Tuesday, September 25, 2012

America: A Meritocracy?

The New York Times recently asked, "Should people who have had no financial help from their families get more credit for their accomplishments than people who did?" 
Americans cherish the idea that we are a meritocracy, that solely through our own efforts, the cream rises to assume their rightful place atop American society, while the poor and destitute obviously deserve their position, because if they had worked harder, they would have risen ahead.  Mitt Romney believes this, and says that he is a self-made man, that he didn't inherit anything. 
Contending that he is a self-made millionaire who earned his own fortune, Romney insisted, "I have inherited nothing." He remarked, "There is a perception, 'Oh, we were born with a silver spoon, he never had to earn anything and so forth.' Frankly, I was born with a silver spoon, which is the greatest gift you can have: which is to get born in America." 
Romney apparently doesn't count the connections he has made by being the son of a governor, his privileged upbringing, nor the money in the form of stock options he was given to help he and his wife pay their way through school. While technically Romney did not inherit anything from his father, he used his father's estate to donate to the Mormon Church and to pass the money along to his children, and thus avoid estate taxes. The fact is that rich parents can help out their children in a way that poor parents can't, and such structural factors prevent poor kids from being able to enter into certain fields. These structural barriers then prevent people from moving into a higher social class than their parents.

America is no longer the land of opportunity.  People have trouble moving to a higher social class than their parents. 

Especially in the United States, people underestimate the extent to which your destiny is linked to your background,” says Fabian Pfeffer, a sociologist at the U-M Institute for Social Research (ISR)...Research shows that it’s really a myth that the U.S. is a land of exceptional social mobility...
He found that parental wealth plays an important role in whether children move up or down the socioeconomic ladder in adulthood. And that parental wealth has an influence above and beyond the three factors that sociologists and economists have traditionally considered in research on social mobility – parental education, income and occupation.

“Wealth not only fulfills a purchasing function, allowing families to buy homes in good neighborhoods and send their children to costly schools and colleges, for example, but it also has an insurance function, offering a sort of private safety net that gives children a very different set of choices as they enter the adult world,” Pfeffer says.

There are now huge financial barriers to "full adulthood", and only middle-class parents and above have the resources to help their children set aside those barriers.  College tuition is extremely high, and home ownership, thanks to tightened lending rules, is very difficult.  Even couples deciding to have children has decreased, in part due to financial considerations.  But having wealthy parents help you along the way can change everything:

Some parents help their adult children financially, while others cannot or do not.

This living inheritance comes in many forms. It exists along a range from the free room and board for a 23-year-old intern to a stay of years for a 43-year-old single parent who has lost a job or recently divorced. The contribution can be as small as a first month’s rent or as large as the 25 years of payments that many parents now make on college loans they took out so their children would not have to.

The less help you have as an adult starting out, the harder you have to work to make the next geographic, career and economic step up. If you lack that help, any and all mistakes (and there will be plenty) often have much bigger consequences. And the lack of any family help can have a compounding effect on the millions of people who have negative net worth well into adulthood thanks to their student loan debt.

In certain respects, it’s bewildering that this is our current state of affairs. How can it be that the more tuition costs rise, the fewer opportunities there seem to be for educated people in their 20s and 30s to move seamlessly into jobs that offer health insurance and pay enough to cover their living expenses?

Another author muses about how lack of familial wealth acts as a entry barrier into certain fields.  The author tried to break into the journalism field, but found that it now relies heavily on unpaid internships to select their job candidates.  People that have student loans, or whose families are unwilling to give money or assistance to them have an impossibly difficult time breaking into the field. 

To be a writer in this market requires not only money, but a concept of “work” that is most easily gained from privilege. It requires a sense of entitlement, the ability to network and self-promote without seeing yourself as an arrogant, schmoozing blowhard. And it requires you to think of working for free—at an internship, say, or on one of those gratis assignments that seem to be everywhere now—as an opportunity rather than an insult or a scam.

This is no longer an industry that rewards working-class values, in other words, and I underestimated how hard it would be to shuck them. It still seems strange to me that people work, unpaid, without a guaranteed job at the end. And I haven’t reconciled myself with the central irony here: that journalism, ostensibly a populist endeavour, is becoming a rarefied practice best suited, both financially and psychologically, to the well-off.
Does the fact that wealthy parents can help their children lead to more income inequality?  Are we creating a gentry class within the United States, into which those who were not born into it have an almost impossible time breaking in?  Should estate taxes be even higher to take away the advantages that the wealthy pass on to their children?  Isn't this partly what government is for, to level the playing field for those who were not born into advantage?  How much help did you have from your parents up to this point?


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  2. There is no question in my mind that having parents who are well-off and educated is a huge benefit to kids. You get a privileged foundation in so many ways. That foundation starts with being more likely to get prenatal care, and continues right on through not being hugely in debt when you graduate from college and/or grad school and to getting inherited wealth which allows you to buy a house, start a business, etc way earlier than if you had to earn your way into your money.

    Then there is the impact that monetary stress has on everybody in a family, and the different choices you may make because of that stress (everything from sending a kid to school sick because you can't afford to miss work to choosing neighborhoods and day care/schools, etc etc).

    I will add that from my experience, having teachers as parents is a pretty big benefit, too, because they have a lot of experience with and interest in kids, and they are well-educated. But I'm assuming if your parents were rich teachers, you'd get all that and the rest of the monetary privilege.

    P.S. Romney is SO unlikable. Just admit it, dude. You had privileges. Not admitting it makes you seem clueless or like you are lying. The first step is admitting you come off as a pompous windbag.

  3. The whole thing about privilege is that you have a very hard time seeing it if you are the one benefiting from it. It is "just the way things are", and you don't see a particular need to change it, especially if you might be in a worse off position from the change. Romney's solution to not being able to afford college? Borrow from your parents. You don't have the funds to start up your business? Borrow from your parents. The idea that some people's parents cannot function as ATMs seems unthinkable to Romney. Which is very dangerous, from a policy perspective.

  4. But the thing is: dude has been running for president for roughly 6 or 7 years. He hasn't seen or heard anything that might make him think he's privileged in that time? Seriously? Or does Ann do all the talking to the regular people, like she does to the women people?

  5. Well, Romney knows that he's wealthy. But as far as he's concerned, he's earned every penny by himself, and he did not rely on his parents for their wealth. The ways in which his parents wealth ensured his own is somewhat invisible to him, as it is to a lot of people. Sure, they sent him to good schools, but he had to earn the grades, and yes, they paid for college, but he had to get in. They may have given him start up funds, but he was the one who had to hustle, etc. The fact that those who didn't have those gifts from their parents have to work even harder is an invisible part of the equation, and one many in America don't like to talk about. It cuts directly across the image that Americans have of themselves as rugged individuals who made it all on their own, without any help from anyone.

  6. That's willful ignorance. I might have patience for that if I didn't acknowledge the people who have helped me, but I do, so he strikes me as a self-centered, spoiled brat. His parents gave him things, they presumably worked hard to do so, and his dad was on public assistance for a time. The honorable thing to do would be to acknowledge that his father and mother worked hard to give him advantages - with help from the government, and he used them. Why is that hard to admit? Unless it undermines your entire rationale for policy... ;-)

  7. Hey YBGP,

    Joe here, your friendly neighborhood conservative, to offer the "right" take on this issue. I don't think most conservatives would disagree that people born to well-off parents have advantages and privileges that are not enjoyed by kids born to poorer parents. What I DO think conservatives would say, at least what I would say, is that those advantages are neither necessary nor sufficient for later "success." Whatever the statistics say about upward social mobility, there are enough anecdotal stories of people rising from very difficult circumstances to become very successful in life to know that the obstacles imposed by poverty cannot be overcome. And I also know of many instances where kids are born into privilege and squander those advantages, while siblings raised with exact same advantages prosper.

    The other thing that I think many conservatives would say is that wealth is just one part of the picture when you're talking about kids growing up with different advantages or disadvantages. As Emily notes, parental involvement and interest in kids and their education is a huge factor. But it's not just about interest in their education, but the quality of parenting in general - the habits they instill in their children, the values they emphasize,etc. Family situation (i.e. divorced parents, single-parent homes) can have a huge effect too. Community and peer population has a tremendous influence on kids as well. I believe that all of these other factors are a much bigger drag on the future prospects of poor kids than the pure wealth disparity. Unfortunately, government can't really do much about those imbalances. Addressing them has to come from the bottom up. I think conservatives feel the biggest area that has a big effect on kids, and that government can actually do something about, is education. And there, I don't think you can fault conservatives for trying to do something - you may disagree with the efforts as a policy matter, but vouchers, charters, school reform are all being pushed forcefully by conservative elected officials as a way to help lift poor kids out of poverty and "level the playing field."

    In any case, I do think conservatives would fundamentally disagree that a primary function of government is to "level the playing field" through re-distribution of wealth or otherwise. I think most conservatives would say the government's responsibility in this area is to not affirmatively place any obstacles in the way of meritocracy, but otherwise let things play out, because how can government look into each individual's life, accurately determine what advantages or disadvantages they have, to what extent their success (or lack thereof) is attributable to their own actions versus external factors, and then take remedial action to "level the playing field" for each person? In the words of Thomas Jefferson, "a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities."

    Last point, I've heard the estate taxes argument many times, but if the object is to prevent wealthy people from giving their children advantages, why wait until they die to step in? Why not tax them at 70, 80% while they're living? Why not force everyone to attend the same schools? Why not limit the ability of parents to lend or give money to their children? By the time rich people die, their children are already adults themselves, well on their way to a life of undeserved success. If you really want to break the cycle, you have to start when the kids are young.

  8. I would argue that in recent years a certain amount of wealth is necessary (but not sufficient) to break into many fields, especially ones that rely on unpaid internships, like journalism, publishing, fashion, etc. You need money from an outside source to fund you during those long years of unpaid work, where you are also expected to put in a good number of hours. And these fields did not always rely on unpaid labor, but as they have become more "glamorous" and thus prestigious, the amount of money a person needs have heightened.

    Last point, I've heard the estate taxes argument many times, but if the object is to prevent wealthy people from giving their children advantages, why wait until they die to step in? Why not tax them at 70, 80% while they're living? Why not force everyone to attend the same schools? Why not limit the ability of parents to lend or give money to their children? By the time rich people die, their children are already adults themselves, well on their way to a life of undeserved success. If you really want to break the cycle, you have to start when the kids are young.

    Actually, I agree with this. I do think raising the estate tax would in some ways be fruitless because of the reasons you have outlined. But if nothing else, it could at least "flatten the top" a little, where money and privileges become truly entrenched and self-reinforcing, with no hope of anyone else being able to break in.

  9. Even The Donald got where he was due to tax-breaks and by taking rapacious advantage of any possible loophole that came his way. We simply cannot 'do it alone', even if it's not our parents' contributions that propel us. Student loans and other social policies pave the way. Romney likes to ignore this too, while making noises that he's going to reduce social programs right and left. That frustrates me a lot.

    In grad school, I wrote a paper called "The Myth of the Meritocracy". I wish I could find it now...

    I sometimes wonder what profession I would have chosen if my parents had been able to provide a 'safety net' for me. It was brought into sharp relief when I found out what a childhood acquaintance was doing; photojournalism. Apparently she gets to travel and do lots of cool things, whereas I am thrilled at a steady paycheck and health insurance. I guess there are always trade-offs, but what if I hadn't had to go to a public, state-school?

  10. "How can it be that the more tuition costs rise, the fewer opportunities there seem to be for educated people in their 20s and 30s to move seamlessly into jobs that offer health insurance and pay enough to cover their living expenses?"

    This question chills me.

    I was just chatting today with someone, recalling how dismal the job market was supposed to be when I graduated (with a BA) in 2003. The attitude at the time was "The joke may be on them; they just finished a degree, but there may not be a job for them." What would that commentary sound like today? It's certainly not funny any more!

  11. Yeah, the issue is partially what we want the government to do, but I think if we are a representative democracy, probably we want there to be opportunity for everybody - I feel like that's the big part of the American Dream. I actually don't fault like George Bush on education, I do Romney, because he isn't for actually using the federal government to do much of anything for education. I am open to charter schools in a way I wasn't when I was younger, but vouchers just can't work with how very high private school tuition is in most places.

    TJ was awesome, but he lived before the industrial revolution, and before we abolished slavery, so his view of government is out of date. I suspect he would have a different take were he alive today. Remember TJ thought we needed a revolution every 20-30 years. By this I'm pretty sure meant something like what the French do - throw everybody out every 10-20 years and head in the opposite direction. I guess you could argue we do something close to that, too. Hamilton actually had a better idea of where our country was going, it turns out - even though I've always liked TJ more.

    We should have a straight progressive income tax, no deductions, and a moderate inheritance tax (not nothing, but probably less than 51%). But how do you get there? The interests are extremely vested, and I actually applaud the attempt made in the 1980s, but I know a number of people who were there then, and they say you got right up to the edge of getting rid of the deductions and people just freaked out. It would be so much better for most people to have an administratively easy system, and it would save the government quite a bit of money. It would suck for accountants. And lobbyists. And probably folks like Romney.

    The real question I have about college and meritocracy is one about how much money colleges really need to be exceptional. The hubby thinks if we moved towards more of a universal college idea with limited tuition that our schools would plummet in quality. We do have the best colleges and universities in the world. So how do we craft a system whereby our colleges are still awesome, but people can afford them without becoming indentured servants to their student loan companies? Obama's changes are good. But they don't solve the underlying problem: when middle-income and lower-income families have to sacrifice hugely to send a kid to college and/or the kid does, it puts tremendous long-term limits on achievement and success. Which means it takes like 2 or 3 generations out of working-class rather than one - if you're lucky, work hard, and nothing too big goes wrong.