How I learned to stop worrying and love income inequality

How I learned to stop worrying and love income inequality

by digby

“The American Dream is alive in Denmark and Finland and Sweden. And in San Jose and Salt Lake City and Pittsburgh. But it’s dead in Atlanta and Raleigh and Charlotte. And in Indianapolis and Detroit and Jacksonville.”

The rich are getting richer, but according to a blockbuster new study that hasn’t made it harder for the poor to become rich. The good news is that people at the bottom are just as likely to move up the income ladder today as they were 50 years ago. But the bad news is that people at the bottom are just as likely to move up the income ladder today as they were 50 years ago.

We like to tell ourselves that America is the land of opportunity, but the reality doesn’t match the rhetoric—and hasn’t for awhile. We actually have less social mobility than countries like Denmark. And that’s more of a problem the more inequality there is. Think about it like this: Moving up matters more when there’s a bigger gap between the rich and poor. So even though mobility hasn’t gotten worse lately, it has worse consequences today because inequality is worse.

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. The research team of Raj Chetty, Nathaniel Herndon, Patrick Kline, and Emmanuel Saez looked at each “commuting zone” (CZ) within the U.S., and found that the American Dream is still alive in some parts of the country. Kids born into the bottom 20 percent of households, for example, have a 12.9 percent chance of reaching the top 20 percent if they live in San Jose. That’s about as high as it is in the highest mobility countries. 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 we have numbers for.

Here’s the map. The lighter colors have more mobility than darker colors:

The article goes on to discuss why this is the case, but there is no one factor that explains it.

The thing to keep in mind about this study is the fact that it’s being used by alleged liberals as a way to stop worrying and learn to love income inequality. We’re supposed to be very happy that things haven’t gotten worse. America! Fuck yeah!