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Gov. Jeb Bush may or may not run for president in 2016, but he was certainly active in the 2014 elections. Not only did he campaign for other candidates, but he was doing fundraising for his Foundation for Excellence in Education.
An October mailer he signed focused on the economy, a top concern for voters.
"Americans could always count on hard work leading to higher incomes and improved lives. The American dream was real and within reach," Bush said in the letter. "But today, among the developed nations, we are the least economically and socially mobile country in the world."
Bush goes on to say fixing an ailing education system is key to turning things around for children and the country.
There’s no question times have been tough the last decade or so, but is the American dream really that unattainable? We decided to work really hard to improve our lives by finding out the answer.
First of all, we should point out that while social mobility and economic mobility are technically two different things, Bush is looking at them under the same umbrella -- a person’s ability to better their circumstances as measured by income. So that’s how we’ll look at them, too.
His foundation didn’t have to dig deep to find experts who claimed the United States is lagging behind its global peers. They sent several articles and reports they said informed the claim, so we examined those.
We’re not going to sugarcoat it for you, folks, because there’s plenty of evidence Bush’s assertion is on the money (so to speak).
A 2006 study led by a Swedish economist compared earning potential across generations among the United States, the United Kingdom and Nordic countries. It determined that American men raised in the bottom fifth of family incomes had a 42 percent chance of staying there, considerably higher than the other countries (Britain was next at 30 percent). Only 8 percent rose to the top fifth in the U.S., the lowest in the study. In countries like Finland, Denmark and Sweden, that number is closer to 15 percent, almost twice as much as in America.
University of Ottawa economist Miles Corak in 2006 reviewed several studies about generational income mobility -- that is, whether you will make more or less money depending on how much your parents made. Again, the United States came up last.
"The United States, the United Kingdom, and to a slightly lesser extent France, stand out as being the least mobile societies, with 40 to 50 percent of fathers’ earnings advantage being passed on to sons," Corak wrote. "At the other extreme are Denmark, Norway, Finland, and Canada with about 15 to 20 percent of earnings advantage passed across generations, and in an intermediate position Germany and Sweden with about 30 percent."
There is some debate about whether generational income mobility is a proper measure of mobility, especially because social structures and salary trends vary from country to country, but it does look as if the States aren’t as mobile as they once were.
A Brookings Institution study from 2007 found that only 6 percent of American children born at the bottom of the income ladder moved to the top. Almost half of kids born in the bottom fifth of family income didn’t move up, while 39 percent in the top fifth stayed at the top. A third of kids moved up in brackets, sure, but another third moved down.
The Economic Mobility Project of the Pew Charitable Trusts found similar numbers in 2009, widening the field a bit: 62 percent growing up in the top fifth stayed in the top two fifths, while 65 percent raised in the bottom fifth stayed in the bottom two fifths. These numbers showed things have gotten worse in recent years for Americans trying to move up in the world.
Essentially, if you were born to a richer family, you had a good chance of staying there. If you were born into a poorer family, good luck. That trend is much more defined in America than it is in other countries.
Wait, it gets worse
Now let’s remember Bush wrote "among the developed nations." All the things we’ve looked at so far have stuck to European countries and Canada.
But that’s okay, because University of Wisconsin economist Timothy Smeeding told us we can say plenty more countries beat us, too.
He pointed us to the Great Gatsby Curve, a concept championed in 2012 by former chairman of the president’s Council of Economic Advisers Alan Krueger, an economist at Princeton. The curve, named after the 1925 F. Scott Fitzgerald novel about class-hopping romantic Jay Gatsby, used data from Canadian economist Corak to determine mobility in terms of "intergenerational income elasticity" against several nations’ inequality by income distribution, called the Gini coefficient.
The curve usually includes 23 countries, most of which are Western, and shows the United States lags behind other developed countries like Italy, Japan, Switzerland and New Zealand. Countries considered even less mobile than America include China, Brazil, Argentina and Chile.
"Amongst the rich countries, Bush is right," Smeeding told PolitiFact Florida. "There are no rich countries, save tiny Singapore, whom lie to the right of the USA."
With that data in mind, it’s hard to find fault with Bush’s argument, according to Isabel Sawhill, co-director of the Center on Children and Families and the Budgeting for National Priorities Project at Brookings.
"It's a bit over the top but consistent with much of the evidence," she said.
Bush said "among the developed nations, we are the least economically and socially mobile country in the world."
His Foundation for Excellence in Education sent us a few stories backing up the claim on a broad level. We found even more data suggesting that yes, America does lag behind most every developed country in terms of being able to move from the bottom rungs of the income ladder to the top.
Experts we talked to said it was a fair claim, although we must note there is some disagreement on how mobility is measured and minor differences among studies.
We rate the statement True.
Foundation for Excellence in Education, fundraising letter from Jeb Bush, received Oct. 27, 2014
Institute for the Study of Labor, "American Exceptionalism in a New Light: A Comparison of Intergenerational Earnings Mobility in the Nordic Countries, the United Kingdom and the United States," January 2006
Institute for the Study of Labor, "Do Poor Children Become Poor Adults? Lessons from a Cross Country Comparison of Generational Earnings Mobility," March 2006
Brookings Institution, "Economic Mobility of Families Across Generations," November 2007
New York Times, "Harder for Americans to Rise From Lower Rungs," Jan. 4, 2012
New York Times, "The Great Gatsby Curve," Jan. 15, 2012
New York Times, "Equal Opportunity, Our National Myth," Feb. 16, 2013
National Review, "The Great Gatsby Curve: Not So Great After All," Aug. 21, 2013
Businessweek, "The Gatsby Curve: How Inequality Became a Household Word," Dec. 12, 2013
Pew Charitable Trusts, "Economic Mobility and the American Dream: Where Do We Stand in the Wake of the Great Recession," May 19, 2014
Pew Charitable Trusts, "Pew Finds Generation X Facing an Insecure Financial Future," Sept. 18, 2014
Interview with Jaryn Emhof, Foundation for Excellence in Education spokesperson, Nov. 4-5, 2014
Interview with Timothy Smeeding, University of Wisconsin economics professor, Nov. 1, 2014
Interview with Isabel Sawhill, Brookings Institution economist, Nov. 5, 2014
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