The income gap widens:
In the United States, the richest 10 percent earn an average of US$93,000 – the highest level in the OECD. The poorest 10 percent earn an average of US$5,800 – about 20 percent lower than the OECD average.
Social mobility is lowest in countries with high inequality such as the United States, United Kingdom, and Italy, the report said.
No surprises in the trend, really. It’s been going on for a long time—as has the decoupling of GDP growth and middle class income. (See the chart to the right, borrowed from Kevin Drum’s blog at Mother Jones.)
Still, I’m grateful that the AP article I link to above mentions the connection between income inequality and social immobility. It’s a story that needs to be told more often.
Opponents of policies designed to ease economic inequality often argue that they’re unnecessary, since people simply aren’t stuck where they’re born. If you want to earn more money, the argument goes, all you need to do is work hard. Maybe you won’t make it into the lucky 10%, but at least your kids might. Inequality, the argument goes, is actually necessary to upward mobility, since it gives people the belief that their hard work can really pay off.
But as it turns out, that’s simply backwards: places where incomes tend to be more equal also tend to be the places where people are more likely to move up the economic ladder. So in practice, income inequality turns out to be an obstacle to (or at least negatively correlated with) pulling yourself up by your bootstraps—quite the opposite of the standard argument.