Why it's harder to earn more than your parents

i look down on him because i am upper class i look up to him because he is upperclass i know my place [Music] in the 21st century you might think climbing the social ladder has got easier but actually it's getting harder [Music] in many rich countries the class you're born into still dominates your chances of making it no one talks about these sort of hidden privileges that are going on underneath the surface even in america the so-called land of opportunity your chances of climbing up the income ladder are some of the lowest in the rich world what the data suggests is that we're not such a land of opportunity after all this lack of social mobility is causing serious political rifts when people feel they just don't have a shot that's what leads to disaffection it leads to radicalism in politics so what's gone wrong and what can be done to improve social mobility [Music] so this is where i grew up feels like a lifetime ago to be honest as a child sophie pender lived on a council estate and says hardly anyone thought she would make anything of her life it's hard to expect anything from someone who has grown up where their dad is an alcoholic and a drug addict i think people just expect them to follow the path that their parents have taken but sophie has defied expectations she now works for a top law firm and is passionate about helping working-class people to get ahead people have felt comfortable insulting me because in their mind they think well if you're working class you can change that the onus is on you if you live on a council state that's your fault but actually it's a whole host of factors that mean that someone might not have had you know the opportunities available to them sophie is the exception to the rule britain has a social mobility problem if you're born at the bottom here your chances of moving up the income ladder are lower than in many other rich countries there's just a 9 probability of moving from the bottom of the income ladder to the top it's even lower in america but to put that in context you're almost 50 percent more likely to make it to the top if you live in places like canada or denmark this is known as relative social mobility part of the reason for these differences is the level of wealth income inequality and welfare provision in each country i think america is the poster child for rising uh income and wealth inequality the way i like to think about it is that when you have a lot of income inequality the rungs on the ladder of opportunity are much further apart and that makes it harder to climb that ladder those at the very top of the ladder have also pulled away from everyone else in 1975 the share of taxable income going to the top 1 in america was 9 by 2018 that had more than doubled and declining social mobility is bad news for american society the fact that if you are not from that privileged background that you feel like your kids are set up for failure to some degree that's a very powerful political impulse and a real source of energy for populist movements on the left and the right not just in america but also across the world it used to be much easier to get ahead september 2nd 1945 and america's joy bubbled over into unrestrained jubilee after the second world war countries such as america and britain enjoyed a social mobility boom government is big business but far from the only one an expansion in professional and managerial jobs allowed many working-class people to move up the income ladder and as a result if you were born in the post-war years in america you had a 90 chance of making more money than your parents a picnic it's for the children but this didn't last from a high in the 1940s absolute mobility has been falling and the generation of children born in the 1980s had just a 50 percent chance of making more money than their parents one team of economists have dubbed this phenomenon the fading american dream since the second world war in america absolute mobility has declined and those chances have declined uh pretty steadily for each younger generation in america so if you're part of the millennial generation uh you should be pretty uh disturbed by all of this [Music] there's one divide which has become especially significant whether you've been to university or not in rich countries there has been an economic shift away from manufacturing towards more service-based industries which means there are now fewer openings for those without a degree education has now become the new determinant of people's incomes and life chances much more than it was 50 or 60 years ago now that revolution has minted winners particularly in highly paid service sector jobs doctors and lawyers for the lower and middle class it condemns them to a bit more of a precarious financial situation so what can be done to bridge this social divide and widen access to higher education [Music] in britain a new breed of state schools like this one have sprung up catapulting kids from lower income families into top universities so now let's solve this problem and then talk about what that k value means in the context the ncs is located in newham london's second poorest borough while nearly half the students here are on bursaries or qualify for free school meals an indicator of deprivation last year 95 went on to top universities in britain we're humans we have the same capacities we should be able to do the same thing most will be the first in their family to get a degree let alone one from an elite university my parents haven't gone to university so i didn't really have like mentors to guide me and like now me aspiring to go to like oxbridge that's a huge deal coming from like a working-class background like immigrant parents they really like to push the education thing so much because they want their sacrifice to matter they want children to break the class barriers that maybe maybe acted as an actual barrier for them head teacher moss in ismail grew up nearby and left a six-figure salary as a lawyer to run the school he is passionate about boosting social mobility where you're born shouldn't dictate where you end up and just because you're not born with a silver spoon in your mouth but if you're talented you should be able to realize your potential he keeps the school's performance in constant view on his office window he says improving students life chances means running a so-called super curriculum as soon as you hit this wall and go outside of the box the potential energy is infinity and today it's quantum mechanics i think the difference between what we do and what other schools may lack is the forensic focus on the fundamentals being unashamedly academic unapologetically ambitious for our young people it probably helps that the school only takes the very brightest last year they had 4 thousand applications for 300 places how many pieces of clothing and schools like this are starting to make a difference by challenging private fee paying schools bastions of britain's class system you're not so clever [Music] schools like eaton college have long been pilloried in comedy sketches like this for disproportionately feeding britain's elite [Music] just over a third of the nation's prime ministers were educated there but private schools hold over elite universities is declining in 2016 around 40 percent of uk admissions to oxford and cambridge came from private fee paying schools despite the fact that only a small proportion of children attend them but by 2020 that figure had dropped to near a thirty percent we need to have the largest uh possible attempt to drill down in societies to find talent wherever it is the hidden einsteins as it were and i think this is one area where britain is doing quite well compared with the united states america is one of the only countries in the world to have legacy admissions where colleges can actively discriminate in favor of the children of alumni 43 of white students who graduated from harvard between 2014 and 2019 didn't get in on academic merit alone this helps perpetuate a cycle where if your parents are wealthy you're more likely to graduate than if your parents are poor and did not go to college what they've created in america is a national ruling class based on educational certificates they're absolutely obsessed by educational credentials if you're unfortunate enough to look at the social pages of the new york times it's full of saying that so-and-so with a degree from harvard and married so and so credentialism has become the new mark of being a member of the upper classes in america there have been some high-profile efforts to equalize the system of university admissions [Music] kavika smith has been at the forefront [Music] oh hi honey good to see you it is good to see you how's the community been we're trying to build more people like you yes there's not enough being done to help low-income students in america growing up he dreamt of going to ucla but didn't get the grades he needed in his sats the standardized tests used in college admissions it's a money gimmick sats were first introduced in 1926 as a way of increasing the pool of people admitted to harvard but it didn't work out like that in recent years asian and white students have consistently done better on the tests than black and hispanic students and wealthier pupils also outperformed their poorer peers [Music] according to the most recent data a student with a family income under twenty thousand dollars can expect to score 136 points less on their writing sat than someone with a family income of over two hundred thousand dollars it is susceptible to being prepared for so access to test preparation and particularly expensive test preparation is disproportionately available to students from higher income families and it's really not a level playing field at all along with a coalition of community groups kavika took the university of california to court over its use of sats and after a lengthy legal battle the university dropped the tests from its admissions process the university of california system will no longer consider sat scores for admission it could reshape the college admissions process across the entire country but the result came too late for kavika who never made it to ucla the lawsuit was never about me it was affirming because i knew that generations coming after me will no longer have to experience that level of discrimination many more colleges are now reconsidering their use of sats and legacy admissions policies but some argue tinkering with the admission system will do little to improve deep rooted inequalities a lot of the emphasis focuses on elite institutions i think that that misses the point for inequality poverty the composition of uc berkeley student body i think matters substantially less than we seem to think it is more important to think about disparities in graduation rates from high school than it is the sort of composition of elite student bodies the young people of today deserve the same opportunity to earn success and accomplishment you have a better chance of improving social mobility if you start young kids from wealthier families tend to outperform lower income children as early as primary school but there is a simple way to boost young children's chances and it was demonstrated in this small island nation [Music] the story began in the late 1980s [Music] so at that time i would say there was a lot more poverty than there is now some of the homes that we went into they were really really very poor christine and novalette were part of a pioneering scheme to help some of the poorest children get ahead so we're here with the toys as health workers they would visit families every week bringing homemade toys and games once i see in your uniform mm-hmm always looking out for you you know i said sinners come in nurses here these are the original toys they brought door to door many made from household rubbish [Music] you would ask the child if they know any of the pictures and most of them would know ball because you know jamaicans are into football so every little child knows a ball this is made from old socks the mother's reactions were mixed there were a few wondering what am i going to do with these things seeing that they were made out of plastic bottles and so on but after a few visits they loved it [Music] the scheme was the brainchild of physician sally grantham mcgregor who was working in kingston at the time nobody appreciated the importance of play there were no books there were no toys the children were just sitting there in the backyard we called them the yards doing nothing they had nothing so that's where i was coming from to try and improve equity a little bit the homemade toys and books help the kids to develop language and cognitive skills what was unique i think was that we wanted to work with mothers and we wanted to make it as cheap as possible but still effective [Music] i feel very proud because i see that other people can come and you know doing the same thing that we used to go and do and they are benefiting from it sally's team together with economists followed the children who had taken part in the experiment the results were extraordinary 20 years after the experiment the children were earning 25 more than the control group and at the 30-year follow-up they now earned 43 more per hour i mean at the time when we started i was just desperate to make an improvement at all but with the long-term follow-up showing such benefits it's incredibly encouraging the challenge now is to do it at scale reach more children versions of the jamaica program have now been set up across the world one of the most recent is in china [Music] thanks to rapid industrial development many people here have lifted themselves out of poverty meaning the country has a high rate of what is known as absolute mobility but your chances of moving from the lowest rungs of the income ladder to the top are still very low it's possible to have a society with high absolute mobility but still very low relative mobility and you can think of emerging market economies like india and china [Music] china in particular has taken 800 million people out of extreme poverty in the last few decades but it's an incredibly unequal society as well it's not just when and what you're taught as a child which can determine your life chances it's also where you're brought up [Music] in america even moving a few blocks can make all the difference this is the street i lived on it literally looks like an alley dawn used to live in one of the poorer areas of seattle you kind of feel worthless you know being here you don't think much of yourself being here but thanks to a groundbreaking program she has moved to a new part of the city it's like the kids who made fun of me in sixth grade saying that you microwave your chicken to warm it up it partly kind of saved me a little bit because it has finally allowed me to feel like things are getting better that all everything that i've been doing all these years are leading up to a better life under the scheme people who receive housing vouchers to help cover their rent are supported and helped with the costs of moving to areas of greater opportunity [Music] it's part funded by the gates foundation and based on the work of a group of economists using decades of data from the census bureau they built a so-called opportunity atlas for america it's a heat map tracking how much children born in the late 70s and early 80s would go on to earn as adults according to the atlas data where you grow up really matters if you grow up in a low-income family in harding county south dakota for example you can expect to earn much more than your parents but if you're raised in hoke county north carolina your household income at 35 is likely to be just 22 000 among the lowest in america the pattern that jumps out is the incredibly high mobility rates of the great plains and upper midwest if you ask many people what's the highest mobility place to grow up in the country they'll often say you know very highly educated cities on the coast but the highest mobility rates by far are in places like iowa and nebraska these are places where children from low income families really have just outstanding outcomes it's not entirely clear what makes these places engines of opportunity the researchers think it's connected to role models most of the areas of greatest opportunity have a high number of two parent families as well as good schools and low levels of segregation [Music] according to the atlas data children growing up in dawn's old area can expect to earn twelve thousand dollars a year less than those who grow up in her new neighborhood i literally feel like i'm one of the lottery winners but even the schemes advocates acknowledge moving people to better places is simply too costly and labor-intensive to be a scalable solution to improve social mobility this is never going to be a broad-based solution because we can't just move everyone around but on the other hand if you even just take the incredibly narrow view that children who grow up in higher opportunity neighborhoods will themselves grow up to earn more as adults and pay more taxes as adults you can actually get the program to pay for itself due to these higher outcomes moving up the social ladder isn't just about increasing your earnings it can also be linked to something which is harder to quantify social capital the invisible networks that help perpetuate the advantages those from wealthy backgrounds enjoy social capital is having people you can turn to oh do you know someone in this industry or can you help me with the cv the really kind of like subtle favors that people can call upon sophie may be successful now but she is keenly aware of the importance of social connections which she lacked when she started out i think that i've gone to uni expecting to make friends on the basis of my academic interests and my intellect and what i realized was that actually university was this like extension of a public school system that exists in the uk and it was really strange to me i didn't have the networks people would make comments about my accent they would say you sound really essexy you sound really chavy [Music] sophie has founded a group dedicated to changing this we're going to let the defenses down let the side there that's nice yeah this is the 93 club so called after the 93 of students who attend state schools in britain effectively what we're doing is we are packaging up privilege the kind of privilege that you can't see but is definitely operating in our society and we give it back to students from lower socioeconomic backgrounds today members are having headshots taken for linkedin profiles as well as meeting professional mentors from some of britain's most successful firms and actually the you know some thing that you think sounds quite mundane if you explain to someone why that was the most challenging thing you did it will come across way better the 93 club now has nearly 50 branches and universities across the uk for some of the newer recruits the group has been a lifeline whether you realize it or not your class and your upbringing ends up playing such a pivotal role in the rest of your life it gives you these opportunities and trains you for example a private school parent might check the cv for the child but for example someone like me i can't get my mother or father to check my cv because the fact that they're not educated enough it will take more than passionate individuals to improve social mobility it requires governments to commit to improving both access to education and wealth redistribution it's a huge task but the post-pandemic world offers a unique opportunity for change social mobility and more generally income inequality has really come to the fore of the policy discussion if there's a silver lining of the pandemic sometimes it takes a big shock like this in order to really get people focused on all of these inequalities i think we've dramatically expanded what might be possible over the past year relative to the way people thought about these problems 15 or 20 years ago hi i'm madrice colun and i'm the washington correspondent for the economist if you'd like to read my briefing on social mobility then please click on the link that's opposite me and if you'd like to watch more of our now and next series then please click on the other link thank you very much for watching and please don't forget to subscribe [Music] you

Channel: The Economist

Views: 1,713,937

Keywords: The Economist, Economist, Economist Films, Economist Videos, Politics, News, short-documentary, social mobility, what is social mobility, education, sociology, class, economics, inequality, social mobility and education, how to increase social mobility, why is social mobility declining, social mobility in decline, social class, what is social class, social class meaning, social class definition

Id: T1FdIvLg6i4

Length: 25min 18sec (1518 seconds)

Published: Thu Nov 25 2021

Reddit Comments

[u/Pa3k]

Can a colonel’s son become a general?

No, because a general has a son too.

• A popular joke from USSR.

[u/OrcOfDoom]

Lifeprotip: just be born to deadbeats. That way, if you have any job, you've already vastly outperformed them.

[u/naMlevraM]

When the cost of education, housing, healthcare, and even everyday things like food have significantly increased in price while wages and salaries have been fairly stagnant of course future generations won’t be better off. Also the fact that pensions are now a concept in history books unless you get lucky and get a good government job.

The only people who will be better off than their parents are those kids lucky enough to be born into wealthier families where parents can help them pay for college, help with a down payment on a house etc. the system is becoming incredibly concentrated at the top and less and less opportunities for the poor and middle class households. Education in this country is fucked though. The cost of a 4 year degree and masters or doctors programs are asinine unless you go into in demand fields. And even then it’s no guarantee you’re going to get a high paying job. Education only give you the chance to get a good job.

[u/DaveDearborn]

My earnings were well above my dad's. I have an MS and BS in engineering and dad dropped out of school early. However, he had a good union job and we were well taken care of

[u/worktillyouburk]

its one of my life goals.. never gona happen.

my dad recently retired he was making low 6 figures, after working for the government 30 years now. 4 weeks paid vacation, pension, all the benefits really.

they have since hired a replacment younger guy making... 45k to do the same job, actually to do more than my father did. it will take that guy 20 years to make my fathers sallary overall its make no sense same job half the pay, and no where near the same benefits.

i watch my dad reno his house, accumulate more debt , go on vacation each year, 2 cars, and buy anything he wants, becuase his retirment is assured with his pension.

​

i dream of a life like that, i live as fruggaly as possible have had no vacations or travel since i was a kid, no job i could apply for would pay me 100k+, and have retirment benefits like that no one.

[u/I_Was_Fox]

I already earn more than both of my parents, and I'm only 28. But I am likely going to rent for the rest of my life meanwhile, one of my parents just moved into a new place (owned) for the 3rd time in 5 years and my other also bought and sold two houses in the last 5 years. Buying a house is literally impossible for me and the idea keeps feeling more and more impossible every year, even though I make more money than they do.

[u/MpowerUS]

TLDR: money printer go brrrrrr more and more every generation and the owning class won't comp their workers for inflation.

[u/earic23]

It's not even debatable that current generations are born into an ever increasing disadvantage unless they're born into money. I make 5x more than my mom ever did, yet I couldn't afford a down payment on a house without help from my in laws.

[u/[deleted]]

We need to pay living wages with good benefits including paid leave and child care. I've visited over a dozen european countries and saw people making a decent wage with good benefits and not dependant on tips.