An excerpt from the president’s State of the Union address tonight, released ahead of his speech:
Today, after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled. The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by – let alone get ahead. And too many still aren’t working at all.
Inequality has indeed deepened under President Obama, which shouldn’t be terribly surprising: During economic booms over the last few decades, income inequality in the United States (before accounting for taxes and transfers) has increased. The U.S. was a pretty unequal place before the president took office, and he is not primarily responsible for the increase in inequality since then. But what is remarkably mendacious here is the claim that “upward mobility has stalled” — presumably, he thinks, because of increased inequality.
It’s unclear how this gets past the presidential research department, because there are two huge problems with it: First, it’s basically impossible to measure change in “upward mobility” over the short time frame he’s describing (if he’s just referring to his “four years of economic growth”), so there’s almost no way for that assertion to be supported. But second, important evidence contradicts him, if the statement is taken over a longer term. A hugely important paper was released just last week finding that social mobility hasn’t changed over the past 50 years of American economic history. A couple authors of it, especially Emmanuel Saez, have seen their work on income inequality frequently cited by the president, his supporters, and his advisers.
President Obama has argued, citing the work of his economic adviser Alan Krueger, that increased economic inequality means less social mobility — this holds true if you compare countries with more and less inequality, but doesn’t appear to have held true as American inequality has increased. This was surprising to many, but wasn’t news to closer observers: Scott Winship, now of the Manhattan Institute, has been pointing out for quite a while that a careful examination of the data shows that social mobility hasn’t decreased in America, even as income inequality has increased.