Why some ambitious Americans emigrate, and how the U.S. could ensure that hard work pays off.
Why Americans Emigrate
Richard Florida is senior editor at The Atlantic and director of the Martin Prosperity Institute at the University of Toronto. He is the author of “The Rise of the Creative Class” and, most recently, “The Great Reset.” The economic crisis has put a substantial crimp in a cornerstone of the American dream – their ability to climb the socio-economic ladder. Evidence from a number of studies suggests that Americans’ rate of socio-economic mobility has slowed in recent years and that other nations have overtaken it. Anecdotal evidence also suggests that young ambitious Americans may be headed overseas – to China, India, emerging economies and other places to pursue economic opportunity.
A small but growing group of Americans are headed abroad for economic opportunity and to learn and grow. This is a good thing.
Yes, it is true that America remains mired in a long-term economic crisis and transformation. But even though America has plenty of problems – from high levels of joblessness, significant inequality, comparatively high levels of crime and violence, substantial poverty and political dysfunction in Washington – which make life ever more difficult for working- and middle-class people, the reality is that it still remains the most entrepreneurial place in the world. It's not just New York that fits the adage, "if I can make there, I can make it anywhere": Nowhere else can match the pull and opportunity of Silicon Valley for those who want to make it in tech, Hollywood for film, and even smaller places like Nashville for those who want a career in popular music. Despite the fact that the government has erected all sorts of obstacles to ambitious immigrants who want to come to the United States, America continues to attract the lion’s share of the world's best and brightest.
As for those young people born in the U.S. who are pursuing opportunities abroad: this is a great trend, not a sign of America’s failings. I have noticed this among my own graduate students in business, public policy and urban affairs over the past decade, as well as in my studies of the “Creative Class.” There was a time a century or so ago when talented and ambitious Americans, particularly those who wished to pursue careers at the frontiers of science and technology, went abroad to Germany and England for their studies and training. Of course all of this changed in the mid-20th century with America’s rise to the front ranks in arts and culture, academe, and science and technology. But now with globalization and “the rise of the rest,” a small but growing group of Americans are headed abroad for economic opportunity and to learn and grow. This is a good thing.
AnnaLee Saxenian of the University of California has a name for all of this. She calls it "brain circulation" — a wonderful term that captures the flow and mobility of people in our global age.
America has much to do to re-establish its middle class, to create family-supporting jobs, reduce gaping inequality and re-establish upward mobility for its people. That said, it still remains a land of opportunity for many talented and ambitious people around the world. This country should do all it can to embrace the new realities of a highly mobile, ever-circulating global economy — by making it easy for Americans to go overseas and by welcoming the ambitious and energetic immigrants who have contributed so much to this country's innovative and dynamic economy.
Opportunity Trumps Mobility
Stuart Butler directs the Center for Policy Innovation at the Heritage Foundation. Comparative studies mislead us because analysts define “economic mobility” as the degree to which a person’s income differs from his or her parents’. The wider the difference, the greater a country’s mobility – and assumed opportunity. But the American economy especially rewards certain traits – persistence, hard work, love of education – that tend to be passed from parents to children. Technically that implies low mobility, compared with Europe. But immigrants see it as fostering opportunity. That’s why Europeans keep coming here.
Still, we are slipping, especially for those starting out at the bottom. Americans need more savings, better parenting and affordable higher education.
For a Pew Foundation project on economic mobility, my Heritage colleagues and I identified three crucial “leading indicators” for upward movement. One is accumulating savings. Our problem is a dearth of personal savings among lower-income Americans when compared with similar households in, say, Asia. Policies like ending the double taxation of savings would help. But we also need a cultural shift in attitudes to saving: Asian-Americans have a lot to teach the rest of us.
Second, family breakdown has devastated economic progress for those on the bottom rungs. Improving program incentives and assistance may help counteract this. But it takes a village to sustain the ladder of opportunity. That’s why projects like the Harlem Children’s Zone are critical. This organization links charter schools, parenting workshops and other efforts that reinforce a community-wide culture of upward mobility.
The third is education. It’s almost impossible today to move up the ladder without a college degree. But rising tuition and indebtedness poses huge barriers for many families. The good news: American higher education seems on the brink of a huge reorganization and cost reduction, thanks to new business models and advances in online education.
For Some, This Is Not a New Problem
Michael C. Dawson is the John D. MacArthur Professor of Political Science and the director of the Center for the Study of Race, Politics and Culture at the University of Chicago. He is the author of "Not in Our Lifetimes: The Future of Black Politics." A few decades ago when I was working as a research assistant for Sidney Verba, a Harvard professor of political science, I was stunned by the levels of wealth disparity revealed through his and his colleagues' research. The U.S. had far greater disparities of income and wealth than any of its peers. Now the other shoe has dropped, and once again the U.S. has fallen far behind its peers: the probability that those at the bottom of the income distribution can move up the economic ladder is much lower in the U.S. than in other developed countries.
If social mobility continues to decline, more Americans will agree with Malcolm X: there is no American dream, only an American nightmare.
Some on the right see the continued high levels of immigration as evidence that we still live in the land of opportunity — that the American dream is still alive. But immigrants' reasons for moving here often have as much to do with conditions in the country of origin — levels of violence, economic collapse, civil war and political persecution — as they do with the perception of social mobility within the U.S. Indeed, recent research by Edward Telles and Vilma Ortiz carefully documents the lack of social mobility among Mexican immigrants over five generations. Disturbingly, they conclude that lack of Mexican-American economic assimilation is a result of ingrained racial exclusion, with similar results to the exclusion of African Americans in their migration from the rural South to the country’s urban areas during the first half of the 20th century. The lack of social mobility is not new for our black and Mexican-American communities.
It is arguably a new reality for an increasing number of white Americans. Some major shifts have largely eliminated key engines that led to the growth of the middle class for the descendants of European immigrants as well as African Americans: stunning disinvestment in K-12 public education and higher education; the increasing proportion of the population for which higher education is now unaffordable; the decline of the influence and scope of unions and the decline in the manufacturing sector of the economy; and the decline in government employment.
If there is a growing consensus that the U.S. is falling behind in social mobility, the question becomes what to do about it. Here there is no consensus. My analysis suggests some starting points: First, a huge reinvestment in education. This is particularly necessary to attempt to stay competitive not only with Western Europe, but also with the growing economies of Asia and elsewhere — which are investing in education and seeing substantial returns on their investment. Second, we have to end digital redlining and ensure that broadband access (another area in which the U.S. lags behind its competitors) is available to more households. College applications, job applications and critical information of all types necessary for survival and advancement are increasingly found only online. Finally, the state needs to invest in people — not only in education, but also in jobs. Our infrastructure is crumbling, and we need to invest in greening the cities. Without such investment, the country becomes increasingly less competitive and its residents more impoverished.
If social mobility continues to decline, an ever-widening expanse of Americans will come to agree with Malcolm X’s angry argument a generation ago that for blacks in the U.S., there is no American dream, only an American nightmare.
The Disadvantages Start at Conception
Isabel V. Sawhill is a senior fellow at the Brookings Institution and a co-director of the Center on Children and Families. A growing body of evidence suggests that the United States, far from being the land of opportunity celebrated in our history and our literature, is instead a country where class matters after all, where upward mobility is constrained, especially among those born into the bottom ranks.
What could be done to improve the upward mobility chances of less advantaged children?
Three changes could increase opportunity, economic growth and our competitiveness with other countries.
First, it would help if more parents were ready to take on the most important responsibility any adult normally assumes, which is the decision to have a child. Unfortunately, for far too many teens and young adults, this is not a carefully planned decision. Half of all children born to women under the age of 30 are born outside of marriage, and 70 percent of all pregnancies to single women in this age group are unplanned. Research shows that access to more effective (but expensive and hard-to-get) forms of contraception could help here. Making Plan B available over the counter is just one example.
Second, low-income children enter school far behind their more advantaged peers in vocabulary and learning-related behaviors such as the ability to sit still or follow directions. High-quality early-education programs can compensate for some of these deficits, but too few children are enrolled and too few programs are high quality. These children tend to fall further behind as they progress through school. Large numbers drop out of high school, enter the criminal justice system, or end up unemployed or earning very low wages. These trajectories can be changed in part by putting better teachers in the classroom, setting higher standards and expecting students and parents to be full partners in this effort.
Third, no one should graduate from school without the specific skills needed by today’s employers. Not everyone is going to benefit from a traditional four-year college degree. But more career and technical education, on-the-job training or community college programs could produce a more highly skilled work force.
These investments have the potential to increase opportunity, economic growth and our competitiveness with other countries. Will we make the needed changes? Not if we remain overly focused on keeping taxes low and fail to restrain spending on the affluent elderly.
Living the American Dream (in Canada)
Timothy M. Smeeding, author of “Persistence, Privilege and Parenting,” is the Arts and Sciences Distinguished Professor of Public Affairs and Economics at the University of Wisconsin-Madison and the director of the Institute for Research on Poverty. Of all the consequences of rising economic inequality, none is more worrisome than the possibility that a growing gap will make it harder for children of low-income and middle-class families to climb the economic ladder. As financial resources have become more unequal in most European and Anglo-Saxon countries over the last three decades, the difference in the abilities of rich and poor families to invest in their children also has become more unequal. This gap is growing just as changes in the labor market increase demand for highly educated workers and decrease opportunities for the less educated.
Unless the U.S. makes big changes, Americans in search of an equal-opportunity society might just as well move north.
Unless these inequities are offset by public policies designed to moderate their effects, the children of the rich will have an increasingly better chance of staying rich, and the children of the poor and middle classes will have less chance to advance.
Higher levels of economic inequality are associated with lower rates of mobility. But children are more upwardly mobile in some nations than in others. How do countries like Canada, with above-average inequality and above-average child poverty rates, do so well on mobility outcomes compared with the United States? Canada has more effective public investments in education, including nearly universal preschool, effective secondary schools and high rates of college completion. And the Canadians are much more generous to low- and middle-income families, including child allowances and tuition breaks for university education.
We must strike a better balance between allowing parents to do what they deem best for their children and supporting social institutions that might provide more equal opportunities. It is possible to provide more equal life chances in the United States in ways that do not violate American norms of parental autonomy. While no society will ever overcome parental influences and fully equalize opportunities, policies that are based on lifting the children at the bottom of the income distribution offer the best chance for success. Unless the U.S. can learn from countries like Canada how to enhance mobility, Americans in search of an equal-opportunity society might just as well move north.
Hard Work Should Pay Off
Heather Boushey is a senior economist with the Center for American Progress. We know how to provide opportunities for hard-working Americans to enter and thrive in a prosperous and growing middle class. What happens inside the home, for example, is a critical factor in whether children will be able to someday seize opportunities in our economy to become upwardly mobile. Effective parenting is critically important to giving children a good start on the road to social and economic mobility. At the same time, upward mobility is associated with stable family incomes, which is more common among those with two working parents — increasingly the norm in our society.
Unfortunately, parents struggle to juggle home and work, and people who go to college end up deep in debt.
Yet the ability of parents to be good workers and effective parents is sharply curtailed by workplaces that haven’t adapted to this reality. Parents, especially those in low- and middle-wage jobs, are too often forced to choose between a day’s pay and perhaps losing their job if they have to take care of a sick child. These Americans have little to no flexibility to create schedules that can help address — or at the very least not exacerbate — work-family conflict.
Enacting paid sick days and giving workers the ability to better bargain for workplace flexibility are two simple steps that we could take to give their children a good start in life, helping them eventually move up the economic ladder. These are just two ways to foster economic opportunity to boost upward mobility.
There is another, more immediate, impediment to upward mobility. Young men are not attending college at the same rate as women. One could conclude that men don’t understand that investing in a college degree pays off handsomely. But there is another interpretation. Many college-educated men are finding they have been sold a bill of goods, because one in five earns less than the typical high-school graduate.
America’s future productivity will be hampered if young men invest in their human capital yet end up with a historically high pile of student debt and are no better off than those that entered the labor market right out of high school. Improving our higher education system is yet another way to close the distance between the rungs on the economic ladder. Providing opportunity is imperative for our economic future.
Opportunity itself should be a national priority. If it is not, our nation will experience reduced economic productivity and become less competitive. America must once again become the place where if you work hard and play by the rules, you can live the American dream.
First, Help Today’s Struggling Youth
John M. Bridgeland, a former director of the White House Domestic Policy Council, is president and C.E.O. of the public policy firm Civic Enterprises. He wrote about the Opportunity Nation initiative in November. Research tells us that only 2 percent of individuals who finish high school, work full time, and have stable families before having children end up poor, while 72 percent of individuals who do none of these things end up poor.
If we care about equality of opportunity, we should invest in proven programs that keep young people in school and out of prison.
Yet every year in America more than 1 million youth drop out of high school, crippling their chance at the American dream. Nearly one in six 16- to 24-year-olds is disconnected from the two structures that offer hope for their future – school and work. Promoting opportunity means opening multiple pathways for young people to connect to education, job training, employment and community service.
To do this, we should invest in successful programs like YouthBuild that currently have long waiting lists for enrollment. With a track record of success, YouthBuild offers a holistic program of education, job training, personal counseling, community service, leadership development, placement in college or jobs, and follow-up support after graduation. More than half of the unemployed and undereducated young people who enroll in YouthBuild turn their lives around and get back on track for a productive adulthood.
Drawing on the example of President Franklin D. Roosevelt’s Civilian Conservation Corps, we should also create a Conservation Corps to mobilize disadvantaged youth from urban areas to meet the needs of our urban national parks and waterways. National service has been shown to be a good bridge to full employment, and it comes at a low cost to government. A Conservation Corps would put youth immediately into productive work while meeting the needs of our nation to support and maintain our national heritage. The youth who participate would be eligible for an education award and service stipend. And the cost to taxpayers is much lower than the cost of social supports or incarceration when we fail to help young people stay on track.
A Great Nation if You’re Born Rich
Miles Corak is a professor of economics at the University of Ottawa. He blogs at milescorak.com and co-wrote “Economic Mobility, Family Background, and the Well-Being of Children in the United States and Canada,” a study recently published by the Russell Sage Foundation. Most American and Canadian children of middle class parents don’t have their life chances noticeably determined by their family background.
But averages conceal as much as they reveal. Children of not-so-wealthy parents would have better prospects in Canada.
If I were a young American born to top-earning parents I would want them to stay put: these high achievers are not only rich but also well connected and well informed. They can give me the education, health care, housing and other investments that would set me on a path to attend some of the best colleges in the world. I would enter a labor market that rewards my education to a much greater degree than in Canada, and a tax system that lets me keep more of my earnings.
If I were a child born in the top 10 percent, my odds of staying in the top 10 percent as an adult would be better than 1 in 4. I’d have a better than 50 percent chance of staying in the top third. In Canada, only 1 in 7 kids born to top-earning parents become top-earning adults, and almost 10 percent fall to the very bottom, something that happens to only 3 percent of rich American children.
A rich kid does well in the U.S., but a poor kid does not.
If I were born to parents in the bottom 10 percent, I would rather they were raising me in Canada. Being in the bottom 10 percent would mean less hardship: my family income would be greater; I would be more likely to be living with both of my biological parents; I would be visiting a doctor regularly; and I would spend more time with my parents, particularly my mother during my infancy as she would have almost one year of paid parental leave.
My physical and mental well-being, general happiness and cognitive development would be noticeably superior even at a very young age.
My early education would be of higher quality because it is funded through progressive income taxes, not local property taxes. I would have access to a good college or technical training at relatively affordable tuition fees of $5,000 to $10,000 a year.
If my parents lived in the U.S., I would have more than a 1 in 5 chance of being stuck in the bottom 10 percent of the earnings distribution and a 50 percent chance of staying in the bottom third. In Canada I’d be less likely to remain in the bottom, and would have a 50 percent chance of reaching the top half. In short, the Canadian playing field is more level than the American, and my chances of moving into the middle class would be higher.