NR Digital

The Inequality Cycle

by Oren Cass

Why social and economic opportunity rise or fall together

By one measure, opportunity and mobility are thriving in America. Children born into the lowest income quintile have almost exactly equal chances of arriving in any of the five income quintiles as adults. There is only one catch: Their parents must be and stay married. Children whose parents never marry face poor prospects: More than half remain in the bottom quintile, ten times the share that reaches the top.

Tragically, this latter scenario is becoming the norm. America’s “lower class,” for lack of a better term, is undergoing an unprecedented social collapse that threatens to destabilize core American principles. The data on marriage, parenting, employment, civic engagement, and basic values show a widening and sometimes accelerating gap between classes. This form of inequality is far more consequential than income inequality because strong families and communities, unlike high incomes, are the cornerstones of a free and fair society.

Being raised very poor does not cut off opportunity, but what about being very poorly raised?

Today’s correlation between poverty and a host of social ills has led policymakers to treat them almost interchangeably and emphasize economic relief. But the correlation is historically anomalous: Fifty years ago, though poverty was no less prevalent, class-based gaps on social indicators from marriage to child-rearing to labor-force participation were small to nonexistent. This suggests that today’s emphasis on economic resources is a mistake. Rather, the focus should be on disrupting the cycle of poverty in which social decay in one generation inhibits the development of the next, individuals ill-prepared for life and work face limited opportunity, and their ensuing struggles cause further social decay.

Unfortunately, almost the entirety of the American social safety net now focuses on relieving economic hardship, though we know that this relief reduces the incentive to work and fosters government dependence. It explicitly channels resources to single parents and the elderly and away from young people transitioning to adulthood. Education reform emphasizes college-readiness at the expense of job-readiness. The immigration debate revolves around who will affect whose wages rather than which social strata can effectively absorb newcomers.

Neither the Left, obsessed with income inequality and unmindful of cultural decline, nor the Right, accustomed to countering concerns about inequality with promises of opportunity, is ideologically inclined to address the inequality that matters. Defining the challenge properly and then tackling it should be our top domestic-policy priority.

The cycle of social decay begins before the next generation is born, as parents-to-be fail to form stable marriages. In Coming Apart, American Enterprise Institute scholar Charles Murray shows the relatively sudden emergence of this failure by comparing marriage rates for prime-age Americans, whom he groups into an upper class, defined as the 20 percent of Americans with college degrees working in “high-prestige” professions, and a lower class, defined as the 30 percent with a high-school degree or less working in a “blue-collar job, mid- or low-level service job, or a low-level white-collar job.” To control for any race-related factors, he focuses specifically on whites.

Marriage rates were 94 percent in the upper class and 84 percent in the lower class in 1960 and remained at those levels into the 1970s. By 2010, the upper-class rate had declined to 84 percent but was holding steady, while the lower-class rate had plunged to 48 percent and was continuing its decline. Three-quarters of upper-class married couples reported that their marriage was “very happy,” and that ratio has been rising; among lower-class married couples, one-half described their marriage as “very happy,” and that ratio has been falling.

These trends have obvious implications for the family environment into which children are born. According to Murray, more than 95 percent of upper- and lower-class white children were living with both biological parents when the mother turned 40 in the 1960s. But by the 2000s, while the figure remained at 90 percent for the upper class, it was plunging toward 30 percent for the lower. When he widens the lens to look at all races, the picture is nearly identical.

Murray provides many other measures of the gaping cultural inequality into which children are born today: Between the 1970s and 2000s, the percentage of upper-class people ages 30 to 49 not involved in any organization (secular or religious) stayed below 10 percent, while for the lower class it tripled, to more than 30 percent. During the same period, the rate of imprisonment among the lower class more than quadrupled. By 2010, only 20 percent of the lower class said that, generally, “people can be trusted,” versus 60 percent of the upper class. Less than half of the lower class believed that others “try to be fair,” versus 80 percent of the upper class. On both measures of trust, the trend lines by class are headed in opposite directions.

In Our Kids, Harvard University political scientist Robert Putnam shows how these disparities perpetuate the cycle for generations. Whereas in the 1970s parents of all education levels spent equal time with young children on developmental activities, college graduates now spend 50 percent more time on such activities with their children than do parents with a high-school degree or less. Even family-dinner time is declining for the latter group but not the former. Better-educated parents place far more emphasis on encouragement and on the value of self-reliance, while less educated ones more frequently deliver discouragement and emphasize obedience.

Putnam explains that children in the lower class face stresses and traumas foreign to the upper class. They are up to five times more likely to face abuse and violence, addiction, and the death or imprisonment of a parent. Those experiences, along with ineffective and unstable caregiving, impair learning and the development of “executive functions” such as concentration, self-discipline, and problem-solving. All these consequences occur independently of public schooling and, largely, before public schooling has even begun. By the time they reach school, 72 percent of middle-class children know the alphabet, Putnam reports, compared with 19 percent of poor children.

These problems in turn perpetuate the cycle by diminishing opportunity and career prospects. Between 1960 and 2010, Murray reports, the percentage of upper-class households with a full-time worker declined from 90 percent to 87 percent, while the lower-class decline was from 81 percent to 53 percent. And so, as the next generation starts its own families in its own communities, one can only hope the lower class will manage to hold the eroding ground on which their parents stood. The trends, unfortunately, suggest they have little chance even of that; as the cycle spirals downward and decay engenders yet more decay.

Dismay over this widening gap between classes seems at first like yet another complaint about income inequality. It is not. These statistics measure not income or wealth but rather the markers of social health. These may be closely correlated today, but income inequality has been a permanent fixture in American life. The data here, by contrast, show that major gaps are emerging in areas of life that have not historically been significant sources of inequality at all.

The difference is crucial, because inequality matters first and foremost for its effect on opportunity. A type of inequality that stifles opportunity will replicate itself by leaving those born into hardship with no viable exit. Under such conditions, if factors beyond an individual’s control too often dictate his situation in life, free markets and limited government become harder to defend. Conservatives rightly argue that low incomes in one generation need not dictate outcomes in the next, and thus income inequality need not undermine opportunity. But this argument is sound only if critical non-economic endowments are available to all — precisely the ones undermined by social decay.

Consider the quintessential depiction of income inequality in John Edwards’s “Two Americas” speech at the 2004 Democratic National Convention. Edwards began by acknowledging his parents, both in the audience that night. “You taught me that there’s dignity and honor in a hard day’s work,” he said. “You taught me that you look out for your neighbors, you never look down on anybody, and you treat everyone with respect.” He told the story of his upbringing in a small town where his mother and father both worked, of his mother’s eventually running a small business to help pay his college tuition, and of all the other men and women in town who “worked hard and tried to put a little something away every week so their kids and their grandkids could have a better life.”

Edwards intended this account to outrage his fellow Americans. His town was in the unfortunate half of the two Americas. In his telling, he grew up on the wrong side of a divide separating those “who have lived the American dream” and “are set for life” from those “who work hard and still struggle to make ends meet” and “live paycheck to paycheck.” “It doesn’t have to be that way,” he insisted, over and over again.

The argument made little sense. Wasn’t he, in fact, living the American dream? The material hardship he assailed looked surmountable, his opportunity substantial, his achievements impressive.

A study by Richard Reeves and his colleagues at the Brookings Institution confirms the intuition: Edwards’s circumstances offered abundant opportunity. Their data show that of people growing up in the lowest income quintile with two parents, as Edwards presumably did, only 17 percent land in the bottom quintile as adults and 23 percent land in the second quintile, while 20 percent, 20 percent, and 19 percent land in the top three quintiles respectively. The distribution is almost perfectly even, with the odds of remaining at the bottom actually lowest. The community of strong families  that Edwards described would have played a critical role as well. Raj Chetty and his colleagues from Harvard’s Equality of Opportunity Project have found that the fraction of children with single parents is the best predictor of upward economic mobility in a region, whereas the region’s level of income inequality is not a significant predictor.

But elements in Edwards’s upbringing that might have mitigated his economic hardship — a two-parent family instilling strong values, a community filled with hard-working role models committed to the betterment of their children — are exactly what have now gone missing in lower-class America.

What if, in addition to having few financial resources, Edwards had had no consistent caregivers and those adults who were in his life had regularly exposed him to stresses and traumas that impaired his development? What if his extended family and community had lacked role models, and the broader culture had reinforced destructive norms and values? What if, in other words, his upbringing had borne no resemblance to the story he told, but had fallen squarely within the experience of the lower class today?

Beyond a certain point, social inequality prevents children in the lower class from having what they need to get ahead. Whether America has already passed that point or is merely hurtling toward it matters little. Recent data show little change in the rate of upward mobility — that is, the share of those born in the bottom income quintile who reach higher quintiles as adults. But this view is backward-looking; it focuses on what happened to children of the 1970s and ’80s who are now in their thirties and forties. If one projects the future by linking Murray’s and Putnam’s social trends to Reeves’s and Chetty’s analysis of social mobility, the forecast is dismal.

Even if the full effects come only after the cycle of social decay completes another turn, the crisis is here already. Social inequality is insidious because it transmits itself across generations by interfering with opportunity. Its self-reinforcing nature produces a downward spiral that is difficult to escape.

Worse still, the social collapse is occurring in absolute rather than relative terms and represents a true worsening of well-being in America. One common rejoinder to concerns about income inequality is that the bottom’s success relative to the top’s is unimportant so long as the bottom’s condition is itself improving. (For instance, as the Heritage Foundation’s Robert Rector has observed, the percentage of poor households with air conditioning increased from 41 percent in 1980 to 78 percent in 2005.) But social inequality is developing today through the opposite dynamic: As the upper class holds steady, the lower class is falling away. The language of economics does not apply: There is no “social business cycle” expected to turn from social “bust” to social “boom”; no rising social tide will lift all boats; no growing social pie will offer everyone a larger slice.

Can we conclude that social conditions in the lower class unfairly impair opportunity? If we do, it should affect what outcomes we consider just and what level of government intervention we demand. But the situation is not only a fundamental challenge to some conservative assumptions; it also reinforces conservatives’ emphasis on family and community and traditional values as social bedrocks that a government program or check can never replace. Conservatives are uniquely capable of understanding the problem and should lead the way toward solutions.

For better and worse, you can’t legislate social change. Social programs — especially if delivered through local organizations — can provide real help to individuals. But programs alone cannot counter the momentum of a free society barreling in the opposite direction. Instead, broader public policy must seek to alter the basic incentives and conditions fueling the negative trends.

Opportunities for effective policy interventions exist at each transmission point in the cycle of social decay. An education system can either cement or mitigate the effect of the conditions in which a child is born and raised. Unemployment law and the safety net can push those with few skills either toward the labor force or away from it. Policies from immigration to zoning shape communities and their values. In these areas and others, we should reorient policy to stave off social inequality.

Education reform is an obvious starting point; ongoing efforts in urban charter schools have already achieved remarkable success. But most reforms focus on the K–12 years, even though the large gap in performance between lower- and upper-class children already exists at age six and does not grow significantly from then through age 18. In other words, the oft-criticized K–12 system is not solving the problem, but it’s also not causing it. Asking K–12 schools to close the achievement gap would require them to defy the odds and produce better results in lower-class communities than in upper-class communities that benefit from much stronger parental support.

The most productive approach to education reform would instead focus more resources on either end of the K–12 system: at one end, on the preschool years, when the gaps first emerge; and, at the other end, on vocational training that prepares those with few skills to successfully enter the labor force. While evidence for the current effectiveness of pre-K programs is not good, it is certainly no worse than evidence for the effectiveness of the K–12 public-education system in which reformers invest so much time and energy. Expanding a broken K–12 model into earlier years makes little sense, but that need not be the model.

Why not preschool vouchers? What if the debate were not over the value of pre-K education but over whether a pre-K school system should be unionized? That pre-K schools lack an entrenched status quo defended by interest groups of teachers and administrators might make reform more attainable than in the K–12 system. And reaching kids at the earlier stage, where performance gaps emerge, should have a greater impact. The lack of funds for such programs is an argument for reallocating budgets, not ignoring the opportunity.

As students approach high-school graduation, a program to reduce social inequality would actively support transitions to employment at least as strongly as transitions to college. Universal higher education might be a noble aspiration, but it serves poorly those least likely to succeed at this level of schooling — often the same group suffering from social decay. To enhance students’ potential and strengthen overall social stability, we should ensure that every high-school graduate is prepared to find and hold a full-time job. Education reforms aimed at high school should consistently incorporate vocational training, internships, and apprenticeships. A high school’s success should be measured by how many of its graduates enroll in college — or find full-time work. We should spend more money getting people into jobs that develop skills than we spend subsidizing college tuition.

In the labor market, policy should treat low-wage employers as an asset rather than as the enemy. Those employers offer the best hope that many unskilled workers have of climbing onto the first rung of the economic ladder, learning new skills, and earning a living. Policy should encourage such employers’ hiring and training of otherwise unqualified workers. Policy should also reward workers for taking low-wage jobs. The best option would be to aggressively subsidize low-wage work, for both the employer and the employee, using dollars we now spend on other safety-net programs. Crucially, the subsidy should treat all workers equally, without regard to family size or marital status: The goal is to encourage work and move people from school or unemployment into the work force, not to channel resources on the basis of need.

Relatedly, we should revitalize the employer-employee relationship. Enthusiasm for the “sharing economy” and the trend toward independent-contractor relationships often overlooks the drawbacks of abandoning traditional employment. The option of working for oneself has benefits and might be the best choice for some, but it can leave workers disconnected from a business and from fellow employees, reducing stability and community. Further, as economist Tyler Cowen has observed, the independent-contractor structure places a premium on time management, self-motivation, and self-instruction, which disadvantages workers who lack such skills.

If market forces alone were dictating the shift toward independent-contractor relationships, policy intervention might be unwise. But many employers are discarding traditional work arrangements because they wish to avoid regulation, not because they prefer less control over their work force. A compromise that reduces regulatory burdens while expanding the arrangements that qualify as employment could benefit employers and employees, improve economic efficiency, and still support the evolution of new business models.

We could also enlist unions in the effort to reverse social collapse. Many unions are rightly criticized for benefiting their leadership and political patrons at the expense of both employers’ and employees’ long-term interests. The unionization of public employees has also proven an ongoing, unmitigated national disaster.

But a union can serve as a beneficial civil-society institution for low-wage workers in difficult jobs, helping them acclimate to the working world, develop good habits and skills, gain access to benefits, and form communities. Some unions in America work better than others, and some countries have models for unionization that differ entirely from ours. Constructive labor-law reforms could help employees organize when they want to while reshaping the scope of union activities to emphasize worker well-being, restrict damaging collective-bargaining agreements, and clearly separate the core task of workplace representation from any tangential political efforts.

Finally, government policy can strongly influence community formation even — and especially — for those with few skills and little money. Housing and zoning policies that dictate the physical formation of communities can have enormous positive or negative effects. Local governments should adopt more liberal, market-oriented planning regimes that allow multifamily housing development in prosperous urban areas. Such policies would pay a double dividend of reducing housing costs and allowing more lower-class households to join already strong communities. A broad coalition including the hardest-core libertarians and the most passionate social activists often loses out to intense NIMBYism on this issue. But properly defining the stakes might at least prompt second thoughts from those opposing development.

Immigration matters, too. Through the lens of income inequality, the immigration debate often focuses on measurements of GDP and wage growth. But if the issue is social equality, the question is different: Are the communities that immigrants will join robust, resilient, and prepared to assimilate newcomers and foster their upward mobility? If the answer in lower-class communities is no, then an influx of low-skilled immigrants is likely to accelerate rather than slow the cycle of social collapse.

This same reorientation toward social rather than income inequality has implications for any number of policy areas, including the tax treatment of marriage, the participation of religious organizations in the delivery of public social services, even the role of public broadcasting. (One recent study showed that access to Sesame Street had effects comparable to those of preschool programs.) And no discussion would be complete without looking beyond policy and mentioning the crucial role that political, cultural, and community leaders can play through the themes and values they emphasize. Social activism by leaders is not a policy prescription, but here it may be every bit as powerful.

Conservatives must tackle this challenge. Reverence for the gradual evolution of society and skepticism about government’s ability to exert a constructive influence go a long way toward explaining why the Right often defends the social status quo so aggressively, and why it is called “conservative” in the first place. But now the status quo leads toward collapse. For those in the lower class, the family and community pillars around which the conservative worldview is centered are near to toppling. If they fall, they will take opportunity for millions with them, and they may never be rebuilt.

– Mr. Cass is a senior fellow at the Manhattan Institute.

Send a letter to the editor.

Get the NR Magazine App
iPad/iPhone   |   Android