Equality, Opportunity, and the American Dream

Equal opportunity must and will remain the quintessential American ideal. The challenge is to live up to it.

READING, PA - OCTOBER 20: Isaac James, who cant find a job, eats lunch at the Central Park United Methodist Church which has a soup kitchen and food pantry on October 20, 2011 in Reading, Pennsylvania. The church feeds thousands of needy Reading residents monthly and relies on donations and volunteers to keep its increasingly popular programs operating. Reading, a city that once boasted numerous industries and the nation's largest railroad company, has recently been named America's poorest city with residents over 65,000. According to new census data, 41.3 percent of people live below the poverty line in Reading. Reading has about 90,000 residents, many of whom are recent Hispanic arrivals who have moved from larger eastern cities over the past decade. While a manufacturing base offering well paying jobs still exists in Reading, many companies like Hershey, Stanley Tool and Dana Systems have either moved elsewhere in the United States or to Mexico in search of cheaper labor. The number of people living in poverty in America, 46.2 million, is now at its highest level for the 52 years the Census Bureau has been keeping records.
National Journal
Richard V. Reeves
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Richard V. Reeves
Aug. 20, 2014, 1 a.m.

Richard V. Reeves is a fel­low at Brook­ings, where his re­search in­terests in­clude is­sues re­lated to so­cial mo­bil­ity, fam­il­ies and par­ent­ing, and in­equal­ity. Pri­or to his Brook­ings ap­point­ment, he was dir­ect­or of strategy to the UK’s Deputy Prime Min­is­ter; dir­ect­or of Demos, the Lon­don-based polit­ic­al think-tank; and so­cial af­fairs ed­it­or of The Ob­serv­er news­pa­per. Richard is also ed­it­or-in-chief of So­cial Mo­bil­ity Memos, a Brook­ings blog.

On a warm spring even­ing in Wash­ing­ton, D.C., a fleet of lim­ousines and town cars de­livered hun­dreds of guests, be­decked in black tie and long gowns, to a gala cel­eb­ra­tion of the Amer­ic­an Dream: the an­nu­al awards night for the Hor­a­tio Al­ger As­so­ci­ation of Dis­tin­guished Amer­ic­ans.

Twelve new mem­bers (11 men, one wo­man) were honored for hav­ing ris­en from child­hood poverty to po­s­i­tions as cap­tains of com­merce or cel­eb­rated pub­lic ser­vants. Colin Pow­ell, a 1991 award re­cip­i­ent, was among those in the audi­ence. The new mem­bers’ speeches were brief, strik­ing a bal­ance between pride and hu­mil­ity, and all hew­ing to the rags-to-riches theme: “Who would have thought that I, from a farm in Min­nesota/small town in Kan­sas/Little Rock, raised in an orphan­age/with no in­door plumb­ing/work­ing mul­tiple jobs at 16, would end up run­ning a $6 bil­lion firm/a U.S. am­bas­sad­or/em­ploy­ing 10,000 people. Only in Amer­ica!”

The cli­max of the even­ing came with the ar­rival on stage of more than 100 stu­dents from poor and troubled back­grounds to whom the So­ci­ety had awar­ded col­lege schol­ar­ships, an an­nu­al rite that over the years has dis­trib­uted more than $100 mil­lion to de­serving young people. Tom Sel­leck read to the 2014 schol­ars an in­spir­a­tion­al pas­sage of po­etry from Car­ol Sap­in Gold (“The per­son who risks noth­ing does noth­ing, has noth­ing and is noth­ing “¦”) and the Ten­ors sang “Forever Young” as a gi­ant Amer­ic­an flag was slowly un­furled from the ceil­ing. The ce­re­mony had the feel of an act of wor­ship and thanks­giv­ing be­fore the al­tar of the so­ci­ety’s name­sake. It was a genu­inely mov­ing ex­per­i­ence, even for me — and I’m a Brit.

Vivid stor­ies of those who over­come the obstacles of poverty to achieve suc­cess are all the more im­press­ive be­cause they are so much the ex­cep­tions to the rule. Con­trary to the Hor­a­tio Al­ger myth, so­cial mo­bil­ity rates in the United States are lower than in most of Europe. There are forces at work in Amer­ica now — forces re­lated not just to in­come and wealth but also to fam­ily struc­ture and edu­ca­tion — that put the coun­try at risk of cre­at­ing an os­si­fied, self-per­petu­at­ing class struc­ture, with dis­astrous im­plic­a­tions for op­por­tun­ity and, by ex­ten­sion, for the very idea of Amer­ica.

Many coun­tries sup­port the idea of mer­ito­cracy, but only in Amer­ica is equal­ity of op­por­tun­ity a vir­tu­al na­tion­al re­li­gion, re­con­cil­ing in­di­vidu­al liberty — the free­dom to get ahead and “make something of your­self” — with so­ci­et­al equal­ity. It is a philo­sophy of egal­it­ari­an in­di­vidu­al­ism. The meas­ure of Amer­ic­an equal­ity is not the in­come gap between the poor and the rich, but the chance to trade places.

In his second in­aug­ur­al ad­dress in 2013, Barack Obama de­clared: “We are true to our creed when a little girl born in­to the bleak­est poverty knows that she has the same chance to suc­ceed as any­body else, be­cause she is an Amer­ic­an; she is free, and she is equal, not just in the eyes of God but also in our own.”

Pres­id­ent Obama was not say­ing that every little girl does have that chance, but that she should. The mor­al claim that each in­di­vidu­al has the right to suc­ceed is im­pli­cit in our “creed,” the De­clar­a­tion of In­de­pend­ence, when it pro­claims “All men are cre­ated equal.” In his first draft of that his­tor­ic doc­u­ment, Thomas Jef­fer­son was more ex­pans­ive, writ­ing that all were cre­ated “equal and in­de­pend­ent.” Al­though the word was ed­ited out, the sen­ti­ment was not.

The De­clar­a­tion was a state­ment about the re­la­tion­ship between the United States and Great Bri­tain, but it was also a state­ment about Amer­ic­ans them­selves. The United States was to be a self-made na­tion com­prised of self-made men. Alex­is de Toc­queville — the first of many clev­er French­men to wow the Amer­ic­an read­ing classes — suf­fused his Demo­cracy in Amer­ica with ad­mir­a­tion of the young na­tion’s “manly and le­git­im­ate pas­sion for equal­ity,” while Ab­ra­ham Lin­coln ex­tolled his coun­try­men’s “geni­us for in­de­pend­ence.”

There is a simple for­mula here — equal­ity plus in­de­pend­ence adds up to the prom­ise of up­ward mo­bil­ity — which cre­ates an ap­peal­ing im­age: the na­tion’s so­cial, polit­ic­al, and eco­nom­ic land­scape as a vast, level play­ing field upon which all in­di­vidu­als can ex­er­cise their free­dom to suc­ceed. Hence the tod­dlers who show up at day­care cen­ters in T-shirts em­blazoned “Fu­ture Pres­id­ent.” Hence Amer­ic­ans’ cul­ture of com­pet­it­ive­ness, their ob­ses­sion with sports, their fre­quent and all-pur­pose ref­er­ences to “the rules of the game” and to “fair­ness.” Hence the pat­ri­ot­ism-tinged pride of the suc­cess­ful, ex­ult­ing not only in their own grit and prowess, but also in the mer­ito­crat­ic sys­tem that gave them scope and op­por­tun­ity.

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Al­ger-style up­ward mo­bil­ity has al­ways con­tained at least an ele­ment of myth, of course, and the myth­maker him­self, Hor­a­tio Al­ger, would al­most cer­tainly not have won an award from the so­ci­ety named after him. Al­ger was born in 1832 in­to the mod­est, com­fort­able home of his Unit­ari­an min­is­ter fath­er in Chelsea, Mas­sachu­setts, and died in the mod­est, com­fort­able home of his sis­ter, 20 miles away in South Nat­ick. Al­though he en­joyed con­sid­er­able suc­cess with some of his chil­dren’s books, for the most part he made a barely ad­equate liv­ing from writ­ing, and had to sup­ple­ment his in­come with tu­tor­ing. Al­ger’s own life, then, neither star­ted in rags nor ended in riches.

But it is the stor­ies he wrote that mat­ter, and these ul­ti­mately sold hun­dreds of mil­lions of cop­ies around the world, the largest num­ber by far in his own coun­try, pre­cisely be­cause they so vividly em­bod­ied the na­tion­al creed. A cen­tury after his death in 1899, he still ranked as the fifth best-selling au­thor in U.S. his­tory.

Al­ger’s most fam­ous book, Ragged Dick — Or, Street Life in New York With the Boot-Blacks, was pub­lished in 1868. Its shoe­shine boy hero is be­friended by Mr. Whit­ney, a kindly pat­ron who ut­ters the ma­gic words: “In this free coun­try poverty in early life is no bar to a man’s ad­vance­ment. “¦ Save your money, my lad, buy books, and de­term­ine to be some­body,” thus in­spir­ing Dick to be­have in a man­ner that ul­ti­mately res­ults in his be­com­ing Richard Hunter, Esq., a pros­per­ous mer­chant. All Al­ger’s books have sim­il­ar themes — boys of good mor­al char­ac­ter who work hard and do right, find a pat­ron will­ing to help them (there is al­ways an ele­ment of luck in the tales), and even­tu­ally es­cape their poverty-stricken ori­gins.

Al­ger’s ideal has faced crit­ics from the very be­gin­ning. In 1875 Mark Twain pub­lished “The Story of the Good Little Boy,” a short but with­er­ing par­ody of Ragged Dick. Twain’s hero, Jac­ob Blivens, em­bod­ies all the fabled Hor­a­tio Al­ger vir­tues: “he al­ways obeyed his par­ents “¦ he al­ways learned his book, and nev­er was late at Sab­bath-school.” But Blivens comes to a tra­gic end in an ex­plo­sion at an iron foundry. “Thus per­ished the good little boy who did the best he could,” con­cluded Twain, his sar­casm squarely aimed at Al­ger, “but didn’t come out ac­cord­ing to the books. Every boy who ever did as he did prospered ex­cept him. His case is truly re­mark­able.”

In 1888, Al­ger’s fel­low Mas­sachu­setts writer Ed­ward Bel­lamy moun­ted a more ser­i­ous chal­lenge to the boot­straps ideal in his best­selling nov­el Look­ing Back­ward: 2000-1887 — a trick title, since Bel­lamy was de­scrib­ing a pos­sible fu­ture. The nov­el’s Rip Van Winkle-ish nar­rat­or is look­ing back on the 20th cen­tury from the vant­age of the year 2000, after the United States has made a peace­ful trans­ition to a cent­rally planned, so­cial­ist so­ci­ety. In­come is di­vided equally among cit­izens by means of what Bel­lamy called “cred­it cards,” each with the same value and lim­it.

The book was a sen­sa­tion. In 1900, two years after Bel­lamy’s death and 12 years after the book’s pub­lic­a­tion, it was still num­ber three on the charts, trail­ing only Ben-Hur and Uncle Tom’s Cab­in. Yet, un­like Al­ger’s, Bel­lamy’s name and work have long since passed out of na­tion­al con­scious­ness.

Bel­lamy was by far the bet­ter writer, but his polit­ic­al philo­sophy was ali­en to the Amer­ic­an spir­it. He en­vi­sioned a so­cial­ist uto­pia marked by per­fect egal­it­ari­an­ism. Not sur­pris­ingly, his book was a run­away suc­cess in Europe. Al­ger, by con­trast, had a philo­sophy closer to clas­sic­al lib­er­al­ism, and would have wanted each and every cit­izen in the year 2000 to have the com­bin­a­tion of free­dom, in­de­pend­ence, and op­por­tun­ity to qual­i­fy for a very dif­fer­ent sort of cred­it card — the plat­in­um and black ones is­sued by Amer­ic­an Ex­press.

Though Hor­a­tio Al­ger’s own life did not fol­low the rags-to-riches script, it was al­most cer­tainly dur­ing his life­time that his storylines came closest to mir­ror­ing real life for many. In the 19th cen­tury, the United States pulled im­mig­rants in, pushed its bor­ders out, and al­lowed men with sharp el­bows and big am­bi­tions to make for­tunes, vast and fast.

Op­por­tun­it­ies to move up in what was still the New World were great­er, per­haps, than in any oth­er so­ci­ety at any oth­er peri­od in his­tory. The rob­ber bar­ons — An­drew Mel­lon, John D. Rock­e­feller, Henry Clay Frick, Cor­neli­us Vander­bilt, and An­drew Carne­gie — were all men who made the most of the un­reg­u­lated, boom­ing eco­nomy to amass huge wealth, hav­ing star­ted with little more than their wits.

Two factors, already em­bed­ded deep in the na­tion’s psyche, were driv­ing up­ward mo­bil­ity: school­ing and mov­ing. From its very be­gin­nings the U.S. was un­sur­passed among na­tions in its zeal for edu­ca­tion. Steeped in the val­ues of the Scot­tish En­light­en­ment, the Founders were pas­sion­ately com­mit­ted to school­ing, one of the great en­gines of so­cial and eco­nom­ic ad­vance­ment. Jef­fer­son was so proud of his brainchild, the Uni­versity of Vir­gin­ia, that he in­struc­ted that his role as “Fath­er” of that in­sti­tu­tion be in­scribed on his tomb­stone as one of his three sig­nal ac­com­plish­ments — along with “Au­thor of the De­clar­a­tion of Amer­ic­an In­de­pend­ence.” As early as 1850, two-thirds of Amer­ic­an chil­dren between five and 14 were in school (two-thirds of white chil­dren, it should be said), while back in Eng­land and Wales the pro­por­tion was only half. High­er edu­ca­tion was slower to de­vel­op — in 1860 there were just 381 col­leges in the United States — but with the ad­vent of land-grant col­leges, the U.S. quickly over­took the U.K. on this front, too. There are now over 7,000 post-sec­ond­ary in­sti­tu­tions in the United States.

Amer­ic­ans’ up­ward mo­bil­ity was due also to their be­ing, lit­er­ally, a people on the move. In just a single dec­ade, the 1870s, half of all white Amer­ic­an men un­der the age of 30 moved from one county to an­oth­er. A quarter moved to a dif­fer­ent state. Obey­ing Hor­ace Gree­ley’s in­junc­tion to “Go West, young man,” am­bi­tious and en­tre­pren­eur­i­al cit­izens were in per­petu­al mo­tion, usu­ally to find work or claim some land to farm. The easy avail­ab­il­ity of land in the ever-ex­pand­ing na­tion — its size had in­creased more than four-fold since its found­ing — was key to its be­ing “the land of op­por­tun­ity,” of­fer­ing mil­lions of set­tlers the chance to ac­quire at least some wealth in the form of prop­erty.

The up­wardly mo­bile ty­coons had of course amassed riches vastly great­er in scale, but their money was so new that it had not yet be­gun to ac­cu­mu­late over suc­cess­ive gen­er­a­tions. While wealth in­equal­ity re­mained well be­low European levels, in­come in­equal­ity was rising rap­idly. This dis­tinc­tion between in­come and wealth, all too of­ten lost in de­bate, is im­port­ant. In­come is a “flow” of money, typ­ic­ally from wages; while wealth is a “stock” of money, in prop­erty, shares, or oth­er as­sets. While they ob­vi­ously over­lap, in­equal­it­ies in in­come and wealth in­equal­ity are not the same thing.

In the first half of the 20th cen­tury, after the clos­ing of the fron­ti­er, the rap­id growth of the na­tion slowed, with the res­ult that both in­come and wealth gaps widened to European pro­por­tions, and the en­gines of up­ward mo­bil­ity stalled. With the Great De­pres­sion, Stein­beck’s The Grapes of Wrath sup­planted Al­ger’s Ragged Dick as the em­blem­at­ic story of the times.

Amer­ica’s de­cis­ive role in World War II and its sub­sequent emer­gence as a su­per­power gave rise to the Great Prosper­ity: a new surge of eco­nom­ic en­ergy along­side size­able gov­ern­ment in­vest­ments in in­fra­struc­ture, the mil­it­ary, sci­ence, and So­cial Se­cur­ity, and a re­com­mit­ment to edu­ca­tion, not least through the G.I. Bill. Between 1950 and the mid-1970s, as the U.S. eco­nomy grew by an av­er­age of 4 per­cent a year, the eco­nom­ic ex­pan­sion drove wages and em­ploy­ment up, and in­come and wealth gaps nar­rowed. High taxes — high by his­tor­ic­al stand­ards, any­way — were levied on those with the biggest in­comes and greatest wealth, and the gov­ern­ment provided more ser­vices and cash as­sist­ance to the poor as part of Lyn­don John­son’s vis­ion for the “Great So­ci­ety.” Up­ward mo­bil­ity may not have im­proved; but since stand­ards of liv­ing were rising at about the same rate across the in­come dis­tri­bu­tion, most people were much bet­ter off than their par­ents had been, even if they re­mained on the same rung of the in­come lad­der.

From the mid-1970s on, however, the mass prosper­ity ma­chine began to grind to a halt; pro­ductiv­ity stag­nated and growth slowed as glob­al com­pet­i­tion in­tens­i­fied. In­equal­ity trends re­turned to their pre-war tra­ject­ory, with those on the top rungs climb­ing ever fur­ther up­ward, helped along by Ron­ald Re­agan’s tax cuts, while those at the bot­tom and in the middle lagged be­hind. George H.W. Bush broke his “no new taxes” pledge, but did noth­ing to al­ter the grow­ing fis­sure between the rich and the rest. 

The elec­tion of Barack Obama fleet­ingly signaled a new, more op­tim­ist­ic mood, the prom­ise of a more gen­er­ous, post-par­tis­an polit­ics, and a re­newed com­mit­ment to the up­ward mo­bil­ity Amer­ic­ans be­lieve in so fer­vently. Here was a pres­id­ent whose elec­tion seemed a test­a­ment to Amer­ica’s pro­gress, and whose per­son­al story proved, so it seemed, that the Hor­a­tio Al­ger story could be re­writ­ten for a multi-ra­cial na­tion. The up­lift was short-lived. Today, the na­tion is limp­ing away from the eco­nom­ic car-crash of 2008. Polit­ics re­mains deeply par­tis­an. And yes, mo­bil­ity rates are still flat.

Lack of up­ward mo­bil­ity is sour­ing the na­tion­al mood. As ho­ri­zons shrink, an­ger rises. The polit­ic­al right has done a bet­ter job, so far, of con­vert­ing frus­tra­tion in­to polit­ic­al gain, by suc­cess­fully — if im­plaus­ibly — lay­ing the blame for many of Amer­ica’s woes at the door of “Big Gov­ern­ment.” Much of the polit­ic­al en­ergy on the left has been dir­ec­ted against the highest earners — the top 1 per­cent of the in­come dis­tri­bu­tion. But while Oc­cupy Wall Street gen­er­ated plenty of head­lines, it has pro­duced pre­cious few votes, and only a trivi­al change in the tax sys­tem: since 2013, mar­ried couples mak­ing more than $450,000 a year have had to pay just an ex­tra nick­el of tax on each dol­lar above that level.

The prob­lem is not that the United States is fail­ing to live up to European egal­it­ari­an prin­ciples, which use in­come as a meas­ure of equal­ity. It is that Amer­ica is fail­ing to live up to Amer­ic­an egal­it­ari­an prin­ciples, meas­ured by the prom­ise of equal op­por­tun­ity for all, the idea that every child born in­to poverty can rise to the top.

Take one stand­ard in­dic­at­or of mo­bil­ity: the like­li­hood that chil­dren will, as adults, as­cend to a high­er rung on the in­come lad­der than their par­ents. In a com­pletely mo­bile, flu­id so­ci­ety, a child raised on the bot­tom rung of the in­come lad­der (usu­ally defined as the bot­tom fifth of the dis­tri­bu­tion) would the­or­et­ic­ally have as good a chance as any of mak­ing it to the top, and no great­er risk of re­main­ing trapped at the bot­tom. But the U.S. suf­fers from a high de­gree of in­tergen­er­a­tion­al “stick­i­ness” at the bot­tom of the in­come dis­tri­bu­tion. Chil­dren born on the bot­tom rung have a four in 10 chance of re­main­ing stuck there in adult­hood (between 36 per­cent and 43 per­cent, de­pend­ing on the data­set), and a very slim chance (between 4 per­cent and 10 per­cent) of mak­ing it to the top.

It is not just the fact of be­ing born poor that height­ens the risk of stay­ing poor, but poverty’s bale­ful ac­com­pani­ments — in par­tic­u­lar in­ad­equate edu­ca­tion and fam­ily in­stabil­ity. A child raised by a poor, un­mar­ried moth­er has a 50 per­cent risk of re­main­ing stuck on the bot­tom rung of the lad­der, and just a 5 per­cent chance of mak­ing it to the top. Even cruel­er odds (54 per­cent and 1 per­cent re­spect­ively) face those who fail to com­plete high school.

U.S. up­ward mo­bil­ity per­form­ance looks bad by in­ter­na­tion­al stand­ards, too. In fact, the “Amer­ic­an Dream” looks to be in bet­ter shape north of the bor­der, in Canada. Why? Ex­plan­a­tions in­clude wider dif­fer­ences in school qual­ity with­in the United States, high­er rates of teen preg­nancy, and a big­ger gap in col­lege gradu­ation rates by fam­ily back­ground.

But there is an­oth­er factor, too: ra­cism, past and present. There are stark dif­fer­ences in mo­bil­ity rates for dif­fer­ent ra­cial groups, es­pe­cially between Caucasi­ans and Afric­an-Amer­ic­ans. Half the black chil­dren grow­ing up on the bot­tom rung re­main stuck there as adults (51 per­cent), com­pared to just one in four whites (23 per­cent).

The stain of ra­cism is a stark, de­press­ing re­mind­er of how far short of its found­ing ideals the na­tion still falls. Even with the leg­al scaf­fold­ing of Amer­ic­an ra­cism dis­mantled — and even with an Afric­an-Amer­ic­an in the White House — black chil­dren live in the poorest neigh­bor­hoods and at­tend the worst schools; they have the low­est chance of gradu­at­ing col­lege, and the highest risk of in­car­cer­a­tion.


The race gap is only the most vivid sign that birth is all too of­ten des­tiny in Amer­ica. While Amer­ic­ans have al­ways been his­tor­ic­ally more tol­er­ant of in­come in­equal­ity than their European cous­ins, this was gen­er­ally true either be­cause the av­er­age stand­ard of liv­ing was rising across the board (the “rising tide floats all boats” con­sol­a­tion), or be­cause there was lots of move­ment up and down the in­come lad­der (the “Hor­a­tio Al­ger” ideal), or both. But the U.S. now faces a threefold threat: stag­nant growth in stand­ard of liv­ing, a big gap between the rich and the rest, and low rates of up­ward mo­bil­ity.

For the first time ever, most par­ents in the U.S. think their chil­dren will be worse off than them­selves, ac­cord­ing to polling by the Pew Found­a­tion. Two-thirds of Amer­ic­ans think the gap between the rich and the rest of so­ci­ety has grown in the last dec­ade, and the same pro­por­tion be­lieve gov­ern­ment should do more to close this gap (al­though there are sharp dif­fer­ences of opin­ion between Demo­crat­ic and Re­pub­lic­an voters on this score). Faith in the Hor­a­tio Al­ger ideal re­mains, but has been shaken. Sixty per­cent of Amer­ic­an adults still think “most people who want to get ahead can make it if they are will­ing to work hard,” down from 68 per­cent in 1994.

Op­tim­ism about Amer­ic­an op­por­tun­ity may fade fur­ther as mer­ito­cracy comes un­der pres­sure from two sides: a grow­ing eco­nom­ic di­vide between earned in­come and in­her­ited wealth; and a grow­ing so­cial di­vide, marked by dif­fer­ences in fam­ily struc­ture, edu­ca­tion, and com­munity.

From the ban­ners of the short-lived Oc­cupy move­ment to the data tables of count­less eco­nom­ic stud­ies, the mes­sage is clear: Amer­ica’s rich are not just get­ting rich­er, they are get­ting much rich­er. This holds true for both in­come and — more troub­ling for op­por­tun­ity — wealth.

First, in­come: the gap between those at the very top and the rest is widen­ing. Not be­cause or­din­ary Amer­ic­ans are get­ting poorer — al­though some of the wilder rhet­or­ic on the polit­ic­al left would have us be­lieve so. But if gov­ern­ment taxes and pay­ments are taken in­to ac­count, in­comes have ac­tu­ally been rising at the bot­tom and in the middle of the U.S. in­come dis­tri­bu­tion — they’ve just been rising much more slowly than at the top, in stark con­trast to the “all-boats-rising” post­war years. Real in­comes for the top 1 per­cent of house­holds have tripled since 1979, com­pared to a rise of 50 per­cent for the bot­tom fifth and just 36 per­cent for those in the middle.

The United States is hardly alone in this re­spect. Sim­il­ar pat­terns can be seen in vir­tu­ally every ad­vanced eco­nomy. The U.S. non­ethe­less has high­er levels of in­come in­equal­ity than most com­par­able na­tions. Un­til re­cently, the gap between rich and poor has been widely ac­cep­ted on the grounds that it is bridge­able (“Ragged Dick did it, so can I”). But at a cer­tain point, the widen­ing in­come gap may in and of it­self make up­ward mo­bil­ity harder. As Isa­bel Sawhill sug­gests, it may simply be harder to climb a lad­der when the rungs are farther apart. It’s also true that money can be con­ver­ted in­to ex­per­i­ences and ad­vant­ages — like edu­ca­tion, med­ic­al care, a healthy diet, and the time and en­ergy that par­ents have to de­vote to their chil­dren — that fur­ther widen the mo­bil­ity gap between the haves and the have-nots.

While in­come is the star of the in­equal­ity show, grabbing most of the at­ten­tion and head­lines, the gap that mat­ters even more for mo­bil­ity may turn out to be the one in wealth — and not just any wealth, but in­her­ited wealth. Wealth gaps are already very much high­er than in­come gaps. The top 1 per­cent takes twice as large a share of the na­tion­al wealth as of na­tion­al in­come. The danger is that these wealth gaps will get even lar­ger in the years ahead.

Enter, 180 years after Toc­queville, an­oth­er French­man to hold up a mir­ror to Amer­ica: Thomas Piketty. What he shows us in his widely ac­claimed Cap­it­al in the Twenty-First Cen­tury is not as flat­ter­ing as Demo­cracy in Amer­ica. The U.S. edi­tion of his book might as well be titled In­equal­ity in Amer­ica. Al­though the prob­lem Piketty de­scribes is glob­al, it is a par­tic­u­lar threat to Amer­ica’s egal­it­ari­an in­di­vidu­al­ist eth­os. Piketty is primar­ily con­cerned not with levels of in­equal­ity, but with “a rad­ic­ally new struc­ture of in­equal­ity,” one based on wealth from in­her­it­ance. If this is al­lowed to con­tin­ue, he says, the res­ult will be a “pat­ri­mo­ni­al so­ci­ety,” in which wealth is passed on in ways that per­petu­ate the status quo over mul­tiple gen­er­a­tions. In short, most of the rich will con­sist not of those who pulled them­selves up by their boot­straps but of those born in­to sky-high prosper­ity, who will have ad­vant­ages al­low­ing them to mul­tiply their wealth, which, when passed down to their chil­dren, will con­tin­ue to mul­tiply, and so on — and on, and on.

Mean­while, the bulk of the pop­u­la­tion, hav­ing little or no wealth, will have ever few­er chances to climb the lad­der. De­pend­ent on in­come, of­ten from jobs that are tran­si­ent, they are likely to spend most or all of what they earn, be­cause there’s not much of it to be­gin with and they need it to provide for day-to-day life. On best es­tim­ates, wages for full-time work­ers at the ex­act mid-point of the earn­ings dis­tri­bu­tion rose by around 9 per­cent between 1979 and 2007, just be­fore the Great Re­ces­sion hit. Not noth­ing; but not so good, either, giv­en that the eco­nomy as a whole doubled in size over the same peri­od. Partly this is be­cause those at the top are get­ting a big­ger slice of the wage pie; but it is also be­cause a lar­ger share of the na­tion’s eco­nom­ic out­put is go­ing to cap­it­al, rather than to wages, in the first place. In 2000, the share of na­tion­al in­come flow­ing to work­ers (to be pre­cise, “non­farm busi­ness in­come”) was 63 per­cent; as of last year, that fig­ure had fallen to 57 per­cent. That may not sound like a lot, but in his­tor­ic­al terms, it rep­res­ents a huge drop, equi­val­ent to around $750 bil­lion in “lost” wages. The two factors prop­ping up house­hold in­come for av­er­age Amer­ic­ans dur­ing these dec­ades of slow wage growth have been work­ing moth­ers, whose num­bers have ex­ploded, and help from Uncle Sam — yes, “Big Gov­ern­ment”! — in the shape of tax cred­its and tax cuts.

The eco­nomy is go­ing to grow, that’s cer­tain. Even the cau­tious Con­gres­sion­al Budget Of­fice thinks the U.S. eco­nomy will be a third big­ger by 2024. The ques­tion is how far that will trans­late in­to big­ger wage pack­ets — and for whom. “Eco­nom­ic growth,” writes lib­er­al eco­nom­ist Jared Bern­stein, “has be­come a spec­tat­or sport for too many poor and middle-class house­holds.”

Many na­tions are see­ing the con­nec­tion between growth and wages loosen, es­pe­cially for those around the middle of the in­come dis­tri­bu­tion. But it is par­tic­u­larly troub­ling here, be­cause the idea of work­ing for a liv­ing oc­cu­pies such a cent­ral place in the ideo­logy of Amer­ic­an­ism. Al­ger’s her­oes don’t win the lot­tery: they work. Moreover, if wealth in­equal­ity grows un­checked, as Piketty pre­dicts, and wages re­main re­l­at­ively stag­nant, it is hard to see how any­thing ap­proach­ing equal­ity of op­por­tun­ity can be achieved.

And there is a second ser­i­ous threat to mer­ito­cracy: the grow­ing class di­vi­sions that af­fect fam­ily, edu­ca­tion, and com­munity.

The Amer­ic­an ideal of equal­ity is based on the no­tion of equal mor­al worth, of an es­sen­tial same­ness among people (we are all semblables, in Toc­queville’s terms). The ideal re­tains some force, which is why as­pir­ing politi­cians are so of­ten ob­liged to ad­opt an “every­man” per­sona, stress­ing their sim­il­ar­ity to or­din­ary Amer­ic­ans in terms of leis­ure pur­suits, dress, and vocab­u­lary. It is of course an ex­er­cise in false nos­tal­gia to ima­gine that once upon a time every­body ate the same food, drank the same drinks, learned the same things in school, and raised their kids the same way. But dif­fer­ences seem great­er today, and not just in terms of how people make their liv­ing, but how they live.

There is now, for ex­ample, no such thing as “The Amer­ic­an Fam­ily.” The 1950s sit­com mod­el of fam­ily life, as em­bod­ied in Leave it to Beaver, was al­ways a semi-fic­tion; but it had a cul­tur­al pre-em­in­ence that has now been en­tirely lost, giv­ing way to a much more com­plic­ated kal­eido­scope of fam­ily struc­tures, in­clud­ing single par­ents, same-sex couples, child­less (or “child­free”) couples, and co­hab­it­at­ing par­ents. With these changes, par­tic­u­larly the in­crease in single par­ent­hood, has come a new prob­lem: pat­terns of fam­ily form­a­tion are di­ver­ging along the same lines as in­come and edu­ca­tion, ac­cen­tu­at­ing in­equal­ity of op­por­tun­ity. Isa­bel Sawhill has iden­ti­fied the source of the prob­lem, not­ing in her forth­com­ing book, Gen­er­a­tion Un­bound: Drift­ing in­to Sex and Par­ent­hood without Mar­riage, that “fam­ily form­a­tion is a new fault line in the Amer­ic­an class struc­ture.”

The pro­por­tion of chil­dren be­ing raised by a single par­ent has more than doubled in the last four dec­ades, and most of the growth rate is among those who are poorer and less edu­cated. Un­in­ten­ded preg­nancy rates are high. More par­ents have mul­tiple re­la­tion­ships while rais­ing their chil­dren, a trend the so­ci­olo­gist An­drew Cher­lin de­scribes as a “Mar­riage-go-Round.”

These dif­fer­ences in fam­ily form­a­tion pat­terns are re­in­forced by “as­sort­at­ive mat­ing,” a stun­ningly un­ro­mantic term for the nat­ur­al tend­ency of people to form re­la­tion­ships and have chil­dren with people like them­selves. Col­lege grads marry col­lege grads — and now there are of course many more fe­male col­lege grads around to marry. On­line dat­ing has just ad­ded al­gorithms to the pro­cess.

All this mat­ters be­cause fam­ily struc­ture im­pacts on so­cial mo­bil­ity. Even the finest pub­lic school sys­tem in the world would be un­able to com­pensate chil­dren for what No­bel laur­eate James Heck­man calls the “biggest mar­ket fail­ure of all” — choos­ing the wrong par­ents. Par­ents with col­lege de­grees have few­er chil­dren, later in life, and after mar­riage. And they are high-in­vest­ment par­ents, spend­ing gen­er­ous amounts of time, en­ergy, and money on their off­spring. Class gaps in terms of par­ent­ing are not new, of course, but they are widen­ing. In the 1970s, there were no ser­i­ous dif­fer­ences in the amount of time spent with chil­dren by par­ents of dif­fer­ing edu­ca­tion levels. Now there are sig­ni­fic­ant dis­par­it­ies, which have come to be widely re­cog­nized thanks in large meas­ure to the work of Robert Put­nam (of Bowl­ing Alone fame). There is also a gap in terms of how this time is spent — and it turns out that “qual­ity” of time mat­ters as well as quant­ity. Con­ver­sa­tion is one ex­ample: chil­dren in the poorest fam­il­ies hear, on av­er­age, only 600 words per hour; those from the most af­flu­ent and highly edu­cated fam­il­ies hear over 2,000 words per hour. By the age of 4, the total gap in words heard is es­tim­ated to be 30 mil­lion.

Bill Clin­ton fre­quently poin­ted out that par­ents raise chil­dren, not gov­ern­ments. But giv­en that, as his wife Hil­lary Clin­ton cor­rectly ad­ded, “it takes a vil­lage,” one might reas­on­ably hope that once chil­dren enter school they will find something ap­prox­im­at­ing a level play­ing field. This cer­tainly looks to be a shared polit­ic­al goal. As George W. Bush, Pres­id­ent Clin­ton’s suc­cessor, said in 2001, when launch­ing the edu­ca­tion re­form ini­ti­at­ive, No Child Left Be­hind: Amer­ica’s “greatest chal­lenge” (this was be­fore 9/11) was to en­sure that “every single child, re­gard­less of where they live, how they’re raised, the in­come level of their fam­ily” would get a “a first-class edu­ca­tion.”

But after dec­ades of rhet­or­ic and re­form, the Amer­ic­an edu­ca­tion sys­tem is fail­ing as an en­gine of so­cial mo­bil­ity. The poorest chil­dren (black and white alike) re­ceive the worst pub­lic edu­ca­tion. Achieve­ment gaps between poor and af­flu­ent chil­dren tend to widen, rather than nar­row, dur­ing the K-12 years.

Bey­ond the front porch and the school gates lies the com­munity, which can also make or break life chances. The “so­cial cap­it­al” gen­er­ated by the net­works and norms of com­munity life can be cru­cial for up­ward mo­bil­ity, es­pe­cially for those from troubled homes: the coach who builds con­fid­ence, the neigh­bor who helps with a col­lege ap­plic­a­tion, the preach­er who hears about a job open­ing, the fam­ily friend who keeps a strug­gling stu­dent from fall­ing be­hind. But here, too, the gaps are widen­ing. Com­munity act­iv­ism — vo­lun­teer­ing, sports, neigh­bor sup­port net­works, church-go­ing, and so on — is weak, and prob­ably weak­en­ing, in less af­flu­ent neigh­bor­hoods.

These dis­ad­vant­ages typ­ic­ally com­pound each oth­er, with low-in­come house­holds, un­stable fam­il­ies, and strug­gling par­ents liv­ing in the most hol­lowed-out com­munit­ies, con­tain­ing the worst schools, with the few­est so­cial and in­sti­tu­tion­al sup­ports for those in need. So the bar­ri­ers to up­ward mo­bil­ity get even high­er, along with the risks of get­ting stuck at the bot­tom of the lad­der.


At a time when the United States is fall­ing so far short of its own egal­it­ari­an ideal of Al­ger-style mer­ito­cracy, cur­rent eco­nom­ic and so­cial trends are likely to make things worse. Piketty’s pre­dic­tions, like all pre­dic­tions, are far from proven; in­deed, there are ser­i­ous doubts about some of his as­sump­tions. But if he turns out to be even frac­tion­ally right, we are in trouble. So, what is to be done? It hardly needs say­ing that there is no quick and easy fix. But there is also no ex­cuse for sit­ting on our hands while the idea of op­por­tun­ity be­comes close to a cruel joke for so many. Op­por­tun­ity is a pub­lic good, as well as a private one.

The good news is that U.S. politi­cians are wak­ing up to the dangers of a di­vided na­tion. The bad news is that there is al­most no con­sensus on which di­vides mat­ter. Demo­crats em­phas­ize in­equal­it­ies in ma­ter­i­al di­men­sions, es­pe­cially money; Re­pub­lic­ans fo­cus on class gaps in fam­ily, school­ing, and com­munity. Of course both are right. Cash gaps and class gaps both mat­ter, and any polit­ic­al agenda that ad­dresses only one side of the equal­ity equa­tion is destined to fail.

If we start with the money gap, Piketty’s pro­posed rem­edy, lo­gic­ally enough, is to levy heav­ier taxes on cap­it­al gains and wealth. This has been dis­missed as a uto­pi­an, even un-Amer­ic­an idea. Even now, when the de­sire to tax the rich could be ex­pec­ted to be at its zenith, Amer­ic­ans re­main un­enthu­si­ast­ic re­dis­trib­ut­ors. In­deed, an aver­sion to tax­ing in­her­it­ance is one of the few is­sues on which there is fre­quent bi­par­tis­an agree­ment. To Obama’s cred­it, he has tried to re­verse the tide. To no avail. Even blue states like Mary­land are rein­ing back their es­tate taxes.

But this could change. There is ac­tu­ally a fairly deep anti-wealth seam in the Amer­ic­an ideo­logy of egal­it­ari­an in­di­vidu­al­ism, as Piketty him­self notes. Jef­fer­son and Thomas Paine favored high taxes on es­tates to pre­vent the re-cre­ation of an ar­is­to­cracy. Even An­drew Carne­gie, who loathed taxes in gen­er­al, was a fan of the ones on in­her­it­ance: “I say the com­munity fails in its duty, and our le­gis­lat­ors fail in their duty, if they do not ex­act a tre­mend­ous share”¦” of the “enorm­ous sum” be­queathed by the wealthy to their heirs. To this day, many wealthy Amer­ic­ans — War­ren Buf­fett per­haps the most prom­in­ent and out­spoken among them — con­tin­ue to speak up against the un­fair­ness of the tax sys­tem, and some, like Buf­fet and Bill Gates, have pledged to give away much of their for­tunes rather than pass it on to their chil­dren.

Wealth in­equal­ity is a dir­ect threat to a so­ci­ety that as­pires to be ordered by mer­it and marked by so­cial mo­bil­ity. So pro­pos­als to tax the wealthy and use the rev­en­ues to fund op­por­tun­ity-en­han­cing strategies are far from “un-Amer­ic­an.” They are, in fact, quint­es­sen­tially Amer­ic­an. If the es­tate tax were re­turned to the level of the Pres­id­ent George H.W. Bush years, for ex­ample, it would raise an ad­di­tion­al $300 bil­lion to $400 bil­lion over the next dec­ade — twice as much as we need to fund uni­ver­sal pre-K.

There is a long way to go to per­suade the Amer­ic­an pub­lic of this, of course, but it is con­ceiv­able that with the right pub­lic fram­ing, and con­sist­ent polit­ic­al pres­sure, opin­ion on wealth taxes could shift. The new in­vest­ment in­come tax on couples with joint in­comes of over $250,000 to fund Obama’s Af­ford­able Care Act provides a glim­mer of hope that cap­it­al gains taxes are not com­pletely off the table.

The so­cial di­vide must also be ad­dressed — with money, more cre­at­ive think­ing about how to help people ac­quire the skills they need, and in­sti­tu­tion­al and fin­an­cial sup­port for those fall­ing be­hind. Tack­ling the par­ent­ing gap, for ex­ample by ex­pand­ing home vis­it­ing pro­grams, ought to be a bi­par­tis­an cause. Like­wise, ac­tion to even up qual­ity in K-12 schools, with a con­cer­ted at­tack on “ex­clu­sion­ary zon­ing laws” that se­cure the bor­ders of school catch­ment areas for the be­ne­fit of the af­flu­ent, more choice in schools for chil­dren of the low­est-in­come par­ents, and big fin­an­cial in­cent­ives to at­tract the best teach­ers to the toughest schools.

On the polit­ic­al left, there are plenty of people who think it is time to con­sign Hor­a­tio Al­ger to the dust­bin of his­tory. For them, the Al­ger myth is little more than a cul­tur­al con­jur­ing trick, provid­ing an il­lu­sion of op­por­tun­ity to dis­tract the masses from gross in­equal­it­ies of in­come and wealth. It can also act as a con­veni­ent un­truth for the elite, who can rest as­sured of their in­trins­ic su­peri­or­ity: “Born on third base “¦ think­ing they hit a triple,” in foot­ball coach Barry Switzer’s vivid phrase.

But abandon­ing Al­ger — giv­ing up on the Amer­ic­an Dream — is not an op­tion. While Bel­lamy and Piketty provide rich seams of ideas to mine, there is no pro­spect of a Euro-egal­it­ari­an turn in Amer­ic­an polit­ics. The Amer­ic­an body polit­ic would simply re­ject a graft of European-style so­cial demo­cracy. It’s point­less for pro­gress­ives to get frus­trated about this. At­tach­ment to the ideal of equal op­por­tun­ity is not a blind spot in the vis­ion of voters. Amer­ic­ans do have strong egal­it­ari­an in­stincts, but they go hand-in-hand with a fierce com­mit­ment to in­di­vidu­al­ism. The ideal of mer­it-fueled mo­bil­ity is a fixed fea­ture of Amer­ic­an polit­ics and ideo­logy. It comes, al­most lit­er­ally, with the ter­rit­ory. Even if it were pos­sible to re­tire the Al­ger myth, it would be a mis­take. The na­tion­al com­mit­ment to the prin­ciples of nat­ur­al equal­ity, op­por­tun­ity, and up­ward mo­bil­ity is an Amer­ic­an strength. Only a polit­ics that goes with this Amer­ic­an grain stands any chance of cre­at­ing a more equal na­tion.

On that spring even­ing in the na­tion’s cap­it­al, the crowd had gathered not to bury Al­ger, but to praise him. It is now time to pay him more than lip ser­vice. Equal op­por­tun­ity must and will re­main the quint­es­sen­tial Amer­ic­an ideal. The chal­lenge is to live up to it.

Find more in­form­a­tion at the Brook­ings In­sti­tu­tion

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