Pushing a formula for getting poor

Posted: May 23, 2005 12:00 AM

The Wall Street Journal and The New York Times featured stories over the last week about class and mobility in the United States. Despite drawing on largely different research, the conclusions of both features were the same. Overall class mobility has been coming to a screeching halt.

According the Journal, "... Americans are no more or less likely to rise above, or fall below, their parents' economic class than they were 35 years ago."

The Times quotes similar data, while also pointing out that at the same time the gap between rich and poor is increasing. From 1979 to 2001, after-tax income of the top 1 percent of American households increased 139 percent, the middle fifth by 17 percent and poorest fifth by 9 percent.

According to the research, whereas at one time parents' economic status contributed by a factor of about 20 percent to where a child wound up, today this is more in the range of 50 percent.

In other words, in today's America, the rewards for being born into the right circumstances and the penalties for being born into the wrong circumstances are becoming increasingly greater.

Perhaps the operative question to ask is if conventional American wisdom is wrong and if a genuinely free, capitalist society over time becomes increasingly less free and fair. Those born into the right circumstances, whether those circumstances be the right parents or the right genes, will evolve to the top and then the game is over.

Certainly this is the liberal line of thought. We can feel reasonably confident that these stories will make their way into the hands of those in Washington who'll want to fix the mobility problem. They'll want to pass legislation to level the playing field.

If and when this happens, let's keep history in perspective. The period of time during which class mobility in the United States has become increasingly sluggish has also been a time of unprecedented social legislation. During the last half-century, in which we've had a war on poverty, affirmative action and minimum-wage laws, income gaps have grown and the class into which one has been born has become an increasingly reliable predictor of the class in which one will die.

Perhaps the chicken and egg are being confused here and the purported solution is actually part of the problem.

The class-mobility picture becomes sharp when the issue of race enters the equation.

The Journal reports that "17 percent of whites born to the bottom 10 percent of families ranked by income remained there as adults, but 42 percent of blacks did." But, the next observation by the Journal reporter is the real kicker. "Perhaps as a consequence, public-opinion surveys find African-Americans more likely to favor government redistribution programs."

The reporter here totally ignores the possibility that the opposite might be true. Because blacks are more likely to favor government programs, they increase the likelihood that they will do no better than their parents.

I would state it this way. No one can devise a formula for getting rich. But I can devise a formula for getting poor. Don't work. Convince yourself that your life reflects the decisions of others and not yours. Be the perennial victim.

This is the toll that the welfare state has taken on blacks. It introduced a culture of poverty. Most Americans, regardless of race, trace their lineage to someone who was poor. Being poor is not a predictor of being in favor of government programs. However, thinking a government program is the answer to life's challenges is a good way to stay poor.

The American myth of the self-made man is somewhat of a distortion. It implies total independence. This is impossible. One needs to learn values somewhere and that place is generally family. The advantages of being born into a good family are, therefore, not news. A culture of merit is one in which individuals can carry the values they have absorbed with them into the marketplace and succeed.

The news of recent years is, rather, the encroachment on those values by the welfare state and the entitlement mentality. Blacks have been hurt particularly hard by this destructive culture, exacerbated by leaders who continue to preach it despite the facts. However, the welfare-state culture in America today goes well beyond the black community. It is this attitude that is increasingly freezing Americans in the circumstances in which they were born.

Freedom and capitalism do not reduce mobility. Mobility is lost as result of the belief that there is some path other than freedom and personal responsibility.