Social Mobility Wins

Socialism is enjoying a moment in the United States. So is upward mobility. That is bad news for the socialists. An animating feature of democratic socialism is the belief that inequality is baked into the structure of market capitalism itself. The Democratic Socialists of America’s constitution “reject[s] an order based on private profit…[and] gross inequalities of wealth and power,” and sees America’s “class structure” as an inherent conflict of interest between haves and have-nots. The subtitle of Bhaskar Sunkara’s 2019 The Socialist Manifesto is “The Case for Radical Politics in an Era of Extreme Inequality.” 

Another feature of democratic socialism in America is that its adherents are far more white, highly educated, and upwardly mobile than the caricatured “worker” supposedly at the center of their movement. They possess the hallmark characteristics of upward mobility in America. Like the more highly educated and wealthier Trump voters who are “more MAGA” than working-class Trump supporters, there seems to be an inverse relationship among socialists between their personal upward mobility and their view that upward mobility is dead.  

A bigger problem for the socialists than their own self-contradictions, though, is that empirical reality shows that upward mobility is alive and well for the oppressed classes they hope to enlist in their cause. Three recent economic studies on social mobility constitute an important case in point.  

The first is a study by Stephen Rose and Scott Winship showing that the middle class is indeed hollowing out – because so many people are moving up and out of it. The study shows that in the 50 years since 1975, the share of American families in the middle class fell from 36 to 31 percent of the population, while the lower middle class shrunk from 24 to 16 percent and the truly poor shrank from 30 to 19 percent. Meanwhile, the upper middle class grew from 10 to 31 percent. This means that the share of American families in the upper middle class is now as large as that of the main middle class and almost as large as the share of low-income and lower middle class families combined.  

The common media narrative about the middle class “hollowing out” does not hold up when income groups are organized by purchasing power over time and pegged to the poverty level, as Rose and Winship have done. By adhering to a stable and accepted measure of income groups, they observe how many people move from one group to another over time. Calling for socialism to repair the injustice of inequality sounds strange indeed in a country in which nearly a third of the population is now upper middle class and both low-income and lower middle-class populations have shrunk by about a third over the past 50 years.  

Saying that the American Dream is not dead and that we should continue to support policies that incentivize hard work, educational achievement, savings, mobility, and smart family choices is one of the quickest ways to be labeled a “zombie Reaganite” by today’s populist nationalist writers on the right and an evil capitalist by those on the left. But it is hard not to read the Rose-Winship study without deriving that conclusion and risking those accusations. The study does not suggest that America is firing on all cylinders or that we should no longer care about inequality, but it does undercut the socialist, and, for that matter, populist nationalist rationale in a major way.  

A second study, a first-of-its-kind analysis by economists Richard Burkhauser and Kevin Corinth, takes us farther back in history and convincingly shows  that the economic mobility of black Americans improved at a better rate before the War on Poverty than after it. Burkhauser and Corinth produce, for the first time, reliable measures of income and poverty between 1939 and 1963, concluding that the rate of poverty reduction through work-based income was higher than the years and decades following the creation of the War on Poverty in 1964. The study therefore makes an original contribution to the economic literature by showing that the modern welfare state did not seem to have much more of an effect on poverty than the pre-1964 status quo would have.  

Poverty measures are famously fraught with methodological issues, but even when multiple reliable measures are considered since the Great Society was launched in the 1960s, the study shows that in pre-Civil Rights America, blacks were improving their economic conditions at a rate equal or superior to the post-Great Society environment.  

These findings should not be interpreted to mean that safety nets are bad or unnecessary. Clearly, welfare provides necessary assistance to low-income families during seasons of hardship. But America’s patchwork of welfare programs has also created incentives not to improve one’s lot, which advocates of an expanded social welfare state often choose to ignore. Whatever the case may be about incentives in welfare programs, the study raises important questions that defenders of expanded social welfare programs cannot ignore – at least not while claiming to be intellectually honest.  

A third study by a seven-member team led by Harvard economist Raj Chetty shows that investments in mixed-income, mixed-use developments causally improve incomes and childhood outcomes in low-income, high-crime neighborhoods. Chetty and his collaborators are well-known for demonstrating in previous studies that children whose low-income parents move into higher- or mixed-income neighborhoods fare better economically and socially then children whose parents stay in low-income areas. This new study shows convincingly that efforts to revitalize low-income areas produce the same results, likely for similar reasons: when children grow up in safer places surrounded by more people who take school and career planning seriously, they are more likely to do the things required to achieve upward mobility.  

The program that reformed public housing in America (and provided the troves of longitudinal data that Chetty and his colleagues have analyzed) in the 1990s was conceived in an era when living (as opposed to zombie) Reaganites, after years of analysis, concluded that the welfare state produced in the 1960s was at odds with something fundamental in human nature: the desire to act on that third unalienable right, “the pursuit of happiness.” Our cash transfer welfare program, failing public schools, and public housing were all targeted for reform in the 1990s, and all the reforms have succeeded where their present-day critics said they would fail. 

These three studies – using different data sets and high-quality methods – show that when conditions are favorable to upward mobility, you get upward mobility. When people live within an environment offering good jobs, good education, social networks, and a culture of self-improvement and hard work, they experience progress in a way that undercuts the philosophical rationale that socialists need to justify the policies they advocate.  

Ryan Streeter is executive director of the Civitas Institute.