Class and mobility

Posted: 18 January 2012 in Uncategorized
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Why do mainstream economists think that, if there’s mobility, then somehow class doesn’t exist?

Alan Krueger has created a bit of a kerfuffle by invoking the Gatsby Curve in his recent speech on inequality. The idea (discussed in more detail and defended by Miles Corak, and attacked by Scott Winship) is that more inequality now will lead to less generational mobility in the future. Here’s Krueger:

The fortunes of one’s parents seem to matter increasingly in American society.

Children of wealthy parents already have much more access to opportunities to succeed than children of poor families, and this is likely to be increasingly the case in the future unless we take steps to ensure that all children have access to quality education, health care, a safe environment and other opportunities that are necessary to have a fair shot at economic success.

Adam Davidson invokes a different kind of mobility—the ability to move where new jobs exist—as the key to economic success.

The U.S. has always been a remarkably itinerant country, but new data from the Census Bureau indicate that mobility has reached its lowest level in recorded history. Sure, some people are stuck in homes valued at less than their mortgages, but many young people — who don’t own homes and don’t yet have families — are staying put, too. This suggests, among other things, that people aren’t packing up for new economic opportunities the way they used to. Rather than dividing the country into the 1 percenters versus everyone else, the split in our economy is really between two other classes: the mobile and immobile.

In both cases, the presumption seems to be that, if there is considerable mobility—within and between generations, and across the country—then somehow classes and class differences no longer matter.

But the idea of mobility presumes that there is a class structure. And even if some people, within or across generations, are able to move from one class position to another, that doesn’t change the structure of classes one bit. There will still be those who create a surplus, and others who either appropriate and/or receive a cut of the surplus. Over time, those positions may be occupied by the same people and their offspring (if there’s no mobility) or by different people and their offspring (if there is mobility).

The ability to move from one social or geographical location to another doesn’t eliminate class. All the focus on mobility does is give mainstream economists one more reason to forget about the significance of classes within contemporary capitalism.

  1. Magpie says:

    I see this a little differently. It’s true that the discussion on income/wealth mobility has the potential to cover the class structure.

    People like Winship (a third-way, Clintonite “progressive”) have a chip in their shoulders: inequality increased as much during the Clinton era as it did during the two Bushes’. That doesn’t sound good.

    So, what to do? Winshp’s way around this is to state that, “Well, inequality did increase, so what? There was generational income mobility”.

    More plainly: Winship (and the openly self-identified right-wing crowd) wants to suggest that the janitors’ kids could reasonably hope to become tycoons, even if Dad and Mum were really poor.

    This is the key: Winship wants to argue that income inequality and intergenerational income mobility are independent.

    The thing, in reality, is that intergenerational income mobility also decreased as income inequality increased: the janitors’ kids cannot realistically hope to become tycoons (and the tycoons’ kids won’t be cleaning toilets any time soon), whatever Winship believes.

    That is, intergenerational income mobility is not independent from income inequality. Which, if one thinks about it, makes good sense.

    Just have a look at the chart Katherine Rampell (NY Times) published last year with this piece: Why So Many Rich People Don’t Feel Very Rich.

    If you are on the extreme left on the horizontal axis, doubling your income barely moves you in the vertical axis. You may be promoted from janitor to bus driver, but there is no way in hell you are going to become Bill Gates.

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