Posts Tagged ‘opportunity’

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It’s impossible to defend the grotesque—and growing—levels of inequality that characterize U.S. capitalism.

But, as they have throughout American history, some people still try. Their most common argument is that there’s nothing wrong with unequal outcomes as long as there is equal opportunity.*

Hmmm, not so much.

A recent study by a team of researchers led by Stanford economist Raj Chetty (pdf)—summarized and analyzed by Ben Casselman and Andrew Flowers—confirms that “where you come from. . .plays a major role in determining where you will end up later in life.”

Your starting point determines, for example (as in the figure above), how likely you are to have a job at age 30. Children from poor families are much less likely to work in adulthood than children from middle-class and upper-class families. Only about 60 percent of children from the poorest families are working at age 30, compared with more than 80 percent of children from higher-income families.

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It also determines your income at the age of 30: there’s a steady increase in income until the top few percentiles of parental income, when it spikes.**

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And, finally, it determines where you end up in the distribution of income (as the chart above measures not dollar incomes, but household income by percentile). Children from the richest 1 percent of families end up being, on average, in about the top third of households at age 30, while children from the poorest 1 percent of families end up in the bottom third at age 30.

It’s clear the United States suffers from an obscenely unequal distribution of income and wealth. It’s also characterized by a profoundly unequal distribution of opportunities.

 

*That line of argument suffers from three main problems: First, it presumes inequality only affects individuals, not society as a whole. In other words, it overlooks the effects of the concentration of income and wealth in the hands of a small group of individuals in terms of their ability to decide what happens not only in their own lives, but in the rest of society. Second, even if perfect mobility existed, making it to the top would still mean there’s a an even larger group at the bottom; that is, the existence of equal opportunity doesn’t undo or overturn the existing class structure. Third, it overlooks the extent to which unequal outcomes actually contribute—via household and neighborhood effects, government policy, education, and so on—to making equal opportunity an even more distant fantasy.

**As Casselman and Flowers explain, “This measures only wage and salary earnings, so it doesn’t factor in any other advantages these young adults might have, such as trust funds, lower student debt, or parental help with housing or other expenses.”

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Americans may not know the exact numbers (e.g., about wealth inequality or the CEO-to-worker pay gap). But, as it turns out, they’re very clear that their country is characterized by declining opportunity and growing inequality.

According to a new survey by the Public Religion Research Institute,

Americans across the political spectrum and from all walks of life are deeply concerned that the American economic system is not fair. What’s more, concerns about the fairness of the economic system have increased significantly over the past year.

For example, nearly two-thirds (65 percent) of Americans believe that “one of the big problems in this country is that we don’t give everyone an equal chance in life,” while fewer than three in ten (28 percent) believe that “it is not really that big a problem if some people have more of a chance in life than others.” Concerns about the lack of equal opportunity have increased considerably since 2010, when 53 percent said that one of the big problems in the United States was the lack of equal opportunities for all.

Here are some of the other findings in the survey:

There is widespread agreement that the current economic system is heavily tilted in favor of the wealthy. Nearly eight in ten (79%) Americans agree that the economic system unfairly favors the wealthy, compared to roughly one in five (21%) who disagree. Current views represent an increase of 13 percentage points from 2012, when 66% of Americans agreed.

negative feelings toward large business corporations in the U.S. have also increased in recent years. Eighty-four percent of Americans agree that business corporations do not share enough of their success with their employees, compared to 15% who disagree. These negative views are up 15 percentage points from the previous year, when 69% of the public agreed that American businesses were not sharing enough of their profits with their workers. There is broad agreement with this assessment across a range of demographic groups.

The public today remains less confident that hard work is the key to economic success. Nearly two-thirds (64%) of Americans agree that hard work is no guarantee of success, while more than one-third (35%) disagree. Current sentiments represent a 10-point increase since 2013, when 54% of Americans agreed with this statement.

More than three-quarters (76%) of the public supports raising the minimum wage from $7.25 to $10.10 per hour. Support has ticked up slightly since last year, when 69% of Americans expressed support for raising the minimum wage to $10.10 per hour.

Americans overwhelmingly support requiring companies to provide all full-time employees with paid sick days if they or an immediate family member gets sick, and requiring companies to provide all full-time employees with paid leave for the birth or adoption of a child. Eighty-five percent of Americans favor paid sick leave and 82% support paid parental leave.

Americans correctly understand that both declining opportunity and increasing inequality are significant problems in their country.

The question now is, what are they going to do about it?

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