Progress still happens, but there is less of it. Two-thirds of American families — including four of five in the poorest fifth of the population — earn more than their parents did 30 years earlier. But they don’t advance much. Four out of 10 children whose family is in the bottom fifth will end up there as adults. Only 6 percent of them will rise to the top fifth.
It is difficult to measure changes in income mobility over time. But some studies suggest it is declining: the share of families that manage to rise out of the bottom fifth of earnings has fallen since the early 1980s. So has the share of people that fall from the top.
And on this count too, the United States seems to be trailing other developed nations. Comparisons across countries suggest a fairly strong, negative link between the level of inequality and the odds of advancement across the generations. And the United States appears at extreme ends along both of these dimensions — with some of the highest inequality and lowest mobility in the industrial world.
The link makes sense: a big income gap is likely to open up other social breaches that make it tougher for those lower down the rungs to get ahead. And that is exactly what appears to be happening in the United States, where a narrow elite is peeling off from the rest of society by a chasm of wealth, power and experience.
The sharp rise in the cost of college is making it harder for lower-income and middle-class families to progress, feeding education inequality.
Inequality is also fueling geographical segregation — pushing the homes of the rich and poor further apart. Brides and grooms increasingly seek out mates with similar levels of income and education. Marriages among less-educated people have become much more likely to fail.
And a growing income gap has bred a gap in political clout that could entrench inequality for a very long time. One study found that public spending on education was lower in countries like Britain and the United States where the rich participate more in the political process than the poor, and higher in countries like Sweden and Denmark, where levels of political participation are approximately similar across the income scale. If the very rich can use the political system to slow or stop the ascent of the rest, the United States could become a hereditary plutocracy under the trappings of liberal democracy.
One doesn’t have to believe in equality to be concerned about these trends. Once inequality becomes very acute, it breeds resentment and political instability, eroding the legitimacy of democratic institutions. It can produce political polarization and gridlock, splitting the political system between haves and have-nots, making it more difficult for governments to address imbalances and respond to brewing crises. That too can undermine economic growth, let alone democracy.