Posts Tagged ‘Opportunity’

Equality of opportunity and equality

April 23, 2015

Hardly any American politician talks about growing economic inequality in the USA.

Instead they talk about equality of opportunity—the equal chance to work your way up into a higher economic bracket than the one you were born in.

I agree with this up to a point.  Somebody who is lazy and useless does not deserve to be rewarded equally with someone who is hard-working and productive.

The problem is that it is much easier to work your way up when the majority of Americans are improving their economic condition.  It is very hard to work your way up when the majority of Americans are falling back.

Swimming with the current is something everybody should be able to do.  Swimming against the current is a challenge that not everybody can meet.

I am all for giving members of the underclass the means and the incentive to work their way up into the middle class.  But in the USA at the present moment, there is less and less of a middle class for them to move up into.

As inequality rises, opportunity declines

June 13, 2013

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Some Americans like to say that while we are less equal in income and wealth than some of the western European countries, we have greater opportunity to rise on the economic scale.   If everybody has a reasonably fair chance to acquire wealth, based on talent and hard work, then we should not complain about inequality of wealth, or so the argument goes.

The chart above shows the problem with that argument.   Among 10 industrial nations, the United States had the greatest concentration of income at the top, measured by the Gini coefficient, and the second least equality of opportunity, based on correlation of your income with your parents’ income.

This stands to reason.   The steeper and higher the slope, the hardest it would be to climb up.

The chart is based on figures for 1985, which was nearly 30 years ago.   Income inequality has grown since then, and there is a dot on the chart extrapolating the decline in economic mobility for 2010 based on the Gini coefficient of wealth concentration for that year.

Click on The Great Gatsby Curve for an animated GIF of the chart, which makes it easier to understand.

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