Bursting Bubbles Left and Right (Updated)

An op-ed by Isabell Sawhill and Ron Haskins of the Brookings Institution skewers a number of articles of faith about opportunity in the United States held by Democrats and Republicans alike. The quintet of popular misconceptions are:

  1. Americans enjoy more economic opportunity than people in other countries. In this country if you’re poor you’re likely to stay that way, if you’re rich you’re likely to stay that way, and if you’re in the middle you can go up, go down, or stay in the same place with about equal odds. The U. S. is more congenial for immigrants than most European countries, however.
  2. In the United States, each generation does better than the past. This all depends on how you measure things but what the statistics really support is that many middle income American families have kept a tenuous foothold on what we think of as a middle income lifestyle by working more hours outside the home. Obviously, there are limits to that as a strategy and we’ve probably reached them.
  3. Immigrant workers and the offshoring of jobs drive poverty and inequality in the United States. More important is the increase in the number of single parent homes.
  4. If we want to increase opportunities for children, we should give their families more income. Giving people money won’t do the trick:

    Our research shows that if you want to avoid poverty and join the middle class in the United States, you need to complete high school (at a minimum), work full time and marry before you have children. If you do all three, your chances of being poor fall from 12 percent to 2 percent, and your chances of joining the middle class or above rise from 56 to 74 percent.

  5. We can fund new programs to boost opportunity by cutting waste and abuse in the federal budget. This is flat out false. There is no budget item for waste, fraud, and abuse and although all undoubtedly exist there’s little reason to believe that the savings we’ll realize by eliminating them will be less than the cost of uncovering them. That doesn’t mean we should abandon efforts to eliminate waste, fraud, or abuse. It means it will take much, much more to fund our programs. Indeed, there’s no realistically foreseeable level of growth or increased level of taxation that will enable us to pay for the programs we’ve already got.

No comfortable nostrum will save us from the hole we’ve been digging for ourselves over the period of the last forty years. In my view there’s a desperate need to reevaluate the role of government, what services government provides, and how those services are provided. Ideological approaches, regardless of the ideology, will only make things worse.

Update

James Joyner picks up on the same op-ed and remarks:

The poor, by and large, are those who have made bad decisions: Dropping out of school, having children out of wedlock, and been satisfied with government supported subsistence living. Their children, in turn, are trapped in the same pattern of behavior by being surrounded by a culture that sees these things as the norm and actively discourages responsible behavior.

While I agree with this broadly I think the reality is somewhat more complex. It’s the incentives.

Many of the poor live in nearly self-contained communities and their exposure to the breadth of possibilities in the United States is really quite limited. There are places where the only lives that the kids can imagine for themselves are pimp, prostitute, hustler, professional athlete, performer, or cop. Becoming an accountant or a hospital administrator is unimagineable.

18 comments… add one
  • #1 needs a definition of rich and poor. We had a very nice comfortable middle class life style in the 1970s–today, that would be poor by all definitions of material and housing goods. The entitlement programs stifle movement–either up or down.

  • The authors don’t provide a definition of poor but they do provide one for middle class:

    We define middle class as having an income of at least $50,000 a year for a family of three.

  • It seems to me that the more government interferes to fix outcomes, the less mobility there will be between classes. After all, if outcomes are fixed, why would they vary?

  • Their last point that there is insufficient waste to fund new programs contains inside it an impoverished definition of waste. If you define as wasteful the bottom 10% of government spending, there’s plenty of money to chop off the bottom and innovate new approaches. I think that an “up or out” theory of government programs where you have to constantly improve in delivery in order not to be cut would be of tremendous benefit to the country. There is nothing that keeps us from embracing a theory like that except that our ‘betters’ have decided that such an approach is inconceivable.

  • My experience has been that bureaucracies tend to prefer what’s easy to administer over what’s effective. Since so many of our politicians are career bureaucrats, that tends to preclude any process of continual improvement. It’s not so much that it’s inconceivable as that it’s not as easy to administer as the Christmas tree approach that our government programs tend to assume.

  • Isn’t this list contradictory? When they say we dont have economic opportunities because…

    “In this country if you’re poor you’re likely to stay that way, if you’re rich you’re likely to stay that way….”

    and then say…

    “…Our research shows that if you want to avoid poverty and join the middle class in the United States, you need to complete high school (at a minimum), work full time and marry before you have children…”

    What? in this country we don’t give people the opportunity to finish high school or marry before they have children?

  • The way I interpret it, Rich, is that too few of the poor finish high school, work full time, and postpone children-bearing until after they’re married. The obvious rejoinder to this is that isn’t that a matter of personal choice and responsibility? Yes, that’s the point.

  • I agree…but that isn’t the same thing as saying the opportunity doesn’t exist. (I didn’t start the semantic argument, they did. lol)

  • Andy Link

    There is a problem with causality there I think. Are those factor really enablers to reach the middle class, or are they simply effects?

    It reminds me of the argument that single-payer advocates use – that the single-payer model is the reason why health care is so much cheaper in other countries, ergo if we get single payer here we’ll get the same result.

  • In this country if you’re poor you’re likely to stay that way, if you’re rich you’re likely to stay that way, and if you’re in the middle you can go up, go down, or stay in the same place with about equal odds. The U. S. is more congenial for immigrants than most European countries, however.

    I read somewhere that if you finish high school, don’t get married too soon, and only have kids once you are married ending up “poor” is really not all that easy. Chances are if you are poor and staying poor you might have violated one or more of the above conditions and changing them anytime soon would indeed be tough (especially the children one since you are responsible for them for at least 18 years).

    This all depends on how you measure things but what the statistics really support is that many middle income American families have kept a tenuous foothold on what we think of as a middle income lifestyle by working more hours outside the home. Obviously, there are limits to that as a strategy and we’ve probably reached them.

    This is extremely hard to measure, indeed I’d say it is fundamentally impossible at least to any degree of certainty. See what is the ideal unit of measure is utility, but how do you measure that? Reminds me of that scene in Back the Future where Doc Brown sticks the suction cup on Marty’s forehead in an attempt to read his mind.

    I have things my parents probably didn’t even think of outside of science fiction novels and movies. DVDs, hi def TVs, cell phones, computers, etc. How do those work in any calculation of well being/welfare? Beats the heck out of me. Hell we even have a hard time figurig out how these things impact price indices let alone welfare.

    More important is the increase in the number of single parent homes.

    Quite true, but we often engage in policies that encourage singel parent households. I’m thinking Sawhill and Haskins would not be in favor of scaling those programs back.

    Our research shows that if you want to avoid poverty and join the middle class in the United States, you need to complete high school (at a minimum), work full time and marry before you have children. If you do all three, your chances of being poor fall from 12 percent to 2 percent, and your chances of joining the middle class or above rise from 56 to 74 percent.

    Heh, I was thinking of James Q. Wilson in my opening observtion on this point. Anyhow, here is one policy implication:

    Stop providing free daycare to young mothers who get pregnant while still in school. This lowers the cost of teenage pregnancy and basic cost/benefit analysis says you’ll end up with more teen mothers, not less. Don’t offer subsidized housing, food, and education. All for the same reason. As we’ve become more and more willig to engage in these policies teen motherhood has risen. And the same would apply to young adults (say 18 – 24). The more you subsidize something the more of that something you get. Subsidize teen motherhood and we are shocked that we get more teen mothers?

    What the authors are really saying here is that making piss poor decisions will make you poor. Big shock. But we also have policies in place that render piss poor decisions less burdensome.

    We can fund new programs to boost opportunity by cutting waste and abuse in the federal budget.

    Every. Politician. Says. This.

    Ever. Politician. Pledges. To. Cut. Waste. Fraud. And. Abuse.

    And none EVER succeeds. It is the scoundrels promise, IMO.

    No comfortable nostrum will save us from the hole we’ve been digging for ourselves over the period of the last forty years.

    Absolutely right. And look who has been in charge: Democrats AND Republicans. I find it so amusing to see the partisan bickering when in reality it is both parties that are doing us in.

  • Andy Link

    Steve,

    I remember my teenage years pretty clearly and I seriously doubt that upping the cost of pregnancy will do much. There was no calculation that entered my head, that’s for sure. I was…focused…let’s say on other matters, if you catch my drift. The point being is that teenagers, as a group, do not focus on negative consequences as much as we’d like to believe they do.

  • Andy,

    The evidence does not bear it out. In the 1950’s and 1960’s teenage pregnancy was frowned upon and was not supported by the state. Now it is practically celebrated and supported by the state. Back in the 1950’s and 60’s teenage pregnancy wasn’t the issue it is today. A change in our views on the problem and our willingness to subsidize it is the most likely explanation. Ockham’s razor and all that.

  • Steve, the rate of teenage pregnancy was significantly higher in 1950 than it is now. However, the rate of teenage marriage was a lot higher, too.

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