Declining prospects for upward mobility, and the simultaneous social inequality, are the existential issues of our time. The percentage of adults who believe things will be better for their kids is at its lowest point in 30 years, with a majority now saying upward mobility for the next generation is not likely. The kids, God bless them, are still far more optimistic.
Despite President Obama's occasional class-warfare rhetoric, this gap has widened significantly under his watch; the top 1 percent of earners garnered more than 90 percent of the income growth in his first two years, compared with 65 percent under George W. Bush. But the problem is more extensive than one or two administrations. Most Americans' incomes have stagnated for almost a quarter century.
REGISTER ILLUSTRATION BY CHRIS MORRIS
Inequality is on the rise throughout the country, while there are significant differences in its depth by geography and region. California is producing ever more billionaires, three times as many as in regularly faster-growing Texas, but the middle class is in secular decline, according to a recent Public Policy Institute Study, and now constitutes less than half California's population. The state also suffers the highest rate of poverty in the country and is now home to roughly one-third of the nation's welfare recipients, equal to almost three times its proportion of the nation's population. Big city connections
Longtime Seattle demographer Richard Morrill tried to map out the emerging geography of inequality by regions and metropolitan areas. His conclusions are both complex and compelling.
The places that did best in terms of income equality tended to be in the northern Plains, parts of the upper Midwest and northern New England. Much of the greatest inequality was found in the nation's megastates – California, New York, Florida and, yes, Texas. At the metropolitan level, generally the worst income gaps were found in some of our biggest metros, such as first New York, followed by Miami, Los Angeles, Houston and San Francisco, as well as New Orleans.
The reasons are complex. These dynamic cities have large minority populations, as well as immigrants and their offspring, a disproportionate number of whom are poor. At the same time, these same places attract large numbers of affluent residents, particularly related to jobs in the finance, information and energy industries, but share a shrinking base of middle-income jobs. This tends to produce extraordinarily high levels of inequality. Washington, D.C., has some of the most extreme divergences between rich and poor, while the region's sprawling suburbs are among the most egalitarian in the nation.
“Generally speaking, suburbanized, less-dense (and, often, less-globalized) areas tend to be more equal,” Morrill notes. Cultural correlations
Certainly urban form, and the existence that produces middle-income jobs, helps determine levels of inequality. But perhaps the least-appreciated factor may be ethnicity, something discussed more emotionally than logically. The least inequality, Morrill notes, occurs within what he calls the “Germanic belt” that extends from large parts of Pennsylvania, across the northern Great Lakes and the Plains, all the way to the Pacific Northwest, as well as Utah; many Mormons are of German, Scandinavian and other northern European stock.
Peruse a map of U.S. ethnicities, along with Morrill's findings, and you can see this extremely high degree of confluence. One key may be culture. German and Scandinavian heritage, Morrill notes, embraces egalitarianism, self-control and social obligation, all of which are ideal characteristics for economic progress.
After all, Scandinavia itself has less poverty, and more widespread prosperity, than virtually anywhere in the world. A Scandinavian economist, promoting social democracy once told Milton Friedman: “In Scandinavia we have no poverty.” Friedman replied, “That's interesting, because in America, among Scandinavians, we have no poverty, either.” Indeed, the poverty rate for Americans with Swedish ancestry is 6.7 percent, about half the U.S. average. Economists Geranda Notten and Chris de Neubourg have found the poverty rate in Sweden to be an identical 6.7 percent.
The “Germanic belt” areas also tend to emphasize education, most importantly, at the grade school level. The best science scores among eighth-graders, according the National Educational Assessment, are found almost totally in the northern-tier, heavily Germanic region of the country. Northern European redoubts such as Minnesota, the Dakotas, Montana, Utah and northern New England all scored best. Amazingly, California, the nation's undisputed technological capital, ranks 47th; New York, much of the south (excluding Texas) and the Southwest do much more poorly.
Some might be tempted to draw political lessons here since many of the places with greater equality tend to be more economically and culturally conservative. But liberal Washington and Oregon also score relatively well on the science tests, and rank among the most egalitarian areas of the country. These areas, along with the San Francisco Bay Area, also attract high levels of Asian immigrants, people who, like German-Scandinavians, tend to stress education and generally have prospered more than the norm.
More troubling is the correlation between large populations of certain groups – notably African Americans but also Hispanics – and extreme inequality. Morrill's analysis shows a huge confluence between states with the largest income gaps, largely in the South and Southwest, and the highest concentrations of these historically disadvantaged ethnic groups.
This is an uncomfortable topic. Many liberals celebrate diversity in any form, and tend to reject the importance of culture in economic success. Conservatives, for the most part, dismiss discussions of inequality as socialistic in nature; others refuse to acknowledge the continued legacy of slavery, the extreme poverty of many Latino immigrants and the impacts of globalization on blue-collar employment, which historically paced the upward mobility of other low-income ethnic groups.
We simply can't wish away reality; the scar of racism and the impact of economic change, has made it tougher for less-educated minorities to rise in contemporary America.
Looking at things as they are is not racist, and acknowledging class division does not make one in Leninist. Morrill is a Swedish-style traditional social democrat, who did his post-graduate work at Sweden's prestigious Lund University. You also simply cannot rule out cultural factors – such as family, religion, belief in education, as well as belief in self-sufficiency – as key determinants in individual, as well as regional, economic equality.
Also complex are the political implications. To be sure, much of America's widening class divide, and stunted upward mobility, have origins in broader economic forces, as well as technological change. This appears to have advantaged certain areas, and ethnic groups, more than others. The Left accurately criticizes that “trickle down” economics, as practiced now by the Fed and celebrated on Wall Street, clearly does not improve life for most people. If we follow this approach, we could very well end up, as economist Tyler Cowen suggests, with a country where 85 percent of the population struggles while 15 percent enjoys unprecedented high standards of living. More mobility
This growing inequality, with its racial connotations, is fundamentally socially unsustainable. Yet how to restart upward mobility remains a difficult proposition. Progressives might shout loudest about inequality, but their economic policies have failed to produce either upward mobility or greater equality.
Indeed, under the current liberal regime, the prospects for the poor and working class have decreased markedly while the wealthy, often villainized by the administration, have luxuriated. During much of the tenure of the first black president, the gap between Anglo incomes on the one side and those of blacks and Hispanics has widened, doubling since the Great Recession.
Indeed, racial economic disparities are mostly unchanged or are growing. The black unemployment rate remains more than double the white jobless rate and reaches 40 percent among black youth.
A debate is needed now about what policies best promote upward mobility. Some combination of encouraging broader-based economic growth and nurturing fundamental values of education, family and social engagement arguably offers the best approach. It is a message likely neither political party particularly wants to hear, but it's one they need to acknowledge and confront. Register opinion columnist Joel Kotkin is R.C. Hobbs Professor of Urban Studies at Chapman University. He is the executive editor of www.newgeography.com.