THIS BOOK HAS PRESENTED A series of portraits of the contrasting lives of American young people from more and less privileged backgrounds, alongside more rigorous evidence that those personal portraits represent nationwide realities. We have examined the concentric circles of influence—families, schools, and communities—within which today’s youth are growing up, and we have seen how in recent decades the challenges and opportunities facing rich and poor kids have grown more disparate.
This up-close-and-personal focus runs the risk that we miss the deeper connection between the opportunity gap and growing income inequality. From Port Clinton to Philadelphia, and from Bend to Atlanta to Orange County, economic disparities among the families have been an important part of each story. In every movement of this composition the deep, throbbing, ominous bass line has been the steady deterioration of the economic circumstances of lower-class families, especially compared to the expanding resources available to upper-class parents.
To be sure, the link from income inequality to opportunity inequality is not simple and instantaneous. As our cases illustrate, it took several decades for economic malaise to undermine family structures and community support; it took several decades for gaps in parenting and schooling to develop; and it will take decades more for the full impact of those divergent childhood influences to manifest themselves in adult lives. Moreover, this sad sequence started at different times in different parts of America. For example, this process began earlier and has progressed further in nonwhite communities, though it is now thoroughly under way in white communities, too.
These time lags of indefinite duration complicate our ability to draw a simple statistical correlation between inequality of income and inequality of opportunity. This methodological dilemma is not unlike the comparable problem of diagnosing global warming. Decades passed between the invention of the internal combustion engine and the changing chemistry of earth’s upper atmosphere; decades more passed between that atmospheric change and glacial melting; and it will take years more before the sea floods Manhattan and Miami. Those long lags lead inevitably to debate among scientists about the pace and even the reality of systemic change. In both cases—global warming and the opportunity gap—causal links and future projections remain uncertain, but in both cases, if we wait for perfect clarity, it will be too late.
Is upward socioeconomic mobility poised to plunge? The factors for which we have found growing class gaps are precisely the same factors that the economist Raj Chetty and his colleagues have found to be associated with socioeconomic mobility across America today—family stability, residential segregation, school quality, community cohesion, and income inequality. That fact suggests (as this book argues) that those factors are leading indicators of trends in mobility. Chetty himself believes that the early returns from his research show no decline in socioeconomic mobility, but others (including me) are more doubtful that those early results will hold up when the full returns from the younger generation begin to arrive, about a decade from now.1
All sides in this debate agree on one thing, however: as income inequality expands, kids from more privileged backgrounds start and probably finish further and further ahead of their less privileged peers, even if the rate of socioeconomic mobility is unchanged. The economist Isabel Sawhill makes this point eloquently in Getting Ahead or Losing Ground. “As inequality has increased,” she writes, “debate about the extent of mobility in American society has heightened. As income gaps have widened, the opportunity that children have to do better than their parents is increasingly important. . . . Whether they do so at a faster or slower rate than they did in the past is not a settled question. But since the rungs of the ladder are further apart than they used to be, the effects of family background on one’s ultimate economic success are larger and may persist for a longer period of time.”2
Perhaps unexpectedly, this is a book without upper-class villains. Virtually none of the upper-middle-class parents of our stories are idle scions of great wealth lounging comfortably on family fortunes. Quite the contrary, Earl and Patty and Carl and Clara and Ricardo and Marnie were each the first in their families to go to college.3 Roughly half of them came from broken homes. Each has toiled exhaustingly to climb the ladder, and they have invested much time, money, and thought in raising their kids. Their own modest origins—though not destitute—were in some respects closer to the circumstances facing poor kids today than to the circumstances in which their own kids have grown up.
These parents were able to be upwardly mobile in part because the era of their youth was relatively favorable to upward mobility. Though it might seem natural to label them “self-made,” in many unnoticed ways they benefited from family and community supports that are nowadays less readily available to kids from such modest backgrounds. They grew up in an era when public education and community support for kids from all backgrounds managed to boost a significant number of people up the ladder—in Bend, Beverly Hills, New York, Port Clinton, and even South Central LA. Those supportive institutions, public and private, no longer serve poorer kids so well. That is the point of this book.
But most readers of this book do not face the same plight, nor does its author, nor do our own biological kids. Because of growing class segregation in America, fewer and fewer successful people (and even fewer of our children) have much idea how the other half lives. So we are less empathetic than we should be to the plight of less privileged kids.
Before I began this research, I was like that. I’ve worked hard, I thought, to rise from a modest background in Port Clinton—much of the time heedless of how much my good fortune depended on family and community and public institutions in that more communitarian and egalitarian age. If I and my classmates could climb the ladder, I assumed, so could kids from modest backgrounds today. Having finished this research, I know better.
The absence of personal villains in our stories does not mean that no one is at fault. Many constraints on equal opportunity in America today, including many of the constraints apparent in our stories, are attributable to social policies that reflect collective decisions. Insofar as we have some responsibility for those collective decisions, we are implicated by our failure to address removable barriers to others’ success.
But why should the opportunity gap matter for those of us on its lucky side? The answer is that the destiny of poor kids in America has broad implications for our economy, our democracy, and our values.
Poor kids, through no fault of their own, are less prepared by their families, their schools, and their communities to develop their God-given talents as fully as rich kids. For economic productivity and growth, our country needs as much talent as we can find, and we certainly can’t afford to waste it. The opportunity gap imposes on all of us both real costs and what economists term “opportunity costs.”
In 1975 economist Arthur Okun famously formulated what he called “the Big Tradeoff” between equity and efficiency.4 We could pursue policies that would enhance social equity—say, by redistributing income through the tax system—but only at the cost of economic productivity. It is sometimes forgotten that Okun himself argued that this ironclad tradeoff does not typically apply to the pursuit of equality of opportunity. In such cases, there is no such tradeoff, because investment in poor kids raises the rate of growth for everyone, at the same time leveling the playing field in favor of poor kids. That has been the core rationale for public education throughout U.S. history, and much empirical research confirms that premise.5
The costs of underinvesting in poor kids are even greater in an era of globalization, because of a “skills mismatch” between what low-skilled workers can do and what employers need in an age of rapid technological change. This leads, as the economists Claudia Goldin and Lawrence Katz put it, to the “decreased utilization of the less educated” and slower economic growth.6 Our contemporary public debate recognizes this problem but assumes it is largely a “schools problem.” On the contrary, we have seen that most of the challenges facing poor kids are not caused by schools. Drawing on an entirely independent stream of evidence, the economists Daron Acemoglu and David Autor reach the same conclusion: “The U.S. educational system cannot be the sole cause of the waning educational stature of the U.S.”7
It is not easy to put hard numbers on the economic costs of the opportunity gap, but three independent studies, using diverse methods, have arrived at broadly comparable—and surprisingly large—estimates.
• Harry Holzer and his colleagues estimate the aggregate annual costs of child poverty to the U.S. economy. They conclude that “these costs total about $500 billion per year, or the equivalent of nearly 4 percent of gross domestic product (GDP). More specifically, we estimate that childhood poverty each year: (1) reduces productivity and economic output by an amount equal to 1.3 percent of GDP, (2) raises the costs of crime by 1.3 percent of GDP, and (3) raises health expenditures and reduces the value of health by 1.2 percent of GDP.”8
• Clive Belfield and his colleagues focus on what they term “opportunity youth,” that is, young people aged 16–24 who are neither in school nor at work, a group that largely overlaps with the kids from poor, less educated homes who are the focus of this book.9 Belfield and his colleagues painstakingly estimate both the annual and lifetime costs imposed on taxpayers for each opportunity youth. They then do the same thing for the burdens imposed on society as a whole (for example, the private costs of crime or the costs of slower aggregate growth) for each opportunity youth. Their analysis is so comprehensive that it even recognizes the seeming “cost savings” to the educational system that we currently enjoy because these kids have dropped out. The total costs they itemize, as summarized in Table 6.1, are staggering.
Table 6.1: Economic Costs of “Opportunity Youth” (Belfield et al., 2012)
|
Taxpayer burden |
Societal burden |
Annual (per youth) |
$13,900 |
$37,450 |
Adult lifetime (per youth) |
$170,740 |
$529,030 |
Aggregate lifetime burden (in present value terms) from the current cohort of opportunity youth |
$1.59 trillion |
$4.75 trillion |
Roughly two thirds of these costs reflect lost earnings, lower economic growth, and lower tax revenue, while less than 5 percent reflect the costs of “welfare” programs. Even if we harden our hearts and simply leave these poor kids to fend for themselves, we will still have to reckon with the lion’s share of these costs, because these kids will not be contributing to the national economy.
• Finally, Katharine Bradbury and Robert K. Triest summarize previous studies that have shown that inequality of opportunity slows growth by keeping disadvantaged potential workers from developing their full capacity. Then, comparing the social mobility and growth rates of different metropolitan areas in America, they find that social mobility appears to speed economic growth beyond what would have been predicted on the basis of standard growth theory. If the Atlanta area (which has low intergenerational mobility) were to increase its mobility to match the rate of the Salt Lake City area (which has high intergenerational mobility), that would increase the 10-year growth rate of real per capita income in the Atlanta area by an estimated 11 percentage points. If the Memphis, Tennessee, area increased its rate of intergenerational mobility to match the rate of the Sioux City, Iowa, area, the estimated 10-year growth rate of real per capita income in Memphis would jump by an estimated 27 percentage points.10
Further research will no doubt refine these numbers, but the estimates are serious and thoughtful. Moreover, the estimates are surprisingly convergent on the key point: Writing off such a large fraction of our youth is an awfully expensive course of inaction.
Estimating the high costs of inaction does not tell us what actions to take to avoid those costs, nor what the costs of those remedial actions would be—though, to take a single example, the Nobel Laureate economist James Heckman has estimated that even expensive investments in early childhood education would yield real rates of return (approximately 6 to 10 percent) that outstrip long-term stock market returns.11 Even acknowledging the back-of-the-envelope nature of these calculations, one can’t help concluding that ignoring the plight of poor kids imposes a substantial economic burden on all of us. And ignoring it, of course, doesn’t make it disappear.12
These statistical findings rhyme perfectly with the life stories we’ve examined in this book. For example, David in Port Clinton is a decent, hardworking kid—taking responsibility for his eight half-siblings as well as his own infant daughter, and trying to eke out a living in a succession of part-time, low-wage jobs. But he is held back by his juvenile criminal record, inadequate schooling, the malign influences of his family and community, and the limited economic options open to him. Rather than contributing to a revival of the Port Clinton economy, as he would like to, he’s unintentionally imposing costs on the community’s resources—both real costs and opportunity costs. Without some help from the rest of us, he is likely to do so for the rest of his life. Broadly speaking, the same is true of Kayla, Elijah and Michelle, Lola and Sofia, and Lisa and Amy. If we could begin to close the opportunity gap, these kids could become not a drag on our economy but contributors, as they wish to be.
To say that the Okun tradeoff is not inevitable does not mean that there is never such a tradeoff. We can easily imagine redistributive schemes that might entail unacceptable costs to social productivity. This is in the end a pragmatic issue: When does a particular effort to promote equality of opportunity entail unacceptable costs? A reasonable assessment is that America today has plenty of scope for simultaneously enhancing equality of opportunity and economic growth. But in order to achieve those results, we have to make significant investments now.
The essence of democracy is equal influence on public decisions.13 A representative democracy requires at least widespread, if not universal, voting and grassroots civic engagement. The more that other means of political influence, such as money, are powerful and unevenly distributed across citizens, the more important electoral and grassroots involvement becomes for ensuring some approximation to democracy.
That more educated and affluent citizens participate more actively in public affairs, and have more political knowledge and civic skills than their impoverished, ill-educated fellow citizens and are more likely to take part in virtually all forms of political and civic engagement, is one of the most robust findings of students of political behavior. So what are the implications of the growing opportunity gap for American democracy? Rich kids are more confident that they can influence government, and they are largely right about that.14 Not surprisingly, poor kids are less likely to try.
The U.S. Census Bureau periodically asks a national sample of Americans about their civic involvement, including whether they have recently discussed politics, belonged to a voluntary organization, attended a public meeting, engaged in a boycott or “buycott,” worked with others to fix a neighborhood problem, and contacted a public official. Figure 6.1 summarizes the frequency of such activities among young adults aged 20–25 in 2008 and 2010. More than twice as many high-school-educated youth are completely detached from virtually all forms of civic life, compared to college-educated youth, while more than twice as many college-educated youth engage in more than one of these activities.15