickly descend into third world conditions if not for the government hiding the consequences slowly destroying American democracy and American communities. As Fran Lebowitz explained it, “In the Soviet Union, capitalism triumphed over communism. In this country, capitalism triumphed over democracy.” Or as the Borg put it, “Existence as you know it is over. We will add your biological and technological distinctiveness to our own…”  and “You will be assimilated. Resistance is futile.”

This sad state of affairs demonstrates a rot at the core of capitalism. This is where American Winter fails to meet the problem beyond emotional appeal.

The documentary lacked a coherent and compelling narrative. I wasn’t inspired because there was nothing offered to be inspired toward. The problems were explained with data and real world examples. I was emotionally moved by human struggle and suffering. But then what? Where is the deeper analysis? Where is the vision?

In watching the documentary, I had an almost passive sense about the portrayal of poverty. It felt like a problem that happened by accident, an unintended consequence of focusing on other things such a decreasing federal spending.

In the documentary, people kept saying that such poverty isn’t what it means to be an American and that such downward mobility isn’t what the American Dream is about. That is fine as far as it goes. There was sadness and desperation, but I sensed no deep outrage. The people were worried about their families, but no one spoke about or was asked about their fears for the fate of America as a country, much less concerns for the suffering and poverty all around the world.

If they had used the middle class family as a jumping off point to get to a larger frame, so much more could have been communicated. As it is, the documentary is a lost opportunity. It isn’t particularly memorable. It is like a hundred other documentaries I’ve seen before. Nothing about it stands out and demands attention.

More importantly, I doubt it would be watched by many who aren’t already aware of the problem and persuaded that it is serious. I can hear in my head how conservatives would dismiss or ignore the view presented. Middle class families as a vague general category don’t make for a powerful symbol that can come close to competing against the dark vision of welfare queens driving Cadillacs, a single poignant image lingering in the collective mind for decades that simultaneously imagines the problem for honest tax-paying Americans and imagines how the cause of the problem is destroying America and the American Dream.

I have a soft place in my heart for liberal do-gooders. Nonetheless, the liberal lack of vision and insight ultimately just depresses me. American Winter is good for what it is, but not good enough for what is needed.

 

 

 

America’s Hyper-Individualism: a tale of deception & immorality

American Exceptionalism Subsides
The American-Western European Values Gap

In America, religion is considered important.

However, this religiosity is more about individual salvation than helping those in need.

From this individualistic worldview, Americans believe individuals control their own lives.

This individualism is extended to national isolationism where we believe in only helping our own country.

This individualism goes beyond moral principles and touches on a sense of selfish entitlement to interfere with others, even though we show little desire to actually help them.

American’s love individualism in all forms and have faith that individuals can solve their own problems (a convenient rationalization for a country that causes so much misery around the world and allows so much misery to continue in its own borders). Despite this individualism, actual data shows individual Americans have one of the lowest rates of social mobility in the developed world.