Look at a list of rags-to-riches billionaires, from Oprah to Starbucks CEO Howard Schultz, from immigrant investor George Soros to Jay-Z, and you’ll see a common thread. They all, by definition, made it. Hence, their classic American stories are self-fulfilling tales that allow them to package stories about their hustle and hard-won riches as an example to others.
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While such biographies are inspiring, and are frequently touted in business self-help advice, they don’t represent the stories of most Americans. They are hold-overs of an era past. In reality, the U.S. ranks among the lowest of all developed countries in terms of the potential for upward mobility, despite clinging to the mythology of Horatio Alger. The Declaration of Independence may promise us all the pursuit of happiness, but if you’re born poor, you’re probably going to stay poor. Or, as Malcolm Gladwell puts it, “nowadays, we don?t learn from poverty, we escape from poverty.”
In the U.S., someone born in the lowest economic bracket has about a 8% chance of making it to the top. That actually isn’t a new phenomenon; a study last year found that the odds of making it have been just as low for about half a century. In the late 1800s, it might have been true that a penniless immigrant moving to the U.S. from, say, England, would have had better chances in the New World. But upward mobility in America has been declining since the 1920s.
?If you’re born poor, you’re probably going to stay poor.”
In Denmark, the odds of making it are now about twice as high as the U.S. Of course, Denmark is a much smaller and very different country. “You’re never going to turn the United States into Denmark,” says Miles Corak, a visiting professor of economics at Harvard University who studies intergenerational mobility.
But the same differences show up in places like Canada, which is more similar to the U.S. in other ways. Take the most basic metric?the adult salaries of parents’ versus their children’s. “It’s a rough indicator of how sticky your earnings are to your parents’ earnings,” says Corak. “According to that measure, the U.S. is half as mobile as Canada.”
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