January 15, 2012
How Fares the Dream?
By PAUL KRUGMAN
“I have a dream,”
declared Martin Luther King, in a speech that has lost none of its power to
inspire. And some of that dream has come true. When King spoke in the summer of
1963, America was a nation that denied basic rights to millions of its
citizens, simply because their skin was the wrong color. Today racism is no
longer embedded in law. And while it has by no means been banished from the
hearts of men, its grip is far weaker than once it was.
To say the obvious: to
look at a photo of
President Obama with his cabinet is to see a degree of racial openness — and
openness to women, too — that would have seemed almost inconceivable in 1963.
When we observe Martin Luther King’s Birthday, we have something very real to
celebrate: the civil rights movement was one of America’s finest
hours, and it made us a nation truer to its own ideals.
Yet if King could see
America now, I believe that he would be disappointed, and feel that his work
was nowhere near done. He dreamed of a nation in which his children “will not
be judged by the color of their skin but by the content of their character.”
But what we actually became is a nation that judges people not by the color of
their skin — or at least not as much as in the past — but by the size of their
paychecks. And in America, more than in most other wealthy nations, the size of
your paycheck is strongly correlated with the size of your father’s paycheck.
Goodbye Jim Crow,
hello class system.
Economic inequality
isn’t inherently a racial issue, and rising inequality would be disturbing even
if there weren’t a racial dimension. But American society being what it is, there are racial implications to the way our incomes have been pulling
apart. And in any case, King — who was campaigning for higher wages
when he was assassinated — would surely have considered soaring inequality an
evil to be opposed.
So, about that racial
dimension: In the 1960s it was widely assumed that ending overt discrimination
would improve the economic as well as legal status of minority groups. And at
first this seemed to be happening. Over the course of the 1960s and 1970s
substantial numbers of black families moved into the middle class, and even
into the upper middle class; the percentage of black households in the top 20
percent of the income distribution nearly doubled.
But around 1980
the relative economic position of blacks
in America stopped improving. Why? An important part of the answer, surely,
is that circa 1980 income disparities in the United States began to widen
dramatically, turning us into a society more unequal than at any time since the
1920s.
Think of the income
distribution as a ladder, with different people on different rungs. Starting
around 1980, the rungs began moving ever farther apart, adversely affecting
black economic progress in two ways. First, because many blacks were still on
the lower rungs, they were left behind as income at the top of the ladder
soared while income near the bottom stagnated. Second, as the rungs
moved farther apart, the ladder became harder to climb.
The Times recently reported on
a well-established finding that still surprises many Americans when they hear
about it: although we still see ourselves as the land of opportunity, we
actually have less intergenerational
economic mobility than other advanced nations. That is, the chances that
someone born into a low-income family will end up with high income, or vice
versa, are significantly lower here than in Canada or Europe.
And there’s every
reason to believe that our low economic mobility has a lot to do with
our high level of income inequality.
Last week Alan
Krueger, chairman of the president’s Council of Economic Advisers, gave an
important speech about income inequality, presenting a relationship he dubbed
the “Great Gatsby Curve.” Highly unequal countries, he showed, have low
mobility: the more unequal a society is, the greater the extent to which an
individual’s economic status is determined by his or her parents’ status.
And as Mr. Krueger pointed out, this relationship suggests that America in the
year 2035 will have even less mobility than it has now, that it will be a place
in which the economic prospects of children largely reflect the class into
which they were born.
That is not a
development we should meekly accept.
Mitt Romney says that
we should discuss income inequality, if at all, only in “quiet rooms.” There
was a time when people said the same thing about racial inequality. Luckily,
however, there were people like Martin Luther King who refused to stay quiet.
And we should follow their example today. For the fact is that rising
inequality threatens to make America a different and worse place — and we need
to reverse that trend to preserve both our values and our dreams.
