Social Mobility

Writing in the Washington Post, Herold Meyerson complains that America is no longer the land of opertunity.

The best way to measure a nation's merit-based status is to look at its intergenerational economic mobility: Do children move up and down the economic ladder based on their own abilities, or does their economic standing simply replicate their parents'? Sadly, as the American middle class has thinned out over recent decades, the idea of America as the land of opportunity has become a farce. As a paper by Julia Isaacs of the Brookings Institution has shown, sons' earnings approximate those of their fathers about three times more frequently in the United States than they do in Denmark, Norway and Finland, and about 1¹ / ₂ times more frequently than they do in Germany. The European social democracies — where taxes, entitlements and the rate of unionization greatly exceed America's — are demonstrably more merit-based than the United States.

It should come as no surprise that the liberal Meyerson's prescription for this is more government in the form of retraining for workers and a limit on how much anyone can make. But, is this valid? Will duplicating Scandinavian social democracies make the US a better place? Is big government responsible for Scandinavian success or is there more to it?

There are a few differences that immediately spring to mind when comparing the US and Scandinavia. The US is a massive country, straddling a continent with a highly diverse population. In contrast, Denmark, Norway, and Finland are a small part of Europe. While each of these countries is unique from the others, their populations are more homogenous than the US. Also, these countries are blessed with abundant oil resources which help to finance their governments.

A huge difference between the US and these other countries seems to have been avoided - single parent families. In the US, this is the biggest predictor of social mobility. If you are raised by two parents then you are much more likely to advance. This is far more important than union membership which is one of the factors Meyerson advocates. But, in unions, advancement is usually based on seniority rather than merit.

But these issues pale to insignificance when you look at the article Meyerson referenced. the study looks at nine countries and ranks them according to how closely a son's earnings are tied to his father's. As Meyerson points out, the US is ranked near the bottom and the three Scandinavian countries are near the top. He neglected to mention the other five countries and where they fall in the rankings. The one country worse than the US is the United Kingdom. On the other hand, Canada is almost tied with Finland as a high-mobility country. Falling in the middle rankings are France, Germany, and Sweden. Are we to believe that Canada is a social democracy but the UK and France are not?

When the entire ranking is viewed then it become much harder to prove a relationship between social mobility and social democracies. And, as been pointed out for decades, big government programs like welfare tend to institutionalize poverty. Adding more government is likely to make problems in the US worse rather than cure them.