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What Happened to Social Mobility in America?
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What Happened to Social Mobility in America?

A New Aristocracy Has a Lock on Capital and Jobs

Branko Milanović
Foreign Affairs, 2021
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Those seeking the American Dream historically fell into two camps: wage earners and capital owners. For generations, these groups pursued financial and social mobility according to their respective class association. But since 1980, this framework has unraveled, writes professor Branko Milanović in this illuminating article. He argues that those who possess both human and financial capital are closing ranks to become a “new aristocracy.” He examines the transformation of US economic and social mobility, and the societal implications emanating from a new wealth hierarchy.

Summary

Throughout economic history, people have acquired income either through their professions or from returns on invested capital.

Upward economic and social mobility is a foundational element of the American ethos. Individuals seek the opportunity to earn more, live in thriving neighborhoods and pass on a better life to the next generation. This is the American Dream. And while each person’s vision is unique, from an economist’s perspective, individuals in this pursuit have historically associated with one of two groups: wage earners or capital owners.

Rarely did these two camps converge, but beginning in 1980, that began to change. In 1980, only 15% of individuals in the United States reached...

About the Author

Branko Milanović is an economist and a visiting professor at the City University of New York. He also teaches at the London School of Economics and the Barcelona Institute for International Studies.

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