To read the pronouncements of leading economic policymakers and commentators is to immerse oneself in a sea of despair and alarm over the state of the American Dream. President Obama lamented in his second inaugural address that “our country cannot succeed when a shrinking few do very well and a growing majority barely make it.”Footnote 1 His first Council of Economic Advisers chair, Alan Krueger, concurs, saying, “The lucky and the talented — and it is often hard to tell the difference — have been doing better and better, while the vast majority has struggled to keep up.”Footnote 2
A number of leading economists, otherwise rigorous and careful in their evaluation of evidence, make the policymakers seem sober-minded. Nobelist Joseph Stiglitz has warned that “with inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream — a good life in exchange for hard work — is slowly dying.”Footnote 3 Thomas Piketty, who, with his colleague Emmanuel Saez is the source of the ubiquitous “top one percent” inequality figures, foretells a stark future society riven by an unbridgeable class chasm:
These new high-income tax cuts, together with all the previous tax cuts . . . will eventually contribute to rebuild a class of rentiers in the U.S., whereby a small group of wealthy but untalented children controls vast segments of the U.S. economy and penniless, talented children simply can't compete.Footnote 4
Concern about declining social mobility in the United States is not confined to the political left. Charles Murray, of the American Enterprise Institute, fears that American society is “coming apart.”Footnote 5 He points to widening values gaps between those in the upper class, on the one hand, and poor and working class Americans on the other. The two groups have never looked so different in terms of family structure, employment, their commitment to abiding by the law, and their churchgoing. Other conservatives join Murray in emphasizing the importance of diverging patterns of family structure and marital success. Conservatives part ways with liberals as to the causes of declining mobility, whether unequal outcomes are evidence of unequal opportunities, and therefore whether government should do anything to address them. But there is widespread agreement that, descriptively, social mobility has declined in the United States.
What is distinctive of liberal accounts of the death of the American Dream, as illustrated by the quotes above, is the central place that rising income inequality occupies in them. Partly because the increase in income inequality shown by Piketty’s and Saez’s data has been so stark, and partly because self-identified liberals are overrepresented in academia and journalism,Footnote 6 with the onset of the Great Recession the liberal account of the nexus between income inequality and inequality of opportunity became the dominant one in public discourse.
This essay assesses the argument that rising income inequality in the United States has widened inequality of opportunity over the last several decades. It considers the evidence that income inequality has risen and between whom it has grown. The essay then summarizes the literature on trends in intergenerational economic mobility, looking at how the incomes, education levels, and occupations of adults are connected to those of their parents and whether the strength of these relationships has grown over time.
To preview the conclusion, the finding here is that while income equality and inequality of opportunity may be linked, the argument that increases in the former have exacerbated the latter is dubious. Some kinds of income inequality have grown in recent decades, but others have not, and it is unclear how much the pattern of increase bears on the opportunities of the poor and middle class. Most importantly, the totality of research suggests that intergenerational mobility in the United States has not fallen by much if at all, which challenges a presumption of many on the left and right.
I. Trends in Income Inequality
A first step in assessing whether rising income inequality has widened inequality of opportunity is to establish the facts around income inequality trends in the United States There are a variety of ways to measure income inequality, but it is particularly illustrative to consider rates of income growth for different parts of the income distribution (poor, middle, and rich) and how these rates of growth have changed over time. When assessing income change, it is important to compare similar points in the business cycle, since incomes fluctuate with the state of the economy. Figure 1 shows changes between business cycle peaks, when incomes are at their short-term high points. Doing so is convenient because these peaks have tended to come near the end of decades, which makes it straightforward to speak of “the 1980s,” for instance. Nevertheless, the business cycles are not all the same length, so all growth figures are presented in terms of annual rates.
Annual household income growth, 1948–2007.
Since 2007 was the last business cycle peak, the estimates stop with the onset of the Great Recession, which began in December 2007. Income data for poor and middle-class households only goes back to the late 1940s, so the peak year of 1948 is the starting point for the analyses. Figure 1 uses three different data sources, each of which is the best available for a specific period or part of the income distribution. Though there are conceptual and methodological differences between the three sources, none of them distort the comparisons between periods or parts of the distribution.Footnote 7
Figure 1 considers four different periods between 1948 and 2007. Each period is represented by a bar of a given shade of gray, and annual growth rates for each period are shown separately for different parts of the income distribution. Moving from left to right across the chart, income growth is shown for the bottom fifth of households, the next-poorest fifth, the middle fifth, the next-richest fifth, and finally for the top 5 percent of households. Focusing on bars of a specific shade compares the income growth experienced by poor, middle-class, and rich Americans within a period.
From 1948 through 1969, inequality fell — particularly between the top and everyone else. Growth rates for the bottom 80 percent were much higher than for the top 5 percent, and income growth was strongest for the bottom fifth of households. If the chart showed changes higher up the income distribution it would show that income growth even at the very top was lower than it was in the bottom 80 percent.Footnote 8 The 1970s, in contrast, were characterized by shared slow growth but little change in inequality. Incomes grew as much for the bottom fifth as for the middle, and they grew less in the top 5 percent than in the bottom 80 percent.
It is worth noting that the decline in income growth for the middle class and poor predates the spectacular rise in top incomes; the 1970s were not a particularly good decade for anyone.Footnote 9 Income growth for the top one percent of the top one percent was 2.4 percent annually during the decade (compared with 0.2 percent per year during the 1950s and 1960s and an astonishing 12.9 percent per year after 1979). The primary culprit behind slowed income growth during the 1970s was a corresponding decline in the rate of productivity growth. Changes in workers’ productivity levels — the value of what they produce for their employer — are a primary determinant of income growth. When workers become more productive, their wages tend to increase accordingly. From 1948 to 1969, productivity growth averaged 2.8 percent per year. That slowed to 1.7 percent from 1969 to 1979 (and then grew at the same rate from 1979 to 2007).
The top 5 percent pulled away from everyone else both from 1979 to 1989 and from 1989 to 2007, with growth rates comparable to those experienced by the bottom 80 percent in the 1950s and 1960s. Income growth was slow for the bottom 80 percent in both periods, but inequality within the bottom 80 percent only rose notably during the 1980s. From 1989 to 2007, annual income growth rates were essentially the same across the middle three-fifths of the income distribution and only somewhat lower for the bottom fifth. That is to say, income inequality within the bottom 80 percent of households has not grown appreciably since the 1980s.
Even from 1969 to 1989, inequality growth between the middle class and the poor can only be described as modest. By 2007, the average income of the middle fifth was 2.9 times the average income of the bottom fifth, but even in 1969 — more or less a low point for postwar inequality — it was around 2.5 times larger.Footnote 10 In the meantime, the average income of the bottom fifth rose by 55 percent between 1969 and 2007.
Other research examining hourly and weekly wages, annual earnings, and annual household income confirms that economic inequality between the middle class and poor has been stable since the 1980s. Jonathan Heathcote, an economist with the Federal Reserve Bank of Minneapolis, and his colleagues found that the ratio of the median male worker’s hourly wages to the tenth percentile of male hourly wages rose during the 1970s and first part of the 1980s but then fell.Footnote 11 It was no higher in 2005 than in 1985. Economist and current University of Wisconsin-Madison chancellor Rebecca Blank found that the ratio was 2.4 in 1979 and 2.5 in 2007.Footnote 12 Another team of economists, led by M.I.T.’s David Autor, found that the ratio was 1.9 in 1979 and 2.0 in 2005.Footnote 13 Autor and his colleagues found that the male 50/10 ratio for weekly wages rose from 2.0 to 2.2 over the period.
Hourly wage inequality between the middle class and poor does appear to have grown modestly among women since the 1980s. However, because inequality in annual hours worked fell among both men and women, annual earnings inequality was lower for both in 2007 than in 1979.Footnote 14 Pooling male and female workers together, Emmanuel Saez actually found that the 50/20 ratio of annual earnings was flat from 1953 to 1979 and then rose from 2.1 to just 2.2 by 2004.Footnote 15
Finally, Harvard’s Christopher Jencks found that the 50/10 ratio for pre-tax household income was no higher in 2007 than it was in 1987.Footnote 16 Congressional Budget Office estimates show the ratio of average post-tax household income for the middle fifth to average income for the bottom fifth peaking in 1986 and the 60/20 ratio peaking in 1987. Among households headed by a nonelderly individual with children, the middle-fifth-to-bottom-fifth ratio was 3.2 in 1987, 3.2 in 2004, and 3.0 in 2007.Footnote 17
The story at the top is different. The average income of the top 5 percent in 2007 was 2.5 times higher than in 1979, and the average of the top one percent was 3.5 times the 1979 average. For the top one percent of the top one percent, incomes were 8.8 times higher in 2007 than in 1979.Footnote 18
The causes behind the increase in incomes at the top are poorly understood.Footnote 19 Some argue that with global markets, a superstar economy has arisen in which it has become ever more important for companies to have the top performers rather than those just under them, pushing up their pay. Others suggest that corporate efforts to align CEO incentives with the firm’s best interests by tying executive pay to stock performance necessitate extra pay in exchange for the greater compensation risk.
Many explanations center around declining marginal tax rates. The link to rising after-tax income inequality is obvious, but tax rates can also affect pre-tax inequality. With lower taxes, top earners may have worked longer or harder and merited correspondingly higher pay; higher-productivity people may have increasingly been drawn into the highest-paying jobs. Declining tax rates made it cheaper for companies to raise the after-tax pay of top earners, because after-tax pay would be bigger for a given pre-tax compensation package. Lower marginal tax rates also increased top earners’ incentives to negotiate for more income.
Finally, other researchers suggest an erosion of norms and weakening of institutions that constrained the incomes of those at the top. Union membership has declined steadily since the 1950s, and the value of the minimum wage has declined. Politically, economic conservatism has strengthened since the 1960s. Alternatively, Americans may have simply become more willing to tolerate income inequality — and less supportive of unions or the minimum wage — as they have grown richer over time.
One cultural change that may be important is what economist Claudia Goldin has called the “Quiet Revolution” of rising female labor force participation.Footnote 20 Running through the histories of minimum wage policy and union growth is a widely shared concern with the maintenance of the male breadwinner model. In this regime, men were paid a premium over and above their competitive wage, single women were paid less, and married women were generally expected not to work. The intent was to support and enforce norms that placed responsibility for childrearing on women and discouraged two-worker families. Discussions around the minimum wage early in the twentieth century proposed a higher minimum for men than for single women. Union demands regularly returned to calls for a “family wage” for men. Union contracts often specified that female workers were to be let go upon getting married.
This regime broke down as labor force participation increased among married women in the 1970s and 1980s and with the growing intensity of global competition. But by then, the wages of male workers had been unjustifiably high for decades, particularly after outpacing productivity growth in the 1940s, 1950s, and 1960s in the wake of the Wagner Act.Footnote 21
If top incomes were pulled downward by higher-than-justifiable worker pay during the family-wage regime, then the dramatic rise of top incomes may best be viewed as a “Great Correction.” Recent decades have seen male workers’ wage growth slow markedly while productivity levels catch up, robust increases in female workers’ wages, and incomes at the top soaring to make up for decades of artificially low growth stemming from the patriarchal consensus of an earlier era. If this analysis is correct, it is a mistake to think of the last sixty years in terms of two thirty-year periods, one characterized by equality the other by disparity. It also suggests a brighter future for working- and middle-class income growth; once the Great Correction runs its course, pay should increase with productivity growth once again and income inequality may level off.
This interpretation of the evolution of work and wages among men and women, husbands and wives, is much different than the conventional account. Most commentators believe that male earnings have stagnated unjustifiably, forcing families to send a second earner into the workforce — or necessitating that wives work more than they would prefer — to maintain their living standards.
There are several problems with the conventional account, however. For starters, trends around the industrialized world suggest that women have been eager to devote more time to work as a way of achieving greater fulfillment and more balance in their lives. Their educational attainment rates have risen, they have delayed marriage, and their fertility has declined.
Second, the patterns of husbands’ and wives’ employment do not accord with the idea that greater work among women has been economically coerced. Work has risen most among women with the best-educated husbands, not among wives of lower-skilled men, who are likely to have more employment problems and lower wages.Footnote 22 The decisions of married women to work have become less sensitive to husband’s earnings over time, not more.Footnote 23 While the working hours of married men have declined over the long run, those of single men have not, suggesting that husbands have become more economically comfortable, not less.Footnote 24
Third, measured appropriately, male earnings have not, in fact, declined since the 1960s. Median annual compensation (including fringe benefits) among working-age men who are either in the labor force, interested in working, or who probably should be looking rose by 10 to 20 percent between 1969 and 2007.Footnote 25 Living standards would have risen somewhat even if women had not worked more, and had they not worked more, men’s earnings would probably be higher today thanks to the reduced supply of workers. It is true that many two-worker families with children bear the additional expense of child care, but even when the burden leaves a family only modestly better off than they would be with one earner, for many women, that is a cost they are willing to bear to have some professional or vocational fulfillment — a benefit that does not show up in statistics when comparing 1950s and 1960s incomes against today’s.
To summarize, income inequality within the bottom 80 percent of households has risen only modestly since World War II, and only during the 1970s and 1980s. Since the 1980s, it has been largely stable. Inequality between the richest one or 5 percent of households and everyone else has increased markedly since the 1970s (though perhaps less than the conventional figures suggest).Footnote 26 However, this increase in inequality between the top and “the 99 percent” did not coincide with stagnant incomes at the bottom or in the middle; both groups were significantly better off in 2007 than in 1979.
By itself, this evidence raises strong doubt that rising income inequality has increased inequality of opportunity. The top one percent is a small enough group that the competitive advantages it confers on its children cannot greatly affect the access of poor and middle-class children to desirable positions. But the evidence on intergenerational mobility trends drives a second stake into the claim’s heart.
II. Trends in Intergenerational Economic Mobility
“Economic mobility” is an ambiguous concept. One basic distinction is between intergenerational mobility, which compares adults to how their parents were doing at the same age, and intra-generational mobility, which compares adults’ outcomes at two points in their own life. This essay focuses on intergenerational mobility as a basic indicator of whether children can transcend their origins.
Another distinction is between “absolute” and “relative” mobility. Upward absolute mobility refers to the possibility of children seeing gains over and above the levels of their parents. How other children do (absolutely or measured against their own parents) has no bearing on one’s absolute mobility. If parental income at some age was $30,000 and a grown child’s income at the same age is $50,000 (after accounting for the increase in the cost of living), she has experienced upward absolute mobility.
Upward relative mobility refers to positional gains children make over and above the position their parents occupied. A child can experience absolute gains without experiencing positional gains because other children might see even bigger absolute gains. Put another way, the thirtieth percentile — the income of the person richer than 30 percent of people but poorer than 70 percent of people — tends to rise over time. Parents at the thirtieth percentile can have children at the thirtieth percentile who are nevertheless richer than they were.
There is no objective basis for privileging absolute or relative mobility over the other in a general sense. Being higher paid than one’s father is beneficial even if both father and son are janitors at the tenth percentile. But the son might have preferred once to become a lawyer. An important distinction between absolute and relative mobility is that upward relative mobility for one person requires downward relative mobility for another. Not everyone can be above average.Footnote 27
Absolute and relative upward and downward mobility can be measured for individuals and for subgroups. An alternative way of measuring mobility looks at an aggregate population and views the total absolute mobility in the population (in any direction) as dependent on its level of “structural” mobility and its total relative mobility (amount of re-ranking). Structural mobility occurs when the distribution of positions or outcomes changes between the generation of the parent and that of the child. Over time, job growth might result in more “good jobs” and fewer “bad” ones. Income inequality might rise or fall, or incomes might uniformly increase or decline. Educational attainment might rise. In contrast, relative mobility relates to the movement that occurs not because the outcome distribution changes, but because the link between parent and child outcomes weakens or strengthens.
There are research literatures focused on intergenerational mobility trends in terms of education, occupation, and earnings and income. The educational mobility literature is much thinner than the literature on either occupational mobility or earnings and income mobility, and focuses on absolute mobility. Recent research that examines whether or not children are less likely to surpass their parents’ educational attainment than in the past reveals that after rising during the first half of the twentieth century, absolute educational mobility peaked around 1950.Footnote 28 For sons born between 1950 and 1960, it became less likely that one would exceed one’s father’s educational attainment. Over the next twenty years there was little change. Between 1950 and 1970, the fraction of men with less schooling than their father also increased. The trends for women were similar. As of 2005, about half of twenty-five-year-olds (born in 1980) exceeded their father’s schooling while less than a fifth did worse than their father.
However, aggregating those whose parents had high and low levels of education obscures important context for this declining absolute mobility. The rise in downward absolute educational mobility and the decline in upward mobility was primarily due to the children of college graduates being less likely to get a bachelor’s degree themselves over time, combined with the increase in the percentage of fathers with a college degree.Footnote 29 That is, “worsening” absolute educational mobility in the aggregate appears to have been benign or opportunity equalizing. As educational attainment increased, more and more schooling was required to surpass one’s parents, and as growth in educational attainment plateaued, upward educational mobility stabilized at a lower rate than the previous peak.Footnote 30
Turning to occupational mobility, the picture is similar. The high point for absolute occupational mobility among white men appears to have occurred for cohorts born around 1940, with upward mobility becoming more common and downward mobility less common through the cohorts of the 1960s.Footnote 31 Absolute mobility apparently leveled off with the 1970s cohorts.Footnote 32 The evidence suggests that structural mobility plateaued as the transition to an industrial economy completed.Footnote 33 Without a structural upgrading of jobs, upward absolute mobility could not become more common unless upward relative mobility increased (which would also increase downward relative mobility elsewhere). Put another way, while structural mobility was increasing and the occupational structure evolving to produce better types of jobs, relative mobility (re-ranking) could fall without upward absolute mobility declining. While the evidence on long-term trends in relative mobility is something of a mess, the latest research suggests that it may have fallen over the twentieth century.Footnote 34 The methods of the occupational mobility literature do not generally allow for measures of upward or downward relative mobility to be estimated.
It is easy to overstate the magnitude of the decline in occupational mobility, particularly since the coding of occupations into better and worse jobs is an imprecise science with numerous methodological and conceptual challenges. The percentage of sons experiencing downward absolute mobility rose between the birth cohorts of the 1930s and 1960s, but only from 25 percent to 33 percent.Footnote 35 And it is possible to experience downward absolute mobility in terms of occupation while still experiencing upward absolute mobility in terms of earnings; adults can have lower-status jobs than their parents but still make more money due to economic growth.
More importantly, declining absolute occupational mobility — even declining upward occupational mobility — could mask increasing equality of opportunity, as it has for educational mobility. These aggregate indicators combine the experiences of sons born to men with good and with bad jobs. There is not much evidence at all as to whether upward mobility has declined because it has become lower among the sons of men with the worst jobs, with middle-class jobs, or with the best jobs. What little evidence we do have suggests that declining occupational mobility has also been opportunity equalizing. Evidence suggests that the biggest change between the calendar years of 1972–1975 and 1982–1985 involved more downward mobility from the top.Footnote 36
Finally, a number of studies have considered whether intergenerational earnings or income mobility has increased. Research on trends in absolute earnings and income mobility (hereafter, simply absolute “income mobility”) tends to use regression coefficients as metrics, which indicate the average additional boost to earnings or income from having higher parental income. When this so-called “intergenerational elasticity” increases over time, it indicates that changes in absolute mobility have made the adult incomes of rich and poor children more unequal, but the elasticity cannot tell us how upward and downward mobility from different parts of the income distribution have changed.Footnote 37
The literature on income mobility indicates that the trend in absolute mobility made adult incomes of rich and poor children more equal between roughly 1915 and the late 1940s.Footnote 38 The evidence for cohorts born after the late 1940s diverges depending on the data used. Most of this research relies on the University of Michigan’s Panel Study of Income Dynamics. Some of the analyses look at sons’ earnings, and others at their family income, but all find either no clear trend for birth cohorts over the 1950s, 1960s, and early 1970s or mobility changes that had an equalizing effect on disparities between rich and poor children (generally not statistically significant).Footnote 39
In contrast, two studies use the Bureau of Labor Statistics’ National Longitudinal Surveys. Both find that mobility changes between cohorts born, on the one hand, in the late 1950s and early 1960s and those born, on the other hand, in the 1940s and early 1950s exacerbated income disparities between rich and poor children.Footnote 40 However, in ongoing work, I find that the diminished mobility between these two cohorts was followed by an increase in mobility in the next National Longitudinal Survey panel, representing children born in the early 1980s.Footnote 41 My results indicate little change in the economic mobility of men between birth cohorts from 1948 to1950 and those from 1980 to 1982.
Another study relies on decennial census data and also finds disequalizing changes in absolute economic mobility through the birth cohorts of the early 1960s.Footnote 42 But it finds that changes in mobility reduced disparities between rich and poor children between the early 1960s and early 1970s cohorts. The authors discount the increase at the end due to methodological issues, but interestingly, the mobility levels they estimate for the late 1940s and early 1970s cohorts are fairly similar. This is the same pattern I find in the National Longitudinal Surveys.
Little research has been done on trends in relative income mobility. In my ongoing research, I find very little change between the late-1940s and early-1980s cohorts. Upward mobility from the bottom was stable, as was downward mobility from the top and upward and downward mobility from the middle. The latest study on income mobility trends used tax return data and found that changes in relative mobility between cohorts born in the early 1970s and in the mid-1980s had no effect on relative income disparities between rich and poor children.Footnote 43 It also finds no change in upward mobility from the bottom four fifths of the parental income distribution to the top fifth of the child distribution and no change in downward mobility out of the top fifth of parental income.Footnote 44
These results provide little reason to think that rising inequality has hurt intergenerational mobility. To the extent that upward absolute mobility has fallen, it preceded the recent rise in income concentration and the earlier increase in inequality within the bottom 80 percent. There is good reason to think that these declines actually indicate that opportunities became more equal because they were concentrated among children who started out advantaged. During the period that inequality rose, upward absolute mobility stabilized. The primary explanation for the drop in upward absolute mobility probably lies in the end of the era of industrialization. As the rate at which the economy produced professional and managerial jobs and destroyed farming and unskilled laborer positions diminished, it became relatively more likely that people would move down rather than up; more recent birth cohorts are more likely to be born to men with good jobs, and the rate of growth of these jobs has declined, so there is more opportunity for sons to move down than up even further.
The evidence that relative mobility has fallen is confined to occupational mobility, and it is decidedly mixed. Income mobility trends indicate virtually no change since the mid-twentieth century.Footnote 45
III. Conclusion
The claim that rising income inequality is exacerbating inequality of opportunity is made so casually and with such frequency that for all intents and purposes, it has become a stylized fact. The premises of the claim go uncontested while political argument about inequality revolves around the moral implications of this cause-and-effect and practical policies to mitigate the problem. But rising income inequality need not worsen inequality of opportunity.
The literatures on intergenerational mobility suggest that in the aggregate, upward mobility peaked for men born between 1930 and 1950. However, it does not establish that the upward mobility of poor and middle-class children fell thereafter. In the case of occupational and educational mobility, where industrialization’s completion effectively capped the rate of increase in occupational and educational upgrading, there is more downward mobility between generations and less upward mobility because more parents start from heights attained by few in previous generations. There are hints in these literatures that the decline in upward mobility has reduced disparities between rich and poor children rather than increasing them, because the worsened mobility has been concentrated among men from advantaged backgrounds. In the case of income mobility, the evidence we have on upward and downward mobility trends from different points in the distribution of parental incomes shows little change for men born since 1950.
Trends in income inequality also fail to align with intergenerational mobility trends in the way that we would expect if rising income inequality has hurt the opportunity of the poor and middle class. Inequality within the bottom 80 percent of the population rose only after the 1960s, by which time peak upward absolute mobility may have occurred decades earlier. This type of inequality then rose only modestly, and stopped rising in the 1980s. Meanwhile, income mobility was stable over the whole period, and declines in occupational and educational mobility leveled off.
Most research indicates that income inequality between the top one percent and “the 99 percent” rose dramatically after 1980, but it is unclear that disparities between the top and everyone else should be as consequential for the opportunities of the poor and middle class as disparities within “the 99 percent.” More to the point, sons born in the early and mid-1980s have experienced no less mobility than their counterparts born in the early 1970s or even the late 1940s, despite having experienced rising inequality.
This last finding is relevant for assessing one argument that could be raised against the evidence presented here — namely, that we will not observe the achieved mobility of children born today for several decades. Income inequality will almost certainly remain at its contemporary levels rather than fall, and increases would surprise no one. But today’s thirty-year-olds not only experienced rising inequality over their early childhoods (within “the 99 percent”) and into their college-going years (between “the 99 percent” and the top one percent), they also entered the labor market in the supposed “lost decade” of the aughts. If rising income inequality in the future will hurt today’s children, the effects of ostensibly experiencing dramatic income inequality growth should have appeared among today’s thirty-year-olds.
Simply put, nothing in our economic history over the past several decades suggests that high or even rising inequality will chip away at the American Dream. That does not mean that we should be unconcerned about inequality of opportunity. Among today’s middle-aged adults, only 30 percent of those who were raised in the bottom fifth made it to the middle fifth.Footnote 46 But we should worry about inequality of opportunity because it is too great, not because it is worsening as income inequality grows.
