When it comes to the economic malaise facing America, the biggest problem is not the widening gap between rich and poor, but the stagnation of social mobility. When the income gap of one generation becomes an opportunity gap for the next, inequality hardens into social stratification.
Eliminating the income gap is relatively straightforward (if politically fraught): raise taxes and expand government assistance for lower-income workers. Kick-starting social mobility, once it has slowed, is much more difficult.
It is important to be clear what we are talking about. There are two distinct kinds of intergenerational mobility. Absolute mobility is a measure of whether a person is financially better off than his or her parents were at the same age.
Relative mobility, in contrast, is a measure of which rung of the income ladder a person lands on, compared with his or her parents’ position. If everyone made twice what their parents did, everyone is upwardly mobile, in absolute terms — but since their rank position on the income ladder is the same as their parents’, relative mobility would be zero.
We can improve rates of upward absolute mobility by simply expanding the economy. But improving rates of upward relative mobility from the bottom comes with a sting in the tail: it requires more downward mobility from the top.
It is well known that in the United States, income distribution has a “sticky floor.” Two-fifths of children born into the poorest fifth of households remain there as adults.
But it is sticky at the top, too: the same odds apply to those born into the richest fifth.
It is a stubborn mathematical fact that the top fifth of the income distribution can accommodate only 20 percent of the population. If we want more poor kids climbing the ladder of relative mobility, we need more rich kids sliding down the chutes.
Even the most liberal parents are unlikely to be comfortable with the idea that their own children should fall down the scale in the name of making room for a smarter kid from a poorer home. They invest large amounts of economic, social and cultural capital to keep their own children high up the social scale. As they should: there is nothing wrong with parents doing the best by their children.
The problem comes if institutional frameworks in, say, the higher education system or the labor market are distorted in favor of the powerful — a process the sociologist Charles Tilly labeled “opportunity hoarding.” The less talented children of the affluent are able to defy social gravity and remain at the top of the ladder, reducing the number of places open to those from less fortunate backgrounds.
One potential danger zone for opportunity hoarding is access to higher education. College matters a lot for social mobility. For someone from a poor background, getting a four-year degree virtually guarantees upward mobility. Elite colleges act as gateways to the best career paths. Getting more poor kids into colleges, and getting the brightest into the best colleges, ought to be a national mission.
As part of his move to increase the accountability of colleges, President Obama has proposed a financial “bonus” for institutions that graduate more students whose lower income makes them eligible for Pell Grants. And that’s a good start. But colleges themselves need to be much more aggressive.
There are tens of thousands of high-schoolers smart enough to go to selective colleges, who don’t even apply. Those who do, and who get in, graduate at high rates.
Elite colleges should also get rid of one aspect of affirmative action: the bias in favor of applicants who are children of alumni. Harvard accepts 30 percent of these “legacy” applicants, compared to a 6 percent overall rate.
Of course, most graduates of schools like Harvard feed into the affluent strata of society, and are able to immerse their children in extracurricular activities and test prep classes. So their children will be clustered among the top end of the applicant pool.
But the enormous discrepancy between legacy and average acceptance rates indicates that there is something else at work: namely, opportunity hoarding that impedes relative social mobility.
At the very least, schools like Harvard should try much harder to keep their legacy-admission rates in line with their overall admission rates.
Opportunity hoarding can also occur in the allocation of workplace positions. Half of all jobs are found through family or friends, and these informal networks are likely to perpetuate existing inequalities.
It is hard to do much about the paid side of the job market. But we can do something about unpaid internships. These have become more commonplace and, in many cases, an important first step on a lucrative career ladder. As they are unpaid, they automatically favor the affluent. Effectively unregulated, they can also be handed out to the children of clients or friends.
One step would be to expand and more stringently enforce minimum wage laws, so that fewer positions were unpaid and thus off limits to young people who needed to work for a living.
Firms should allocate internships through an open, competitive process, and should pay a levy for every unpaid internship position, with the proceeds going into a national or state pool to provide living expenses to lower-income interns.
These opportunities — an undergraduate degree from Harvard or Yale, an internship at a senator’s office — are valuable precisely because of their scarcity. They are therefore the ones at most risk of being hoarded.
These solutions may sound easy, but they are not. While politicians discuss social mobility as a pain-free goal, the unspoken, uncomfortable truth is that relative mobility is a zero-sum game. Opening more doors to applicants from low-income backgrounds often means closing more doors to affluent applicants.
This is delicate territory. Nobody wants parents to stop trying hard for their children. But nor do we want a society in which the social market is rigged in favor of those born into affluence. If we want a competitive economy and an open society, we need the best and brightest to succeed. This means some of the children of the affluent must fail.