America: Land of Class Conflict and Limited Opportunity?

America: Land of Class Conflict and Limited Opportunity?

Two recent findings about our country have our rose-colored glasses hitting the pavement.

The first by the Pew Research Center showed that two-thirds of Americans believe that the class divide between rich and poor is now the biggest concern in our country—more pressing than either racial strain or immigration conflicts, two issues that have historically challenged the country.

With Occupy Wall Street in the news, maybe that wasn't such a big a shocker. But prepare yourself for the second finding, which is actually the conclusion of several studies and upends conventional wisdom: Class mobility here is weaker than in Canada or Europe.

In the Land of Opportunity, it turns out our opportunities are more limited and our class conflicts greater than we think.

The Clash of the Classes

The Pew Research Center surveyed 2,048 people and found that a large majority noted "strong conflict" between the stratified social classes. And the number of people who think so has surged by 50% from only two years ago.

But the fact that they see that this conflict exists doesn't mean they feel hostility themselves—or necessarily support government action to reduce income inequality. Interestingly, the survey also indicated that negative responses to statements like, "The rich are wealthy mainly because they know the right people or were born into wealthy families" —which might point to resentment or hostility—have remain largely unchanged in the past two years.

(Not) Movin' on Up

Conventional wisdom says that rigid class structure is a hallmark of countries like Great Britain or India. The U.S. is the scrappy younger cousin, brimming with potential and offering opportunity to every resident on the condition of hard work. But it turns out that common wisdom is more like common misperception.

For instance, one of several studies showing that the U.S. is less socially mobile than other countries found that 42% of American men from the bottom fifth of income levels are still there as adults, compared to 25% in Denmark and 30% in Britain. Those born in the top and bottom fifths tend to be especially ensconced in their given place. (This New York Times illustration shows just how entrenched.) Some of the reasons researchers present are:

  • The depth of American poverty means that poor children in the U.S. start with an exaggerated disadvantage.
  • Educated workers benefit from an uneven distribution of pay, but education is so expensive it’s difficult to attain.
  • Common public health problems in the U.S., such as obesity and diabetes, can interfere with education and employment.

But Are We Really Stuck?

By all appearances, we're experiencing a lack of social mobility and tension between camps. But is that actually the case? As with any study, holes are being poked.

The results are being doubted mainly because:

  • These studies measure relative mobility, meaning how far children remove themselves from their parents’ social class—not how much money they have. According to another Pew study, 81% of Americans have more money than their parents (although lately it hasn’t seemed that way).
  • Immigrants, who traditionally illustrate upward mobility at an impressive rate, are eliminated from the sample because the study needs two generations of data.
  • Rival countries like Denmark experience “income compression,” which means a smaller amount of money lets them move higher up the social ladder. A larger purse would be required for the same move in the U.S.

Uncertain, but Acknowledged

The evidence is there—both that there's a problem and that on some level, we're aware of it. But when we take into account the reservations presented by skeptics, perhaps our sticky social structure isn't actually set in stone.

Tell us: Is it? Do you think social mobility in the U.S. is low and class tension is high? Or are the studies based on false premises leading us to inaccurate conclusions?

More From LearnVest

The U.S. and Iran enter a standoff over our most precious resource: oil.
Why isn't congressional information considered insider trading?
Use these easy steps to feel better about your money, instantly.

Learnvest

Financial planning made simple.

Get your free financial assessment.

Related Tags

Get the latest in your inbox.

Subscription failed!

You're Now Subscribed!