What Ever Happened To Upward Mobility?

Why the U.S. has become the land of less opportunity--and what we can do to revive the American Dream

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Joakim Eskildsen for TIME

Lesley Perez, 24, is a New York City kindergarten teacher and earns just $23,000 a year. To save money, she lives with her parents. She is $35,000 in debt from college loans.

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Of course, the debt crisis in Europe and the protests over austerity cuts in places like Athens and London make it clear that the traditional European welfare systems are undergoing very profound changes that may reduce mobility throughout the continent. But there is still opportunity in efficiency. Germans, for example, made a command decision after the financial downturn in 2008 not to let unemployment rise because it would ultimately be more expensive to put people back to work than to pay to keep them in their jobs. The government subsidized companies to keep workers (as many as 1.4 million in 2009) on the payroll, even part time. Once the economy began to pick up, companies were ready to capitalize on it quickly. Unemployment is now 6%--lower than before the recession--and growth has stayed relatively high.

The Nordic nations, too, have figured out clever ways to combine strong economic growth with a decent amount of security. As in Germany, labor and corporate relations are collaborative rather than contentious. Union reps often sit on company boards, which makes it easier to curb excessive executive pay and negotiate compromises over working hours. Worker retraining is a high priority. Danish adults spend a lot of time in on-the-job training. That's one reason they also enjoy high real wages and relatively low unemployment.

The final lesson that might be learned is in tax policy. The more-mobile European nations have fewer corporate loopholes, more redistribution to the poor and middle class via consumption taxes and far less complication. France's tax code, for example, is 12% as long as the U.S.'s. Tax levels are also higher, something that the enlightened rich in the U.S. are very publicly advocating.

No wonder. A large body of academic research shows that inequality and lack of social mobility hurt not just those at the bottom; they hurt everyone. Unequal societies have lower levels of trust, higher levels of anxiety and more illness. They have arguably less stable economies: International Monetary Fund research shows that countries like the U.S. and the U.K. are more prone to boom-and-bust cycles. And they are ultimately at risk for social instability.

That's the inflection point that we are at right now. The mythology of the American Dream has made it difficult to start a serious conversation about how to create more opportunity in our society, since many of us still believe that our mobility is the result of our elbow grease and nothing more. But there is a growing truth, seen in the numbers and in the protests that are spreading across our nation, that this isn't so. We can no longer blame the individual. We have to acknowledge that climbing the ladder often means getting some support and a boost.

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