Posted by: nuleadership | March 26, 2012

Social Mobility in America

Economic turbulence has overtaken the American way of life.  In Europe and Asia, investors stand uncertain of their next moves.  Even America is part of an economic casualty. 

Yet, these problems are very personal to the average citizen. Higher gas prices and costs of living; the housing bust; and the financial crisis cause most people to worry about their future. With a weak job growth, many U.S. jobs continue to be shipped abroad. 

Global competition continues to cause Fortune 500 companies to search for cheap labor to increase profitability.  This reality often places developed countries like the United States at a clear disadvantage.  Consequently, there has been an increasing gap between the wealthiest people and the poorest people in this country.  The reality has become the shrinking or disintegrating of the middle class.

America is a shining symbol for social mobility across the world.  Social mobility can be defined as “the passage of individuals from one social class to another.” Most people feel that if they work hard, they can achieve a better life, regardless of their social standing. 

In some countries, a person is stuck in an economic class with no hope of further advancement.  If your parents are uneducated and work a low paying occupation, the children will grow up in this same status.

Marketing expert Michael Solomon argues the natural progression of social mobility: “People do improve their positions over time, but these increases are not usually dramatic to catapult them from one social class to another.”  The current economic picture makes social mobility more difficult.

Michael Snyder, editor of theeconomiccollapseblog.com, argues the systematic destruction of the middle class: “The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.” 

Snyder supported his claims with 22 statistical facts.  Below is a sample of his analysis:

  • Eighty three percent of all U.S. stocks are in the hands of one percent of the people.
  • American workers now must compete against situations like China where a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
  •  Sixty one percent of Americans “always or usually” live paycheck to paycheck, which was up from 49% in 2008 and 43% in 2007.
  • Average Wall Street bonuses for 2009 were up 17% when compared with 2008.
  • More than 40% of Americans who actually are employed are now working in service jobs, which are often very low paying.
  • Sixty six percent of the income growth between 2001 and 2007 went to the top one percent of all Americans.
  • Only the top 5% of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
  • In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300-500 to 1.
  • As of 2007, the bottom 80% of American households held about 7% of the liquid financial assets.
  • The bottom 50% of income earners in the United States now collectively own less than 1% of the nation’s wealth.

Many people hold that a political change will rescue the middle class.  As we have witnessed in the 2012 Presidential Election, petty politics are more important than solving the economic crisis.  Therefore, all families are held hostages. Any rescue will not be soon. 

Snyder doubts there is any hopeful solution for the stale social mobility occurring today: “The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world.”  Many people hope that America can compete in the future without sacrificing her core values related to social mobility.  Others have given up this hope.

 Do you feel social mobility is unsustainable in the U.S. , given global competition?

 © 2012 by Daryl D. Green

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Responses

  1. Speaking in generalities, social mobility is centered on education. If people from a lower economic class want to attain social mobility they must attain some sort of training/education. Skills, training, and education go hand in hand with the amount of income citizens will earn. According to a study by ABC, a big factor: educational attainment. Among middle-class Americans with college degrees, 75 percent say they’re “comfortably” middle class or even moving up; 25 percent are struggling. But among those without a college degree, this poll for “ABC World News With Diane Sawyer” finds that about twice as many, 49 percent, are fighting to hold their place. Education relates to income, and it’s less well-off people in the middle class who are more likely to be struggling to stay there (Langer, 2010). The American dream is still attainable in this country but people must be willing to work for it through education, hard work, and determination.

    Reference:
    Langer, G. (2010). The comeback: New poll shows concerns of american middle class. Retrieved from http://abcnews.go.com/WN/abc-world-news-poll-us-middle-class-concerns/story?id=10088470

  2. Chris,

    Excellent! I do believe an education provides more opportunities.

    Sadly, individuals need to be strategic in their career objectives during this economic crisis. Some areas are saturated in certain fields like communications.

    Yet, people run away from STEM (science, technology, engineering, and mathematics) like it is a disease. There are numerous opportunities in STEM. What can change this mindset about these difficult fields for American children?
    Professor Green

    • Generally speaking, people go by incentives—effort and reward. If you go to sciences, then what are the visible rewards in it? People generally see that in sports, business, entertainment, they become very famous and rich and those people in those industries become essentially their idols or role models. To promote STEM, you have to start creating greater and visible rewards for these fields. Society should start rewarding more for these fields if they want the young American children to immerse themselves in these fields.

  3. I don’t believe that social mobility can only be obtained trough education. I am a firm believer in if you work hard you will become successful. Yes a high school education is important, but if you are a person that has a talent or a skill, it is perfectly fine to not go to college and create your success with this skill. My brother in law is a great example of this, he never finished regular high school but instead became a builder, and now has his own business. He has to work hard but he enjoys it and can live comfortable life. I hear from friends with Master degrees that they can’t find a job, 10 years ago a job would have been a guarantee for them after graduation, now it will become a luxury. ADAM DAVIDSON writes in the NY times, “One of the greatest changes is that a college degree is no longer the guarantor of a middle-class existence” (Davidson, 2011). When I graduate, I may have to start at the bottom just like everyone else without a degree. But if I work hard, and try my best at everything that is thrown at me, I believe that I will one day be successful. “Though it’s no guarantee, a B.A. or some kind of technical training is at least a prerequisite for a decent salary” (Davidson, 2011). A college degree will help you don’t get me wrong, but it is no longer a ticket out of poverty or a guaranteed ticket to middle class.

    Souces

    Davidson, A. (2011, November 23). The Dwindling Power of a College Degree. Retrieved March 30, 2012, from nytimes.com: http://www.nytimes.com/2011/11/27/magazine/changing-rules-for-success.html?pagewanted=all
    N/A. (2011, August 25). Researchers state only 40 Years of Oil and 65 Years of Gas Left. Retrieved March 30, 2012, from http://www.bionomicfuel.com: http://www.bionomicfuel.com/researchers-state-only-40-years-of-oil-and-65-years-of-gas-left/

    • Ann-Sophie,

      Excellent!

      Since we are in an economic crisis, what about having an opportunity? Do you know our society is really about ‘who you know’ versus ‘what you know?’ In you are born into an affluent family in America, doesn’t this fact increase your opportunities versus a poor kid in rural America?

      Professor Green

  4. One fundamental problem that needs to be addressed when speaking of STEM college graduation rates is public school funding. Schools, whose budgets are malleable, have been asked to cut a total of 13.7 percent, on average, since 2007 (Santos, 2011). Principles must make decisions on what programs to cut spending. Science is an expensive program for public schools and just like all other school programs the science department is taking a financial loss. The reduction in spending does not allow for students to use updated tools, instruments, and experiments to help create interest. Many private organizations are trying to tackle the shortfall of STEM graduates by donating to science centers, local public schools, and creating centers designating in promoting STEM. These programs are great for young kids but the root of the problem falls back to government funding, or lack thereof, for public schools.

    Reference:
    Santos, F. (2011, August 17). Lessons in austerity: How principles make budgets work. Retrieved from http://www.nytimes.com/2011/08/18/nyregion/five-new-york-city-school-principals-talk-budget-cuts.html?_

  5. “It is time to restore science to its rightful place, . . . and to wield technology’s wonders to meet the demand of a new age.” That was a quote from President Obama. His quote is hard to achieve when funding to STEM programs are continuously reduced in public schools. The newest initiative is for private organizations to start donating money to STEM programs. The most frequently identified funding sources were grants from private foundations (31.9%) and district-led initiatives (25.9%) (Stemreports, 2011). I would predict that this number will continue to grow in the future because of public school funding being cut and the private sector trying to fill the gaps.

    Reference:

    http://www.stemreports.com/2011/stem-where-is-the-funding/

  6. Chris,

    I couldn’t agree with you more about public funding. With increased support and funding, schools can help improve the education they provide in the fields of STEM, they can strengthen the skills of teachers with additional training, therefore allowing students entering college to have a solid background and foundation in STEM to help propel them towards seeking a career in these fields. According to a new study, “most college students studying for degrees in science, technology, engineering or math make the decision to do so in HIGH SCHOOL or even before. However, only 20% say they feel that their education before college prepared them ‘extremely well’ for those fields, according to a a STEM Survey released by Microsoft and polling company Harris Interactive.

    References:
    Microsoft. (2011). Stem percep ons: Student & parent study. Retrieved from http://www.stemreports.com/wp-content/uploads/2011/09/Microsoft-STEM-Report.pdf

  7. I believe that social mobility is contingent on a person’s ability to compete in the market. Just as businesses strive to have a sustainable competitive advantage, so should individuals. When a person can differentiate his/herself so that he/she is indispensable, this will make his/her more desirable to his/her employers. The more indispensable one is to his/her employer, the greater the chance of social mobility to take place.

    Regarding the sciences, I am saddened hear that less students seem motivated to pursue these careers. According to Dr. Mel Schiavelli’s article “STEM Education Benefits All,” he states, “Innovation today still requires a scientifically literate population and a robust supply of qualified graduates. Unfortunately, a recent report from Tapping America’s Potential (TAP), a coalition of 16 of the nation’s leading business organizations, shows that the U.S. is losing its ability to innovate and, in effect, its ability to compete.”

    This is so upsetting to hear. Are students today not as motivated to keep up with science as they once were? What variables are contributing to this lack of innovation? Perhaps they need more concrete evidence to support that becoming involved in these fields will propel them socially.

    Reference:
    Schiavelli, M. (2005). STEM education benefits all.

  8. The quote by Frederick Herzberg, “If you want people motivated to do a good job, give them a good job to do,” (Glo-Bus. Com, 2012) is a great example of how important it is for manager, supervisors, and CEO’s to make sure they hire the best employees for individual task. If you want to be one of these employees then you need a good education and utilize the knowledge as a tool to help you work hard. Companies also need to incorporate “best practices,” which is any practice that has proved to work particularly well for their products, finances, and strategies. (Glo-Bus. Com, 2012). Our next generation needs to learn that the world does not owe them a living, but rather they have to work for what they want, and a good education helps them achieve their goals.

    References:
    GLO-BUS Premium. (2012). GLO-BUS Premium Business Interaction Game. STRATEGY: Core Concepts and analytical Approaches. Chapter 7, pp 135. Retrieved at http://www.glo-bus.com/DocViwer/# on March 7, 2012.

  9. I agree with the sentiment in this article regarding the decline of social mobility and the widening of the gap between the rich and the poor. As the article alluded, the driving factor for these changes may be the technological change itself, which has decreased the demand for middle skilled workers. An article in the Economist suggests that, “compared with people in other rich countries, Americans tend to accept relatively high levels of income inequality because they believe they may move up over time. The evidence is that America does offer opportunity; but not nearly as much as its citizens believe. Different groups of Americans have different levels of opportunity. Those born to the middle class have about an equal chance of moving up or down the income ladder, according to the Economic Mobility Project. But those born to black middle-class families are much more likely than their white counterparts to fall in rank.” In order to combat this trend, governmental policies must aid in equalizing opportunity for Americans and I believe the best method is through education. President Obama’s college loan bill is a great example of such a policy as it hopes to raise graduation rates.

    April 15, 2010. Social Mobility and Inequality. The Economist. Retrieved from http://www.economist.com/node/15908469


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