Wednesday, July 1, 2015

Which Way Upward?

Rest in Peace American Dream
Flickr: Sasha Y. Kimel
Hello Everyone:

Southern United States has lately been in the focus of media attention, for all the wrong reasons.  Really, it is not Satan's spawning ground; in fact the South has made many positive contributions to global cultural history (Jazz, Blues, Harper Lee, William Faulkner). Unfortunately today, yours truly has another negative subject to talk about in relation to the South-why the American Dream is dead in that part of the country.  The Atlantic recently resurrected an article by Matthew O'Brien published on January 26, 2014 titled "Why Is the American Dream Dead in the South?" This piece is a timely look at why upward mobility in the South and Ohio has stagnated over the last fifty years despite growth in other parts of America and the rest of the developed world.

Historic King Street
Charleston, South Carolina
During the late stages of the 2012 Presidential election cycle, voters heard a great deal about the 1 percent versus the 99 percent.  That is, the top one percent of income earners are killing the American Dream for the remaining 99 percent.  There is one other component that did not receive as much attention, where you live.  Once again, location does matter.  Yes, the richer are indeed getting richer, but according to study "...that hasn't made it harder for the poor to become rich."  There is good news and bad news.  First the good news, workers at the bottom are just as likely advance up the income ladder as they were fifty years ago.  Now the bad news, workers at the bottom are just as likely advance up the income ladder as they were fifty years ago.  Allow blogger to explain.

7th Street Station
Charlotte, North Carolina
As much as like to tell ourselves that America is the land of opportunity, the harsh reality does not quite reflect the rhetoric-not for awhile.  The United States has experienced less social mobility than countries such as Denmark.  As Mr. O'Brien points out, "And that's more of a problem the more inequality there is."  Let blogger clarify:  Upward mobility matters more when there's a great disparity between rich and poor.  Therefore, despite the fact that mobility has not gotten worse, the consequences are worse today because there is greater inequality.

Matthew O'Brien writes, "But it's a little deceiving to talk about 'our' mobility rate. There isn't one or two or even three Americas. There are hundreds."  Raj Chetty, Nathaniel Henrndon, Patrick Kline, and Emmanuel Saez examined "commuting zones" (CZ) within America and discovered that the American Dream is still alive and kicking in parts of the nation. Mr. O'Brien continues, "Kids born into the bottom 20 percent of households, for example have a 12.9 percent chance researching the top 20 if they live in San Jose...But kids born in Charlotte only have a 4.4 percent chance of moving from the bottom to the top 20 percent.  That's worse than any developed country..."

"Geography of the American Dream"
  Matthew O'Brien's colleague Derek Thompson refers to the map at the left as "the geography of the American Dream,"  The map presents data where children have the best and worst chance of moving from the bottom quintile to the top quintile.  In Mr. O'Brien's blunt assessment, "...the South looks more like a banana republic."  (apologies to any readers in Central and South America).

One question that comes to mind is why the chances of upward mobility are greater in California than North Carolina?  Answering his own question, Mr. O'Brien writes, "Well, we don't know for sure, but we do know what doesn't."  The research revealed that local tax and spending decisions have some bearing, but not a great deal, on the regional disparities. The quality of schools vis-a-vis class size has no bearing; nor do local colleges and tuitions.  What abut the labor market, including manufacturing and foreign competition?  Non-factors as well. Therefore, what were the factors in the upward mobility gap?  Let blogger list them for you:

Multi-racial children
Race: The research team concluded that the larger the African American population, the lower the upward mobility.  However, this is not a race issue.  Rather, it is a rich and poor one.  Mr. O'Brien writes, "Low-income whites who live in areas with more black people also have a harder time moving up the income ladder."  In short, it is about where said black live that hurts mobility.

Segregation: Being poor can be seem very isolating-isolating from good jobs and schools.  it turns out  the larger the African American population, the more segregated along economic and racial lines a place tends to be.  Therefore, more divided a place is, the more likely that sprawl will occur.  The greater the sprawl, the less likely higher-income earners will invest in infrastructure.

Protesting segregation in schools
This leave the low-income earners with no access to the touchstones of the American Dream.  They are left with bad schools, demeaning jobs, and awful commutes should they find suitable employment.  Therefore, as Mr. O'Brien surmises, " should be no surprise that the researchers found that racial segregation, income segregation, and sprawl are all strongly negatively correlated with upward mobility."  However, what might be surprising is that it was irrelevant whether or not the wealth disassociated themselves from everyone else.  What did matter was that the middle class did cut themselves off from the low-income population.

Social Capital: Living in middle class communities is beneficial to upward mobility.  It results in better schools, better jobs, and better institutions (religious and civic).  People form relationship networks, which are positively correlated to upward mobility.  The Mormon communities in Utah is a stellar example of a vast safety net and services.

André da Loba

Inequality:  F. Scott Fitzgerald famously put it, "The rich are different from you and I," to which Ernest Hemingway responded "They have more money than you and I."  They also live in a world onto themselves.  It is a world of privates schools and an endless supply of academic enrichment programs.  This keeps the scions of the super rich from fall too far behind but it does not prevent the poor from moving up the scale.  There is simply no connection between the continued rise of the 1 percent and upward mobility.

Nevertheless, inequality does matter within the lower 99 percent.  The greater the gap between the poor and rich (not the super rich), the less mobility exists.  It does make sense in its own way, "'s easier to jump from the bottom near the top if you don't have to jump as far.  The tup 1 percent are just so high now that it doesn't matter how much higher they go; almost nobody can reach them."

Family: the bedrock institution of a civilization.  Family, who raises you, matters more than race, jobs, education, religious affiliation, and where you live.  At the risk of sounding like a broken record, children do better in a stable two-parent home.  Blogger recognizes that this is not always possible. However, blogger also believes that children need positive parental figures in their lives if they are thrive in this world.

Matthew O'Brien writes, "It's not clear what, if any, policy lessons we should take from this truism."  Mr. O'Brien colleague pointed out we don't really have any idea how to promote marriage.  We can try telling people how great it is to get hitched.  We can even get rid of the marriage penalties some low-income couples face.  But these won't, and haven't, been making more people exchange till-death-do-us-parts.  Poor women understand that cajoling, guilting, or just yelling at people to get married does not mean your partner will be a good spouse and provider. These women do understand that marriage is important and sometimes, remaining single is better than a bad marriage.  Amen to that.

Should we worry about flat mobility?  It depends on socio-political-economic outlook on life.  A conservative will look at flat mobility and think, see we shouldn't worry about the top 1 percent, because they're not making the American Dream any harder to achieve.  If you tend to lean liberal, then you look at flat mobility and say, see, we should care about inequality, because it can make the American Dream harder to achieve-and it raises the stakes if you don't.  Both points of view argue in favor of upward mobility.  However, that is not good enough to let it stagnate.

While the article "Why is the American Dream Dead in the South" does not focus specifically on the Southern United States, it does make some good points that relate to upward mobility in that region. While this article does not offer any tangible solution, it does offer some thoughts on the direction the South can take if it truly wants to move forward.

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