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Income Inequality Impairs The American Dream Of Upward Mobility

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  • Why Can't Working Poor Lift Themselves Out of Poverty?

    Clip: Elise Gould argues with Edward Conard and Scott Winshop abouth whether upward socioeconomic mobility is blocked by growing income inequality.

  • Do the One Percent Make the Wealth Pie Bigger?

    Clip: Nick Hanauer attributes the concentration of profits to the wealthy as the cause of stagnating wages at the bottom. Edward Conard argues that redistribution will not raise median income.

Debate Details

Income inequality has been on the rise for decades. In the last 30 years, the wages of the top 1% have grown by 154%, while the bottom 90% has seen growth of only 17%. As the rungs of the economic ladder move further and further apart, conventional wisdom says that it will become much more difficult to climb them. Opportunities for upward mobility—the American dream—will disappear as the deck becomes stacked against the middle class and the poor. But others see inequality as a positive, a sign of a dynamic and robust economy that, in the end, helps everyone. And contrary to public opinion, mobility has remained stable over the past few decades. If the American dream is dying, is it the result of income inequality? Or is disparity in income a red herring where more complex issues are at play?

The Debaters

For the motion

Elise Gould

Senior Economist and Dir. of Health Policy Research, Economic Policy Institute

Elise Gould’s research areas include wages, poverty, inequality, economic mobility and health care. She is a co-author of The State of Working America... Read More

Nick Hanauer

Entrepreneur & Venture Capitalist

Nick Hanauer is one of the most successful entrepreneurs, investors, and managers in the Northwest, with over 30 years of experience across a broad... Read More

Against the motion

Edward Conard

Visiting Scholar, AEI & Former Partner, Bain Capital

Edward Conard is the author of the New York Times top-ten bestselling book Unintended Consequences: Why Everything You’ve Been... Read More

Scott Winship

Fellow, Manhattan Institute

Scott Winship is the Walter B. Wriston Fellow at the Manhattan Institute. Previously a fellow at the Brookings Institution, his areas of expertise... Read More

Where Do You Stand?

For The Motion
  • With economic growth funneled to those at the very top, the rest of America has suffered from stagnant and falling incomes.
  • According to EPI, "in 2010, the bottom 90 percent received only 55.5 percent of all income and held just 23.3 percent of all wealth."
  • As inequality grows, "the consequences of an accident of birth" become bigger. Only those at the top will have the resources to invest in their children's education and overall development.
  • Economic growth depends on consumption by the middle class, and as more and more Americans fall behind, the more volatile the economy becomes.
Against The Motion
  • Gains by some do not mean losses for others. While the wealthiest have benefited the most from economic growth, this point does not cancel out the fact that the living standards of most Americans are better now than they were in the past few decades.
  • Economists have found that despite increases in inequality, social mobility has not changed since the 1970s. In fact, research shows that there is no relationship between high inequality and low mobility.
  • A thriving economy needs income inequality. It's the wealthiest among us who take on risk and invest in the innovation that benefits everyone.

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The Research

The Research

A Guide to Statistics on Historical Trends in Income Inequality

Chad Stone
April 17, 2014

Data from a variety of sources contribute to this broad picture of strong growth and shared prosperity for the early postwar period, followed by slower growth and growing inequality since the 1970s. Within these broad trends, however, different data tell slightly different parts of the story.

Defending the One Percent

N. Gregory Mankiw
June 8, 2013

High earners have made significant economic contributions, but they have also reaped large gains. The question for public policy is what, if anything, to do about it.

Saving Horatio Alger: Equality, Opportunity, and the American Dream

Richard Reeves
August 20, 2014

Optimism about American opportunity may fade further as meritocracy comes under pressure from two sides: a growing economic divide between earned income and inherited wealth; and a growing social divide, marked by differences in family structure, education, and community.

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