Tuesday, February 25, 2014

Why Conservatives Talk about Opportunity Rather Than Equality

Talking about opportunity -- similar in concept to "social mobility" -- is easy. You can say opportunity is out there. You just have to work hard to improve your prospects.

On the other hand, equality is hard: To make things more equal, money has to shift hands. And that ain't easy. Someone has to give it up so others may have it.

Conservatives talk opportunity, liberals talk equality. This is not surprising. It's the great tension of our era.

James Surowiecki in the New Yorker makes it plain why this is the case:
That sounds like good news [that social mobility isn't shrinking], but there’s a catch: there wasn’t that much mobility to begin with. According to Chetty, “Social mobility is low and has been for at least thirty or forty years.” This is most obvious when you look at the prospects of the poor. Seventy per cent of people born into the bottom quintile of income distribution never make it into the middle class, and fewer than ten per cent get into the top quintile. Forty per cent are still poor as adults. What the political scientist Michael Harrington wrote back in 1962 is still true: most people who are poor are poor because “they made the mistake of being born to the wrong parents.” The middle class isn’t all that mobile, either: only twenty per cent of people born into the middle quintile ever make it into the top one. And although we think of U.S. society as archetypally open, mobility here is lower than in most European countries.
This wasn’t always the case. As the economist Joseph P. Ferrie has shown, in the late nineteenth century U.S. society was far more mobile than Great Britain’s—a child in the U.S. was much more likely to move into a higher-class profession than that of his father—and much more mobile than it became later. It was possible for Andrew Carnegie to start as a bobbin boy in a cotton factory at a dollar-twenty a week and end up one of the world’s richest men. This legacy left a deep imprint on American culture. The sociologist Werner Sombart noted in 1906 that the average American worker felt he had a good chance of rising out of his class. That feeling has persisted: Americans are less concerned than Europeans about inequality and more confident that society is meritocratic. The problem is that, over time, the American dream has become increasingly untethered from American reality.
 We hit a wall in the early 1980s. This graph tells the story:

The decline of unions correlates with declining wages:

Surowiecki finishes:
More important, in any capitalist society most people are bound to be part of the middle and working classes; public policy should focus on raising their standard of living, instead of raising their chances of getting rich. What made the U.S. economy so remarkable for most of the twentieth century was the fact that, even if working people never moved into a different class, over time they saw their standard of living rise sharply. Between the late nineteen-forties and the early nineteen-seventies, median household income in the U.S. doubled. That’s what has really changed in the past forty years. The economy is growing more slowly than it did in the postwar era, and average workers’ share of the pie has been shrinking. It’s no surprise that people in Washington prefer to talk about mobility rather than about this basic reality. Raising living standards for ordinary workers is hard: you need to either get wages growing or talk about things that scare politicians, like “redistribution” and “taxes.” But making it easier for some Americans to move up the economic ladder is no great triumph if most can barely hold on.
When conservatives talk about "opportunity" and liberals talk about "equality," one thing is key: If opportunity for the working stiffs to improve their living standards has all but disappeared, then we're left to raise their living standards some other way. If we can't equalize opportunity, we can at least equalize standards of living, like most evolved nations in the world do, at least to some extent greater than the U.S.

Raise the minimum wage. Better still, insist on a living wage for all Americans. We can afford it, and history dictates that it may be our only path to economic health for all. And, if those with the lowest wages tend to spend everything we hand them, this shift of wealth from upper classes to lower classes will be a fabulous stimulus for the whole economy. Won't the "job creators" benefit, too?

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