For Ed Miliband, Britain’s Labour opposition leader, income inequality is social mobility’s ‘evil twin’. Nick Clegg, leader of the Liberal coalition partner, dismissed the link between mobility and equality as ‘a myth’. Who is right depends on whether you talking about income, or about social class.
Professor Miles Corak has looked at the association between income inequality and income elasticity, which is how much the incomes of sons vary from their fathers. This correlation – which he calls the ‘Great Gatsby Curve’ – is clear.
It’s easy to imagine how income inequality and mobility are related. The bigger the difference in parents’ incomes, the bigger the difference in what they are able to buy for their children. And the wider the range of incomes, the further you have to travel to be socially mobile.
Yet, as Clegg notes when challenged on his comments, the relationship is not that simple. One complication is that changes in class are not the same as changes in income. One-time contender Republican Presidential nominee Santorum actually pointed this distinction out, declaring that while there are ‘middle income people’, America does not have a ‘middle class’.
Santorum thought we shouldn’t talk about class. But if you look at class mobility, changes in occupation rather than income, its correlation with inequality breaks down. Professor Louis Chauvel of Sciences Po and Visiting Professor at Columbia analysed how income inequality relates to changes not in income but in social class. Chauvel’s chart below compares income inequality (here, the ratio of the 90th and 10th decile incomes) with social mobility, measured as the log-odds of sons being in the same occupational class as their fathers.
This simple analysis shows shows that when we look at class mobility and income inequality there are clearer exceptions to the curve. France, for example, has relatively low income inequality but also low social class mobility. On these measures in 2005, Denmark and Finland had similar levels of intergenerational mobility to the UK, but lower income inequality.
Comparative data of this kinds is always limited, but having both measures show that countries do not just differ in terms of how equal and fluid they are. The main ‘currency’ that buys one’s class position varies from country to country too.
In some countries, and the United States is still one, income is strongly correlated with social status, and with education, and so makes sense as a measure of class. In others, including Britain, one’s education and occupation are probably better proxies for class than earnings. This is the land where you could have much higher wages than your parents but still be called a ‘chav’. Indeed, you could be Kate Middleton and suffer ‘commoner’s’ class anxiety. This is why Alan Milburn has been right to focus attention on fair access to the professions. Professional, middle class jobs don’t just (or even) mean higher pay, but they still mean more influence and respect at work and in society.
While the difference between income and class seems technical, it is at the heart of ideas of fairness. People do assess the fairness of their society by their relative wage packets. Income matters, particularly if you don’t have, or haven’t had, much of it. But people’s sense of fairness is about the opportunities that they and their children have for much more, including to go to university, achieve in work, life in a safe neighbourhood, and to own a home.
Fairness is about what you can afford, but also the respect and recognition you are afforded. The politician that gets this won’t settle the academic debate about how to define and measure fairness. They might, however, be better able to promote it.