The Factors Decreasing Economic Mobility

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The Factors Decreasing Economic Mobility
ECON 303: Economics of Poverty and Discrimination
California Polytechnic State University
November 30, 2011

Abstract

The purpose of this paper is to examine the different causes that have been attributed to the decrease in economic mobility in America and how they have impacted a person’s ability to move up the socioeconomic ladder. The primary causes that will be discussed include: unequal education opportunities, globalization and technology. Important questions will be explored, such as whether an individual's economic success and upward mobility is dependent on the socioeconomic status of his or her family and how globalization, particularly off-shoring, and technology has affected the job standings of middle class Americans.

The decline of economic mobility in America is directly associated with diminished opportunity. Americans on the low to middle levels of the socioeconomic spectrum have become greatly disadvantaged due to unequal educational opportunities, the globalization of labor and production, and the emergence of new technologies. For generations, the cycle of poverty has secured the immobility of the poor. The gap between the rich and the poor has been widening ever since the 1970's and consequently, the poor have encountered decreasing economic mobility (Wessel, 2005). As a result of the widening income gap, the economic concentration of the poor has increased exponentially in relation to their limited access to educational and financial opportunities. As much as America prides itself on this part of "The American Dream," it appears to be a faint possibility. Aside from one's work ethic and motivation, there are many other factors that affect one's ability to successfully move up the economic ladder. In addition to education, globalization and technology, other factors of mobility also include the historic economic standing of one's family, the economy, and government policies. The majority of people living in poverty do not have the means to pay for proper education. In a society where success is greatly defined by one's education level, underprivileged families who cannot afford education for their children will continue to be stuck in poverty for generations. Even with the aid of government welfare, the majority of children that come from poor families can only afford to go to community college, which do not offer bachelor's or masters degrees (Bernstein, 2003). The number of poor students that receive a degree was "fewer than 5% in 2001 and has barely budged for 30 years" (Bernstein, 2003, p.3). On the other end of the scale, the majority of children born into wealthy families inherit their parent's advantage in income, which on average, is "as much as 45%" (Wessel, 2005, p.2). According to this information, it is evident that "Americans are no more or less likely to rise above, or fall below their parent's economic class than they were 35 years ago" (Wessel, 2005, p.2-3). Politicians have been hesitant to enact additional public policies to help the poor, such as raising the minimum wage or requiring employers to provide health insurance, because they believe that they will have a negative effect on the economy in the long run (Wessel, 2005). The government has used welfare policies as a safety net to provide the poor with enough to live off of, but it still hasn't provided them with any direct means of economic mobility. This has caused the poor families to become dependent on government welfare. Consequently, this dependence has resulted in their hopelessness for economic improvement and has taken away any financial control they have over their own livelihood. As a result, generations of families living in poverty have remained stuck in poverty at the tax payer's expense, with very little opportunity for upward mobility. Thus far, America has failed to provide its people with the equal opportunity that it promises. As a result,...
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