Wealthy Kids Pulling Away: Accelerating Privilege, Compounding Disadvantage

How does the system of class advantage reproduce itself, generation after generation?

Let me count the ways.

I have an article in the latest issue of American Prospect called “The New Politics of Inherited Advantage.” I summarize the mountain of growing research demonstrating how affluent families engage in what sociologists call the “intergenerational transmission of advantage.”I tell the stories of four 21 year olds and how the different levels of family help they receive largely determine their economic prospects.

The story goes like this: as wealth inequalities grow, two things happen that undermine equality of opportunity.  First, affluent families help their kids in dozens of ways to get a leg up in preparing for school, getting into selective colleges and launching decent paying careers.  They pull further and further ahead.

Secondly, we cut taxes on the wealthy and disinvest the public sector and the social investments that give non-affluent households opportunities, such as 0-6 preschool, decent K-12 education and access to college or vocational skills.  Those who are not fortunate enough to have wealthy parents lose some of the tools needed to advance up the economic ladder.

The “politics of inherited advantage” is the dynamic between wealth holders and policy priorities.  Wealthy families have disproportionate wealth and power in our political system. But because they have privatized their education and opportunity needs, they have a reduced stake in paying progressive taxes and making the kinds of social investments that fostered the period of shared prosperity in the 30 years after World War II.  Think debt free college educations, Head Start, subsidized fixed-rate home mortgages, and well-funded public universities, state universities and community colleges.

As wealth concentrates, this cycle worsens.  Affluent families transfer more and more advantages to their children.  At the same time, public investments decline, eroding the mobility of the non-rich.  Advantages accelerate for wealthy children while disadvantages compound for everyone else.

The solution is public policies that directly reduce the concentration of wealth and restore and expand public investments and charitable expenditures that expand opportunity for all.

If we’re serious about breaking the cycle of inequality and unequal opportunity, we need a robust inheritance tax on wealth over $10 million, progressive income taxes, a financial transaction tax, and a clamp down on the off-shore tax system that enables wealthy people and global corporations to avoid their fair share of taxes.

We should make renewed investments in enabling students to graduate debt free from college and receive paid internships in occupations in their field.  A full program for reducing inequality can be found in my book, 99 to 1: How Wealth Inequality is Wrecking the World and What We Can Do About It.

As social mobility has declined in the U.S., it has increased in Europe and Canada. If you are not born rich, but want to find the American Dream today, the lesson is clear: move to Canada.

 

 

 

 

 

 

 

 

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