America’s Rigid Class Structure

By Benjamin Landy

Social mobility in the United States has fallen as the country’s income distribution has grown more unequal, meaning that it is now less likely that children of the lower and middle classes will grow up to live better lives than their parents did. According to the Center for American Progress, children from low-income families in the United States now have only a 1 percent chance of reaching the top 5 percent of the income distribution, while the children of the rich have about a 22 percent chance. Children born into families in the middle quintile of the income distribution (the 40th-60th percentile) actually have a higher chance of ending up in a lower income bracket (39.5 percent) than a higher one (36.5 percent), while their chance of reaching the top fifth percentile is under 2 percent.

International comparisons show that along with Italy and the United Kingdom, which also have relatively rigid class structures, the United States ranks among the least socially mobile countries in the OECD, and has the highest income inequality to boot. This graph looks at various countries based on a measurement of intergenerational income elasticity in which a level of one indiciates that the average child’s eventual income will be the same as that of his or her parents, ranging to zero when there is no correlation between family background and adult earnings.

Source: OECD                   

Although the “American Dream” has long been a critical facet of our national identity, by international standards, the United States actually has an especially poor degree of intergenerational mobility - worse than France, Germany, Canada, and Australia, not to mention the “social” market economies of Sweden, Norway, and Finland.

The Center for American Progress also found that education, race, health and state of residence were the four key factors in determining to what degree economic status was transferred from parents to children, with race and education being particularly important. In the United States, African American children born into the bottom quartile are nearly twice as likely to remain in that position as their white peers, and four times less likely to advance into the top quartile.

Reposted from my Graph of the Day Series at Taking Note.