The rhetoric is relentless, particularly trumpeted by politicians of both parties and repeated by a willing media—the myth that America is a place of unparalleled opportunity where hard work and determination can propel any child out of humble beginnings to great success, wealth or high office. Unfortunately, most people believe that this is possible for everyone because of the singular inspirational examples that are often overpublicized.
The U.S. is the most economically stratified society in the western world. The Wall Street Journal reported a recent study that the top .01% or 14,000 American families hold 22.2% of the wealth and the bottom 90% or over 133 million families, hold just 4% of the nation's wealth. The U.S. Census Bureau and the World Wealth Report of 2010 both indicated wealth increased for the top 5% of households even during the recession. Based on Internal Revenue Service figures, the richest 1% has tripled their cut of America's income pie in one generation.
Even Canada, which has been considered a country with less of a problem with economic inequality is following in the U.S.' footsteps. According to Murray Dobbin, writing in Global Research, by the end of 2009, 3.8% of Canadian households controlled 67% of the country's total personal wealth. And between 1990 and 2005, the richest 1% experiences twice the reduction in taxes as the average Canadian.
The Pew Foundation study, reported in the New York Times concluded, "The chance that children of the poor or middle class will climb up the income ladder, has not changed significantly over the last three decades." The Economist's special report, Inequality in America, concluded, "The fruits of productivity gains have been skewed towards the highest earners and towards companies whose profits have reached record levels as a share of GDP."
The reality is very different, according to University of Michigan sociologist Fabian Pfeffer, who recently organized the international conference on inequality in Ann Arbor. “Research show that it’s really a myth that the U.S. is land of exceptional social mobility,” Pfeffer argues. His research is based on data on two generations of 5,000 families and a comparison to similar data from Germany and Sweden. Pfeffer found that parental wealth plays the most significant role in whether children move up or down the socioeconomic ladder, more so than other factors such as education, income or occupation. A similar situation exists in European countries such as Germany and Sweden with a significant difference—these countries provide more generous government funded public programs and social services to all citizens.
Some of the wealthiest entrepreneurs in North America say there is no such thing as the "self-made man." With more millionaires making, rather than inheriting, their wealth, there is a false belief that they made it on their own without help, a new report published by the Boston-based non-profit United For a Fair Economy, states. The group has signed more than 2,200 millionaires and billionaires to a petition to reform and keep the U.S. inheritance tax. The report says the myth of "self-made wealth is potentially destructive to the very infrastructure that enables wealth creation."
The individuals profiled in the report believed they prospered in large part to things beyond their control and because of the support of others. Warren Buffet, the second richest man in the world said, "I personally think that society is responsible for a very significant percentage of what I've earned." Erick Schmidt, CEO of Google says, "Lots of people who are smart and work hard and play by the rules don't have a fraction of what I have. I realize that I don't have my wealth because I'm so brilliant."
Movies, TV shows and popular media, and many politicians are reinforcing these myths by arguing and promoting the notion that anyone can be wealthy or make it to the top by virtue of their hard work and positive attitude and that's how successful people did it in the past. If this were true, we wouldn't see a virtual explosion of people buying lottery tickets, and governments using lotteries as a significant source of revenue.
It’s time to stop the rhetoric and do something about income inequality so there could be a real chance for meaningful social mobility.