Chutes and Ladders: How economic mobility is changing in an inequality society

Report | January 10, 2014 | By Tatsuko Go Hollo

Executive Summary

As the country continues to slowly climb its way out of the Great Recession, rising inequality and a shrinking middle class have become a growing threat to our national economy and shared quality of life. And while the American dream of prosperity, security and opportunity is still the standard by which most Americans measure success, for today’s working families, that dream seems impossibly out of reach. Many question whether today’s youth will ever achieve the success of their parents or will instead stagger under crushing debt and closing doors of opportunity.

One way to analyze the success of a generation is to compare economic stability with that of generations past using measures of mobility. Imagining economic standing as a ladder, mobility is a measure of an individual’s position on the ladder compared to that of his or her parents. Specifically, mobility studies focus on how an individual’s income compares to her parents at a particular age (absolute mobility), as well as a broader analysis of whether those differences in income are enough to move that individual into a different economic standing, such as an income quintile or class (relative mobility).

The rise and fall of industries, economic booms and busts, and changing labor and education policies all shape the success of any given generation. And while a dedicated and enterprising individual might still achieve success beyond his or her wildest dreams, for many, the circumstances of birth are the main predictors of where they will land on the mobility ladder: the bad luck of being born into poverty, or having a parent lose a job, or being raised in a down-and-out neighborhood all make a difference in how likely someone is to climb to a higher rung and realize a better quality of life.

Many Washington residents seek to make a better life for themselves, pursuing and benefiting from education and other opportunities in hopes of achieving upward mobility. Regardless of individual effort, structural changes in the state’s economy, along with ups and downs of the business cycle, make a difference in the financial standing of working families.

Although our economy will continue to change course, hitting both highs and lows along the way, policymakers can make intentional choices about building systems to protect and enable upward mobility for all families. Circumstances of birth will likely continue to affect one’s capacity to move up the income scale, but with the right public policies in place, being born into poverty doesn’t have to mean staying at the bottom of the ladder. Policy decisions determine how steep the ladder is, how far apart the rungs are, and whether basic dignity is accessible to all.

Legislative decisions made at federal, state and local levels all have bearing on the ability of Washington residents to maintain middle class standing or achieve upward mobility. The federal Head Start program ensures access to child care and early learning for the nation’s most vulnerable children, providing an early path to success for millions of kids living in poverty. Social Security not only assures many seniors a basic level of dignity in retirement, but also insures families who lose a breadwinner because of death or disability. Washington state’s minimum wage, the highest in the nation, has provided a more solid earnings floor for low-wage workers. Seattle’s Paid Sick and Safe Leave law ensures paid time off for a majority of workers in the city to care for themselves or a loved one during illness or to deal with the effects of domestic violence.

Each of these policies, along with unemployment insurance and workers’ compensation, contributes to broader platforms of security for workers and their families that help to keep people in good economic standing and prevent financial ruin in the event of a crisis. Conversely, political decisions to restrict access to and funding for these policies increase downward mobility – and make climbing back up after a setback more difficult.


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