MONEY MATTERS

Americans enjoy less economic mobility than their peers in Canada and Europe. Isabell V.Sawhill, an economist at the Brookings Institution said, “It’s becoming conventional wisdom that the U.S. does not have as much mobility as most other advanced countries.” Because Benjamin Franklin and Henry Ford rose from humble origins to economic heights it is not that all the men from the bottom can rise higher.

In recent years, a project led by an economist at a Swedish University, found that 42% of U.S. men raised in the bottom fifth of incomes stay there as adults. This shows a disadvantage much higher than in Denmark (25%) and Britain (30%). Meanwhile, just 8% of the U.S. men rose to the top fifth whereas it is 12%in Britain and 14% in Denmark. The reason for the mobility gap has been discussed in academic circles but the street protests and the mass unemployment has moved the discussion to centre stage.

The reason for the mobility gap depends on the depth of the U.S. poverty, which leaves poor children starting especially far behind. Another reason is the unusually large premiums the U.S. employers pay for college degrees. Since children generally follow their parent’s educational trajectory, that premium increases the importance of family background and stymies people with less schooling.

The studies show the inequality among the U.S. people. While the Liberals often complaint about the large income gaps, the conservatives argue that the system is fair and everyone can climb the ladder. But the evidences suggest that America is not only less equal but also less mobile.

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