Summary
We talk a lot about the economy, how it’s doing, and the impact it has on our lives. Rightly so, because the economy is has always been an important institution that details how we get what we need to live. Humans have transitioned through many structural shifts, moving along the continuum from hunter-gather societies to our current post-industrialization and globalization. Currently, there are an array of economies, just as there are varieties of governments. While the United States frequently emphasizes the American Dream and the ideal that even Americans born into poverty can work their way up the economic ladder, recent studies show that economic mobility is not easily accomplished.
One way to assess if the American Dream is a reality is to examine mobility patterns. If mobility really is about hard work and merit, we would expect that individuals have an equal chance at moving up and down the class hierarchy. The following video from the PEW Economic Mobility Project helps us by providing visual animations that depict income mobility. It looks at how absolute mobility (when a person earns more money in inflation-adjusted dollars than their parents did at the same age) and relative mobility (a person’s rank within the income distribution as a whole) work—while also highlighting how both types of movement relate to American Individualism. It shows that the U.S. is doing well in absolute mobility, but not relative mobility. When explaining relative mobility, the video highlights “stickiness at the ends” by showing how there is a great deal of movement in the middle classes—but the poor and the wealthy at the top and bottom of the social hierarchy tend to experience little if any movement both within, and across generations. In other words, where you start can have a big impact on where you end up.
What you learned to do:
- Differentiate between economic systems and discuss theoretical views of economics
- Define globalization and describe its manifestation in modern society
- Describe working conditions in the United States
