Saturday, November 24, 2012

Social Mobility

Some years ago, on a business trip to Mexico City, I was hosted by one of Mexico's most prominent publishers. I have fond memories of a meal we shared with his family at a restaurant that would put the proliferating Mexican eateries in our area to shame. What I remember most, though, is the conversation we had on societal mobility.

In brief, my host marveled at the upward mobility of the American worker. How is it possible, he wanted to know, for Americans to change jobs so often or to move up the ladder to management and executive positions? By contrast, he explained that in his country such mobility is practically impossible. His sons, for instance, were sure to follow him in the publishing business; there was absolutely no question about their future careers. The same applied at all levels of business and industry, as career changes and promotion from within were extremely rare. Because there is little opportunity for advancement, the poor remain poor, the middle class remains small and stagnant, and the wealthy maintain a privileged and closed society.

There are parallels in social stagnation all over the world, not just in Mexico. The shining exception is the United States, the land of opportunity. No other country (except Canada to some degree) enjoys the freedom for an individual to develop, to create, to innovate, to succeed. Most of the workers in low-paying jobs today will advance to better-paying jobs tomorrow. If they don't, it's not because of the lack of opportunity. Unfortunately, this seems to be changing.

The shocking increase in families on Welfare, Disability, Medicaid, Food Stamps, and Unemployment is more than just the result of a poor economy. To me, we're seeing the permanent effects of a nanny state that is creating a new form of slavery, the slavery of government dependency. As I described in a previous letter, there is a growing class of people in this country who are content to let the government take care of them rather than seeking to advance through their own personal initiative. They have abandoned ambition in favor of dependency. If this isn't a new form of slavery, then what is it?

I submit that we are indeed seeing a fundamental change in America, one sought and championed by the likes of Barack Obama. It is the abandonment of a purer liberalism that empathized with the poor, decried oppression and injustice, and championed equality, in favor of a corrupt liberalism whose fraudulent compassion  values the poor only for their votes.

           

1 comment:

  1. Certainly there are more people on Welfare, etc each year. While there is a group of poor people content to be on the dole, dependency is not a deliberate creation of a nanny state for the purpose of garnishing votes. Come on. Let's look at some numbers.

    The following is the distribution of Capital Income (taxable and non-taxable interest income, dividends, gains and losses and corporate tax liability):
    Bottom 20% get 0.7
    next 20 get 2.2
    next 20 get 3.8
    next 20 get 6.6
    top 20 get 86.0 (this was 9% in the 1970s)
    top 1 get 56.0
    top 0.1 get 38.0

    Income gains in after tax income from1980 to 2007

    Top 1% was +277%
    next 19 was +65
    next 60 was +38
    last 20 was +18

    Share of the income pie in 2007

    top 1% +125%
    top 20 +25
    next 20 -10
    next 20 -15
    next 20 -27
    bottom 20 -30

    Marginal tax rate in 1944 was 94%
    1980 was 70%
    now 35%

    The wealthiest individuals hit a high of $1.7 trillion, 5 times the 300 billion it was in 1992. In 1992 the tax paid by the 400 highest incomes was 26.4% of adjusted gross income. By 2009 that rate fell to 19.9%. 1/4 of them paid less than 15%; 1/2 paid less than 20%; and some paid nothing.

    My conclusion is that the rich are getting richer and really fast! The deck is stacked. I hate to think where this is headed. Yet this country is still allowing for upward mobility to many and many of them are moving up. While this is not a zero sum game, many are not moving up for many valis reasons or are not able to even keep up with nowhere to go. Just look at wages in the service industries. These are the groups that are contributing to the increase in Food Stamps, Welfare, unemployment insurance, etc.

    So, "Let them eat cake"?

    ReplyDelete