Income Inequality (13): Social Mobility in the U.S. and Britain

America and Britain … have the highest intergenerational correlations between the social status of fathers and sons; the lowest are found in egalitarian Norway and Denmark. Things are even worse for ethnic minorities; a black American born in the bottom quintile of the population (by income) has a 42% chance of staying there as an adult, compared with 17% for a white person. The Economist (source)

If equality of opportunity is important – and I think it is – then it’s unacceptable that people’s income is to a large extent determined by the income of their parents or by their race. Equality of opportunity means that individuals who grow up in poor families can use their talent and effort to become wealthy, and that individuals who have wealthy parents end up with relatively meager incomes because of their lack of talent and/or effort.

Now, a lack of social mobility isn’t such a big problem in very egalitarian societies with high average incomes, because (almost) everyone already has a decent and more or less equal income, something which cancels out or softens the injustice of seeing your income level determined by that of your parents. But, of course, Britain and the U.S. are not egalitarian. On the contrary, among developed countries they are among the least egalitarian with income inequality far beyond the average.

So, what to do about it? If we do nothing, then we may as well say out loud that we are a society based on injustice, a society in which one’s fate is determined by the lottery of birth, by the good luck or bad luck of being born into a certain  family. Maybe a “death tax” could help.

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