On this episode of The Great Antidote podcast with Juliette Sellgren, she is joined by guest Scott Winship. In their discussion, Juliette and Scott discuss the United States “War on Poverty”, the welfare state, and the future of anti-poverty policy.
Scott Winship is a senior fellow and the director of poverty studies at the American Enterprise Institute (AEI), where he researches social mobility and the causes and effects of poverty. He also focuses on economic insecurity and inequality, among other poverty issues.
Before joining AEI, Dr. Winship served as the executive director of the Joint Economic Committee (JEC). During his time at the JEC, under Chairman Mike Lee (R-UT), Dr. Winship created the Social Capital Project, a multiyear research project to investigate the evolving nature of social relationships including families, communities, workplaces, and religious congregations.
Dr. Winship was also a visiting fellow at the Foundation for Research on Equal Opportunity, where he is still an honorary member of the board of advisers; a senior fellow at the Manhattan Institute for Policy Research; a fellow in the economic studies department of the Brookings Institution; and the research manager of the Economic Mobility Project at the Pew Charitable Trusts. Dr. Winship also served as a senior policy adviser at Third Way and the managing editor at The Democratic Strategist.
Dr. Winship has testified before Congress and has been widely published in the popular press, including in National Affairs, National Review, The American Prospect, The New Republic, The New York Times, The Wall Street Journal, and The Washington Post. He contributed an essay on antipoverty policy to “Room to Grow: Conservative Reforms for a Limited Government and a Thriving Middle Class” (YG Network, 2014). His broadcast appearances include National Public Radio, the PBS NewsHour, and CNN’s Fareed Zakaria GPS.
Dr. Winship has a PhD in social policy and a MA in sociology from Harvard University. He holds a BA in sociology and urban studies from Northwestern University.
Juliette Sellgren: Hi, welcome back. Today, I have the pleasure to be interviewing Scott Winship. He’s a resident scholar and the director of Poverty Studies at AEI, where he researches social mobility and the causes and effects of poverty. Previously, he served as the executive director of the Joint Economic Committee, where he spearheaded the Social Capital Project. After watching tons of interviews of Scott and having had the pleasure to chat with Scott one time, it is obvious that he’s a great dude. After reading a ton of his articles in the recent weeks, I know that he is an incredibly clear thinker. Yet, I hope that I’ll never be on the receiving end of one of his famous “correcting the record pieces”, where he dissects all the reasons why what you’ve just written is totally incorrect. Today, we’re going to be talking about his work on poverty and inequality. Welcome, Scott.
Scott Winship: Thank you, Juliette. A pleasure to be here. I think you’re a cool dude as well.
Juliette: So, before we jump in, what is the most important thing that people my age or in my generation should know that we don’t?
Scott: Yeah, it’s a great question. I mean, I guess what I would say is it’s maybe two things that are related to each other. One is that you will change your views over adulthood on any number of things. And so, sometimes I think I see younger people and this would certainly have been true of me as a younger person had Twitter been around. They say things with a ton of confidence as if there’s no possible way that any right-thinking person could disagree with them. And a lot of times, earlier in your career, especially early in adulthood, you just haven’t been around long enough to be familiar with past debates that have happened and sort of to know what people have written before. Or as you get older, you sort of learn how complicated a lot of things are. And so, I would just encourage everybody to the kind of approach things, especially in the public sphere with a fair amount of humility because what you put on Twitter is forever, right? Or what you put on any social media. And man, there are lots of times where I’m just incredibly grateful that Twitter was not around in the 1990s when I was in my 20s and is very opinionated and would have said a lot of things now that people could use against me, that I don’t believe in anymore.
So, I guess that would be my warning to everybody is just keep in mind that the world is complicated. You might find it gets more complicated as you get older. You might find that you feel like you know less than you did when you were in your 20s as you get older rather than more what you did.
Juliette: I have learned to be very cautious of the Internet. It’s great. It’s a gift. It’s also a weapon of like, destruction of your entire reputation. So, very good advice. Thank you.
Scott: Or be a frequent deleter of tweets. That would be the other advice, I guess.
Juliette: Good advice. Let’s start with poverty. I wanted to take kind of a big picture, look at this first. In 2014, you wrote an article in Politico Magazine commemorating the 50th anniversary of the war on poverty called “Actually, We Won The War on Poverty”. Can you tell us about the state of poverty in the United States today and how it compares to the past?
Scott: Sure, absolutely. And I would start off by saying, I don’t think we should ever be satisfied with how much poverty we have as long as there are poor people in the US, we ought to care about them and we ought to care about there being fewer poor people, but I have written quite a bit along the lines of that most people are not aware of just how much progress we have made over time in reducing poverty. And yeah, there are a lot of complicated reasons for that, it ends up a lot of them end up having to do with really nerdy measurement topics. The official poverty rate that the federal government publishes has all sorts of shortcomings, that make it a bad guide to how poverty has changed over time, some of the big things, it doesn’t actually count a lot of our biggest government safety net programs when it considers how much income people have, it doesn’t count things like food stamps or housing assistance or Medicaid and medical assistance when people get refundable tax credits, which is something that’s in the news a lot lately. Those don’t actually get Canada’s income.
So, the best measures that I’ve seen suggest that if you compare say 1962, which was roughly around the time, the war on poverty started a little bit, a couple of years before the war on poverty started by Lyndon Johnson. Something like 20% of the population was poor by a pretty arbitrary definition back then. I mean, any definition of poverty is kind of arbitrary, right? You’re drawing a line and then you’re seeing how many people fall above or below that line and then over time you’re seeing whether that number goes up or down. So, this particular way of drawing a line about 20% of the population was poor in the early 1960s. Fast forward today, and that’s more like under 5% of the population.
Scott: And that has a lot of causes behind it. I think economic growth is certainly a big part of the story. I think the safety net is part of the story as well. We’ve expanded the safety net to take care of a lot of poor persons. That part of the story is kind of complicated though because the safety net also has these weird disincentives that prevent some from working or for marrying or from saving. So, The safety net is a more complicated story, but kind of whatever the factors we’ve just made dramatic progress over time. And I tend to contrast that with the fact that we haven’t made much progress over time in increasing upward mobility if you start out as a poor kid. We really do know better today than we did in the past in terms of being able to get to the middle class if you start out poor. And so, I think we’ve devoted too much energy and too much attention to how much poverty we have versus how little upward mobility we have.
Juliette: You just had a new study at AEI that looks at racial gaps. What did you find in that study?
Scott: Yeah. So, this is another area where lots of times you hear me say that oh, things are not as bad as you think that’s, sort of shtick of mine, I guess. Trying to convince people that they’re worrying too much about certain problems. Like how much money the top 1% has for instance, but inequality between blacks and whites I think is a problem that we don’t pay enough attention to. And it relates to the economic mobility point that I just talked about, and it relates to poverty as well.
So, in this paper that I just published with some friends and colleagues at the Brookings Institution, and my research assistant at the American Enterprise Institute for the first time, we were able to look at people’s grandparents. So, we take a group of people that are in their 30s today, and we’re able to look back at their parents when those thirty-year-olds were living at home growing up. And we’re able to look back even further to their grandparents in the late 1960s. And what we looked at was how common it is to be in the bottom fifth for three generations in a row and whether that differs between blacks and whites. And it turns out it differs a lot.
So, for instance, about 1 in 5 African Americans in their 30s today
is in their third generation of poverty, their third generation of being in the bottom fifth among as 1 in 5. Among whites, it’s 1 in 100. So, these really big disparities. And in some ways, like just as important, if you only look at people who are in the bottom fifth today and you compare blacks and whites and you think, “oh, I’m sort of comparing apples and apples there because I’m looking at African Americans in the bottom fifth and I’m looking at whites in the bottom fifth and so, it’s sort of like the same group in terms of advantage or disadvantage.” Well, it turns out that’s not true at all either. Among blacks who are in the bottom fifth today, half of them also have a parent and a grandparent who are in the bottom fifth. While for whites who are currently in the bottom fifth, that’s true of only about 8% of them.
So, we just find these big, big disparities that no one had quantified before. I think people had a sense that it was probably true, that there’s been more multi-generational poverty for blacks than for whites but we were able to show just how much of a gap there is out there. And we think that’s important because I think my co-authors and I, you know, Brookings and AEI or different think tanks. One is center-left and one is center-right. So, we wouldn’t agree necessarily on the solutions of the problem or even on sort of the most important causes behind the problem necessarily. But we do agree that it’s just an incredibly important problem that conservatives and liberals both should focus more attention on.
Juliette: People tend to like one-factor explanations for why these things occur and I personally would like that. It makes things way easier but I’ve learned especially with the podcast, that is usually never the case. It’s way more complicated. Do we have even the beginning of a grasp on why these racial gaps are so persistent over time?
Scott: I think we have a decent idea. It’s always pretty much impossible to sort of rank order different factors and say, “this one’s definitely the most important, this one is the second most important.” But I think the way to start the story is to look at the grandparents, for instance, in our study. So, when we look at the grandparents, 50% of the black grandparents were in poverty in the bottom fifth, and that compared to only less than 10% for whites. So, at the sort of peak of the Civil Rights movement, we had these big black-white disparities, which were themselves rooted in 400 years of discrimination. There was slavery and then for much of the African American population, they were stuck in the Deep South where there was a whole system of Jim Crow. That was designed to limit their freedoms. In the North, things were better but African Americans were still discriminated against by employers, by unions. They were discriminated against in housing, they were discriminated against by banks, the federal policy discriminated against African-Americans.
So, for centuries, there was just a profoundly uneven playing field and one of the outcomes of that was to concentrate African-Americans who were disproportionately poor in a small number of poor neighborhoods. And once you concentrate poor people together, it’s a machine for preventing upward mobility because it just concentrates all of the problems that go along with poverty, whether that’s family instability, whether that’s poor-performing schools, whether that’s a crime, you name it. If you concentrate on poverty, you concentrate on all of those things.
So, what we find in the paper is even though part of the problem is that there was this big poverty gap among the grandparents, even since then upward mobility has been less among blacks and downward mobility into poverty has been higher among blacks. And that really, I think relates to this history of discrimination that we have. Now, certainly, other people would focus on ongoing discrimination, which I think is also important. I think probably if I had to bet, I would say that the historic discrimination has actually been more important and that if you could snap your fingers and get rid of discrimination tomorrow, you would still have these big gaps because of the structural conditions that we’ve created from past discrimination.
Juliette: In the political piece you wrote, “Much of the data that informs the current discussion about poverty is misleading, which is no help when plotting a path forward that addresses the problems that the poor face.” I’m sure this relates directly to the fact that the way that the government measures poverty doesn’t take into consideration government programs. How else does this problem present itself?
Scott: Yeah, that’s a great question. I think when we start off with poverty numbers that are incorrect and that make it seem like we haven’t made much progress over time. You know that might make you think, “Oh my goodness. It’s time to try something incredibly radical.” Did I just say, oh my goodness, by the way? We’re going to have to edit that out entirely. I sound 70 years old, all of a sudden. But so, you might think, “oh, you know, we’ve got to try something radical because all the things that we’ve tried before haven’t worked.” And it’s funny, there are incentives on both the left and the right to downplay the progress that we’ve made. So, if you’re liberal, you don’t want people to think, realizing that we’ve reduced poverty a whole lot because you worry that that might erode support for more policies to reduce poverty even more, right? You kind of want to overstate the problem and talk as if we have a crisis. You know, where actually we may have a problem that’s fairly manageable or where the solutions that would be appropriate would be smaller than the things that a lot of liberals want to do.
If your conservative, you don’t want people to know that poverty has gone down a lot because it might suggest that all of the policies the government has adopted may have been successful in some ways. And so, lots of times you get both liberals and conservatives who don’t want to admit that poverty has fallen. But I think if we really care about poor people, we have to start with the most accurate facts that we can, which includes how many people are poor today versus in the past, who’s poor versus who’s not poor, and what policies or what factors seem like they’ve been helpful or not very helpful.
Another example, I guess would be debates about inequality, where lots of times people will try to overstate how much inequality has risen over time and they’ll use that to explain why poverty has remained so high. And there you’ve got sort of two big mistakes, people exaggerating how much inequality is increased and people overstating how much poverty we have. And if we can’t sort of have an honest debate using the best facts that are out there then the chances that we’re going to get to really bad policy ideas thrown around, just go up quite a bit.
Juliette: You keep saying accurate facts, best facts. But it seems though there’s also a serious difficulty in measuring wealth and having facts that can be accurate because the estimates were usually not close. Or if they are, they’re not perfect and then that leads to wrong conclusions. How does that lead into problems? How do we measure wealth and how can we make it better? I guess.
Scott: Yeah, so, these debates often end up being really heated. There’s a big ongoing debate about poverty measurement and nobody is talking about changing the official poverty measure really, but there is a lot of discussion about how to have better poverty measures for research purposes and people really disagree strongly about different decisions more so than I think they should. I think, unfortunately, lots of times people aren’t able to kind of set aside their politics or to set aside the implications of measuring things in a way that pretty much everybody could agree would be the best way to capture something.
Health insurance, I guess, to be an example, when you’re measuring poverty should you count the health benefits that people get either from their employer or from the federal government as income? Almost, certainly, you should count it as something, right? If it wasn’t worth anything to people then we should just eliminate all of the federal health care programs that we have and employers should stop giving health insurance to their workers and just give them cash instead. But nobody actually believes it’s worth nothing.
And so, that’s a place where everyone should agree. All right, we should evaluate something, we can disagree about how to do that, but it shouldn’t be nothing. On wealth, you know, wealth is even more complicated than some of these other things that we’ve been talking about, because your first and foremost, I think some people will want to save their income when they get it and some people will want to spend it. And so, if you just look at inequality and wealth, offhand, you don’t really have a sense of whether any inequality is due to differences in whether people want to save their money or spend their money, which is just a choice that is none of our business really, or whether it’s because of the people receive different amounts of income because some people aren’t as able to save as others, which is really what we care about.
And then beyond that, there are all these other tricky things. You know, we count student loans, the student loans that people take out for college or graduate school, we count that as debt. You know, it’s negative wealth, but the reason that people take out those loans is because it’s worth it to them, because they’re getting something from college or from graduate school that they expect will be worth the trade-off. And what that is, is you can think of it either as being just a college diploma or you can think of it as being like real skills that people learn in college, but whatever it is, it’s going to hopefully pay off down the road in higher earnings and better career opportunities. But we don’t count that asset. If you think of human capital as being an asset, the skills that you have. We don’t count that in wealth, even though we count the student loans as negative wealth. And so, that has this weird consequence that as more people get college degrees if that in part is because more people are able to take out college loans, people look less wealthy over time even though it may reflect that people are better off over time. It’s just we don’t see the human capital in the wealth measure.
Another example is retirement wealth. You know, if you save privately for retirement that gets counted as wealth. But of course, we have a big social security system, which is government benefits once you retire. And if we didn’t have that at all, then a lot more people would save for retirement themselves and that would show up as wealth but we don’t count the Social Security benefits as wealth. So, it ends up just being really difficult to get a handle on. Which is why I tend to try to focus more on income and on poverty and on earnings, instead of on wealth.
Juliette: So, then is wealth in measurement that we should discard, or is it still valuable? How is it valuable? And also how do we measure the ability that someone has to save?
Scott: Yeah, those are great questions. So, I do think it’s still important to try to measure wealth well. Especially, if you’re sort of focused on the advantages of growing up at the very, very top, right? There’s not a lot of wealth transfers other than kind of towards the high end of the income scale or the wealth scale because wealth is really unequally concentrated in the United States and in most countries actually. So, it’s worth knowing something about that. You know, again with black-white inequality, there’s a vast gap in wealth between blacks and whites too and that’s really important as well. So, I wouldn’t say that we should just ignore it, but it’s tricky enough to think about and to measure. And most people do such a poor job at it, honestly. You just have to really read research on wealth with kind of a skeptical eye.
And it’s sort of the best we can do given that it’s a tough concept to understand. I forget your second question because I rambled an answer to the first one.
Juliette: How do we measure someone’s ability to save?
Scott: Yes, right. Yeah, that’s a great question. You know, there are some very technical-economic studies that try to look at propensity to save and so if you can find some kind of interesting experiment or policy experiment that people can’t anticipate. So, suddenly people end up with more money, more income than they thought they were going to get. And then you look at the extent to which people save it or don’t save it. That’s one way to go about it and we kind of did have some interesting experiments last year with all of the stimulus and the COVID relief. Because so many households got these checks for $500, for $1,400 and a lot of households didn’t really need them, especially, because spending was going down anyway because so much of the economy was closed and people are staying at home. So, they weren’t using as much gas and they weren’t eating out as much. So, they’re saving money that way. They weren’t going to restaurants and movies and concerts and things like that.
So, a lot of people got these checks last year from the federal government and didn’t really need them and so they save them. And so, that’s like an example where you have what was almost a completely unanticipated increase in income and then you can look and see how many people save, otherwise, if you don’t have that aspect of it, that’s unanticipated. Then it’s really hard to disentangle the ability to save from just your preferences for saving versus spending money. But like a lot of questions in social science, it is really hard to get at propensity to save just because there are so many confounding factors that if you don’t have some unanticipated increase in income or in wealth, it’s just really hard to do convincingly.
Juliette: I see the second part of the Politico Magazine article that you wrote, you note that a lot of the decline in poverty happened in the 1990s and that they were mostly the product of welfare reforms while the more great society and liberal ideas of the 1960s can’t really take credit for that decline. I’ve read some incredible numbers on that front about how people were living. I mean, before the welfare reforms nearly 9 in 10 families on welfare were workless and most of them were stuck in long-term poverty and unwed births rose, which created a trend in Intergenerational Child Poverty. Can you talk about those trends and what the welfare reformed were and how they changed living conditions?
Scott: Yeah. Well, so, that’s interesting. You’re looking at a 2014 peace of mind, because that’s actually an instance, where I think I wrote a few things back then, based on what the best numbers that I had at the time, but that subsequently I kind of came up with my own poverty estimates. This is a good example of where you hopefully can improve these measures over time and that that actually can change your conclusions. So, the one thing that I would change if I were writing that today is child poverty. When you use a better measure, it looks like it’s been declining since the early 1980s. So, I think, in that piece I said it didn’t really start until the early 1990s. And now, I would push that back by about a decade. Now, I still would stand by the point that the main credit for that, I don’t think is because of the expanded safety net from the Great Society that Lyndon Johnson that was sort of the name of his policy agenda, it expanded all these safety net programs. And I do think welfare reform gets a lot of the credit during the 1990s when the drop in poverty was very steep.
So, yeah, going back to say the early 1990s before welfare reform. A lot of families who are the lowest income families were receiving benefits from the main program. I mean, the safety net program we had at the time called Aid to Families with Dependent Children, AFDC, which originally, way back in the 1930s was designed mostly to help widows raise their kids. So, mostly women whose husbands had died. And at the time, not many women worked and people didn’t want women to work. And so, they created this program for widows over time as our healthcare got better and people became healthier, workplaces became less dangerous. And as more and more women worked the group of single parents was much less people who had lost their partner because of death, and it was much more people who were single, either because they’ve gotten divorced or because they had had a child before getting married. And so, the program became something very different.
And over time single parenthood increased a lot. You know, I’m not on here to denigrate single parents, I’ve been one myself for sure. But it does create more challenges in terms of escaping poverty for a lot of families. So, by the time of the 1990s, we had a lot of kids who were stuck in very poor families, growing up without both their parents. And there were these disincentives for their parents to work, to get married, to save. So, it was really a terrible system because it didn’t leave people very well off, but it also gave them incentives to not better themselves as well. So, in the mid-1990s and this was bipartisan at the time. Bill Clinton, who had become president in 1992, had run for president, saying that he was going to reform the welfare program. He and other modern Democrats ended up joining with Republicans to reform the system that we had and to require work of most families that were receiving welfare benefits. It put time limits on how long people could receive benefits. Both for a given spell but also over the course of their lifetimes. So, it made it harder to continue receiving cash benefits without working.
And the other thing that we did is we passed a number of policies that provided more money to people who worked if they were low income. So, we expanded tax credits that went to low-income working families. We provided a lot more in terms of childcare benefits, healthcare benefits. The minimum wage went up. So, it was this combination of making it harder not to work if you’re poor but also making it easier if you did work. And that seems to be the right combination in my view. It ended up that the number of single parents who are working increased quite a bit. The number that we’re getting welfare benefits fell by a lot and neither of those would necessarily be positive except that poverty also fell, which is really the key consideration there. It was a way to encourage people to be more independent, which also improved their material well-being.
So, I’ve argued in the past that we ought to continue to pursue policies like that that encourage work, help low-income workers, and also shelter, you know, there are some people who just have profound personal challenges or who have extremely young kids. We don’t want to send mothers with three-month-old babies, necessarily force them to go into the workforce. So, shelter enough people but generally expect that people will take steps to become self-sufficient, independent.
Juliette: What do you say to people who say that the problem with poverty is that we aren’t spending enough money to help people?
Scott: Yeah. That’s a common belief, I think. So, there, I think, for starters, people don’t understand how much money we actually do spend on low-income Americans. And it’s over a trillion dollars a year at the federal level. And when you throw in state spending and a small amount of local spending, it’s over 1.2 trillion dollars, I think, every year that we spend on low-income populations. So, we’re spending quite a bit, to begin with. The second thing that I would say is using how much we spend as the metric for how much we’re prioritizing poverty reduction is just a mistaken way to go about things. You know, I go back to these different trends. So, we’ve managed to reduce the poverty rate a lot over time in part because we do spend more today than in the past on anti-poverty policy. But if spending more money and giving more cash to people were what was also important for expanding opportunity, we would have seen upward mobility for kids who start out in the bottom, going up over time and we don’t see that at all. Researchers are pretty much unanimous on that. If anything, we do a little bit worse than we did in the past, in terms of poor kids being able to make it out of poverty as adults.
So, that says to me, that what’s important isn’t so much how much we’re spending, how much cash that we’re getting into the hands of people at the bottom but it’s spending money effectively when we do spend it. And that’s an instance, where I think welfare reform, which actually involved cuts to certain programs, like, we spent less on cash assistance to non-working families after welfare reform than we did before. But even so, it ended up benefiting those families because it encourages them to take control of their own lives. So, it’s just a mistake to sort of say, like, “well, we should measure how we care about poverty and how much we’re doing to reduce poverty by how much the federal government is spending.”
Juliette: And what do you say to people who argue that the solution is a universal-type program like a child allowance?
Scott: Right. So, that’s a policy proposal that really does presuppose that the way that you reduce poverty is to give people more money. You actually hear people say this all the time like, “Just give people money.” And in the short term, it’s absolutely true. Like, if you want to reduce poverty, if you want to increase people’s incomes, giving people money by definition increases their income. That’s going to reduce poverty, but that’s in the short term and it’s only using a very narrow definition of poverty, right? If by giving people more money without any requirements attached to it. For instance, giving them more money whether they work or not, giving them more money regardless of whether it increases the number of kids who are growing up without both of their parents. You can make them less poor but their ultimate outcomes might end up worse off. Either because they weren’t exposed to a working adult when they were kids or because they missed out on all the benefits of having relationships with both of their parents. You know, you can imagine that that might keep people stuck over multiple generations in neighborhoods that were bad for their own outcomes and for their kids’ outcomes.
So, it’s a solution that really believes that kind of the best thing you can do for folks is just give them more money and I just think that’s wrong. So, instead, I would provide more generous benefits to low-income workers because that helps them. And it also encourages more people to work. And I would sort of provide benefits that have built-in incentives to help parents and their kids make decisions that will promote their upward mobility. So, if you think of something like, there’s a policy called Baby bonds, for instance, which is these days, more associated with Democrats and with Republicans. But the idea is that you give kids a certain amount of money when they’re born in a savings account, and that accumulates over time, the federal government provides more generous contributions for lower-income kids. And then, when they become adults they can spend it on a limited number of things. For higher Ed, buying a home, investing in a small business.
So, that’s a way that isn’t giving. It’s a policy approach that isn’t just giving money to their parents. It’s sort of giving wealth to the children that they can then use for a limited number of purposes, that will also increase their opportunities. I think that’s a better way to go about things. And then the other dimension, that that’s really important to think about is that the more government spending that we have especially when it creates more government debt, that ends up being a drag on economic growth. And really, in the long run, the best way to reduce poverty is to increase economic growth over time. And so, we really need to be careful that our government policies are not reducing economic growth because if they are, then you’re sort of ruining the best chance, in some ways, to make everybody better off over time.
Juliette: I think definitely having a type of program where you have a restricted number of things like the whole baby bonds idea, where you have a restricted number of things you can spend this money on, is better than just giving people cash. Because I don’t know, it depends, I don’t know, Okay. Okay, I haven’t thought this through enough.
Scott: Very complicated questions but yeah, I mean, I think a lot of, there even conservatives who really like the expanded child tax credit and the child allowance is because they sort of imagining, oh, a lot of families are going to use it to then go to Catholic school for instance. And my response to them is maybe, maybe they will. But their parents may spend it in ways that aren’t so helpful to them. And that’s just something I think that we need to think very hard about and not be naive and think that everybody is always kind of, that they even know how to do what’s best for their kids, let alone that they are going to do what’s best for their kids. A lot of families just don’t know what’s best for their kids.
Juliette: I think, okay, revised a little bit on my part, giving the children the opportunity to later be more in control of how it helps them, instead of just being like, “here, parents, spend it on your children.” Probably also more helpful. Okay, I have a million questions for you about inequality and we’ve touched on it a bit, but we don’t really have time to get into it. And so, I’m hoping that in the future, we can do another episode on inequality specifically, but before we conclude, I want to ask you about income mobility which we’ve touched on.
In an AEI study that I mentioned earlier about obvious highlights in these issues for black Americans, but how the issue is broader. I know you’ve said that we have a mobility problem in the country, but can you explain what you mean by that? And how it’s developed over time?
Scott: Yeah. So, I think, I guess I would say we have maybe three mobility problems, is the way I would put it. I think one is just a mobility problem that every country ought to think that it has, which was just that we could do better. So, currently, if you start in the bottom fifth today, roughly 40% to 45% who start in the bottom fifth end up also there as adults. So, a lot of people make it out but they don’t make it that far. A lot of people kind of make it into the next fifth of income which is still below the middle of the income distribution. So, I think we should be striving to have more income mobility. The second problem I think, is that we’re not doing better over time. As I said, in increasing mobility. In fact, we may be doing worse over time. And then the third problem is this big disparity between the upward mobility rates of whites and of African-Americans.
So, for instance, I did a study a few years ago where we found that if you were a white man or a white woman who started in the bottom, you have roughly a 25% to 30% chance of being at the bottom yourself as an adult, but for black men and women, it’s more like 50% to 55%. So, that’s a big disparity, all people who started in the bottom fifth. But there’s this racial gap in being able to escape the bottom fifth. So, I think those are the three problems that I’d highlight.
Some people would also say that we need to have a lot more mobility than other countries and there, I think the facts are a little bit more complicated than that. But it is true that if you’re talking about family income, it does look like we have less economic mobility than other countries and that’s a problem too.
Juliette: Thank you so much for all of this. Okay, to wrap up, what is one thing you believed at one time in your life that you later changed your position on and why?
Scott: Great question. I feel like I’ve changed a ton since I was younger and I guess the way that I would put it is that I have left things that I’ve joined. So, I once was a Catholic, I’m not anymore. I’m not especially a religious person these days. I once was a Democrat and then briefly, after that, I was a Republican. Now, I’m an Independent. So, that’s something that I’ve changed. You know, in terms of policy, as much as I’ve talked about welfare reform, being a success story at the time, when I was in my 20s, this goes back to my original answer to you, when I was in my 20s, I was convinced that welfare reform was going to be a disaster. And I just was persuaded by the facts over time that I was wrong.
So, I think it goes back to sort of advice to give younger people, I would say. You know, it’s nice to have identities that you’re attached to. You know, it’s what makes us interesting in some ways and it’s what gives our lives meaning in some ways. But I think it’s also you can become too attached to your identities as well. And there’s something to be said for sort of not being so strongly attached to them that you can’t sort of take a new perspective on something and sort of leave an old tribe behind if your views have become more complicated, I guess. Kind of a long-winded answer.
Juliette: No, it makes perfect sense. Thank you so much. And everyone, read one of Scott’s articles published at the dispatch called, “What A New Report Gets Wrong About Inequality”. It’s great and can inform you for whenever we talk about inequality next time. Thank you so much Scott for being on the podcast. I had a great time and I learned so much.
Scott: I had a great time too. Thanks for having me, Juliette.
Juliette: Well, that’s all we have time for today. I’d like to thank my guest once again for their time and insight. I would also like to thank everyone who listens, subscribes, and shares The Great Antidote podcast. If you would like to be on the podcast or if you have a guest in mind, please feel free to reach out to me at [email protected] Bye.