As economist David Henderson says, the report “always shows that there is mobility between income categories, even in the short run, and that poverty is temporary for most people in America who experience it. Virtually all reporters ignore it.”
First, the bad news. The report reveals that during the 4-year period from 2009 to 2012, more than one out of three Americans (34.5 percent) had at least one spell of poverty lasting 2 or more months.
But the good news is that few people stayed in poverty all four years. Chronic poverty from 2009 to 2012 was relatively uncommon, with 2.7 percent of the population living in poverty all 48 months. (more…)
One of the most important socio-economic factors in America is social mobility, the ability of an individual or family to improve (or lower) their economic status. And one of the major factors in increasing social mobility is to simply increase mobility. For example, if you have to walk to work, you are limited to jobs within a few miles of your home. But if you can drive to work, the number of job opportunities available to you may increase considerably.
Most of us who have access to individual means of transportation take that connection for granted. But for the working poor, a car may not only help them get to a place of employment, it can help them drive away from poverty. For instance, a recent study finds that for low-income residents of high-poverty neighborhoods, having access to an automobile can lead to greater economic opportunities: (more…)
There is a lot of talk about “privilege” in our nation: white privilege, the privilege of the “1%,” privilege of living in one school district versus another. Yet, the greatest “privilege” in America is hardly ever mentioned. It’s a privilege that creates happy, healthy, smart kids, a privilege that helps ensure economic stability for everyone involved, a privilege that keeps our neighborhoods and cities safer and more productive.
It’s marriage. (I was going to say “mah-widge” and give a Princess Bride reference, but I’ll skip that.)
In yesterday’s National Review, writers Lee Habeeb and Mike Leven call the results of the “marriage privilege” startling:
In a report last year entitled “Saving Horatio Alger,” which focused on social mobility and class in America, Richard Reeves of the Brookings Institution discovered that the likelihood of a child raised by parents born into the lowest income quintile moving to the top quintile by the age 40 was a disastrous 3 percent. Worse, 50 percent of those children stay stuck in the bottom quintile. And the outlook for the children of those marriage-less children is equally stark.
That’s bad news for the country, and the American dream, such numbers. (more…)
One of the most important important socio-economic factors in America is also one of the least talked about: social mobility.
Social mobility is the ability of an individual or family to improve (or lower) their economic status. The two main types of social mobility are intergenerational (i.e., a person is better off than their parents or grandparents) or intragenerational (i.e., income changes within a person or group’s lifetime). While there is no truly adequate gauge to measure such opportunities, we can get a fair estimate based on measurements of social mobility.
“Can you explain that important economic concept using Legos?”
Apparently, someone must have said that to Richard Reeves, an economist at the Brookings Institution economist, because he’s made a brief video using Legos to visualize social mobility.
There are two reasons I really appreciate this video. First, I love to see important economic issues explained in an accessible and entertaining manner. Second, as I’ve repeatedly said to anyone who will listen, social mobility — specifically getting people out of poverty — is infinitely more important than focusing income inequality, a topic that gets far too much attention nowadays.
The one drawback to the video is that it’s far too pessimistic. Yes, social mobility is still a huge problem. But the video makes clear, that social mobility is possible for almost all people. That has not been true for most of human history and it is not true in most parts of the world today.
Also, I am far less concerned with whether a person can go from the bottom quintile to the top as I am with going from the bottom quintile to the middle. Like many Americans, I was born in the bottom quintile and worked my way to the middle quintiles. The fact that I’m unlikely to ever join the top quintile is of absolutely no importance to may life. None at all. What we should care about is whether people can get out of poverty and flourish economically, not whether they can join Beyonce and Jay-Z in the billionaire’s club.
But those quibbles aside, I’m grateful this video is helping to spread the message about the importance of social mobility.
Earlier this year I wrote a series of posts explaining 12 principles that generally drive the thinking of conservative evangelicals when it comes to economics. Number 9 on my list was:
9. Social mobility — specifically getting people out of poverty — is infinitely more important than income inequality.
Social mobility is the ability of an individual or family to improve (or lower) their economic status. The two main types of social mobility are intergenerational (i.e., a person is better off than their parents or grandparents) or intragenerational (i.e., income changes within a person or group’s lifetime). Researchers at Harvard University recently released a study of intergenerational social mobility within the United States which controlled for five factors: racial segregation, income inequality, school quality, social capital, and family structure.
Can you guess which factor makes the most difference for social mobility? (more…)
“It’s helpful to look at the track record of this bipartisan idea that government is smarter and better at picking winners and losers in the marketplace,” said House Budget Committee Chairman Paul Ryan at a recent hearing on efforts to combat cronyism and promote upward mobility. “What we have learned from this bipartisan approach is that corruption does occur, cronyism does occur, and what ends up happening is those who are connected, those who have established connections, those who know the ways of Washington end up usually getting the benefits.” (more…)