Is America Truly a Land of Opportunity? 

By Shlomo  Maital   


   Horatio Alger, Jr.  was a  19th-century American author who wrote many juvenile novels about boys who rose from poverty and humble backgrounds to middle-class security and comfort through hard work, determination, courage, and honesty.  He helped create the mythology of America as a land of unlimited rags-to-riches opportunity for everyone – a myth that was once partly true, but no longer is.  Today, Horatio Alger is science fiction. How do I know?

   As witness for the prosecution, I call on President Obama.  He claims he will make upward mobility, and lower inequality, “the defining challenge of our time”, as his main goal for the remainder of his presidency.  Here are some facts he cited, in an important speech:

* An American child born into the lowest 20 per cent income level has less than a 1-in-20 chance of making it to the top – while a child born into the top 20 per cent has a 2-in-3 chance of staying there.  So much for Horatio Alger.

* The top 10 per cent of income earners gets half of all national income, up from only a third in 1979, and matching the inequality in Jamaica and Argentina.

   Obama’s speech even won praise from New York Times columnist Paul Krugman, who loved Obama’s statement that fiscal deficits are a lesser threat compared with a “relentlessly growing deficit of opportunity”. 

    Nice speech, Obama.  But once again, you spin words without deeds. Because you forgot to mention the one thing that could truly revive the middle class – in-sourcing,  bringing home all the well-paying middle-class manufacturing jobs that America blithely sent abroad in outsourcing.   Only 9 per cent of America’s workforce is employed in manufacturing. Less than 12 per cent of GDP originates in manufacturing.  Not that long ago, it was fully 21 per cent (in 1980).   The U.S. share of world manufacturing production has declined from 31 percent in 1980 to 24 percent in 2008. 

    By outsourcing manufacturing jobs, America has given up two pillars of the middle class — $20/hr. wages (more than double what Wal-Mart pays),  and the productivity gains that accompany manufacturing technology, now being reaped mainly by China.  No country can truly prosper unless it makes things. 

    A few key changes in America’s tax laws could be a good start.  But forget that – Republicans will never support anything that damages the privileges of the wealthy.  What is hard to understand is why so many of the lowest 20% of the income distribution vote for them.