By Sondre Jahr Nygaard
Wealth tends to accumulate. Growing inequality of income is threatening the order of society and is one of the biggest failures of our time. The mechanisms that are contributing to this increasing inequality can be seen on all levels: from inequality between countries to the same disparity between neighbourhoods in a city. The idea of the American Dream is that every person has the potential to realize his or her aspirations through hard work. The American Dream is not limited to the United States. It has become a widespread mode of thought in Western European countries as well. Despite the fact that these values are widely embraced, the map is very different from the terrain.
Some years ago, the book “Capital in the 21st century” by French economist Thomas Piketty created a big stir among policymakers and researchers alike. Piketty showed that the income gap between the rich and the poor is ever widening. The richest 1% are accumulating much more wealth than the rest can make through labour efforts alone. This results in a cycle where those who are very rich have the means to accumulate even more wealth at the expense of others.
An important aspect of the American Dream is upward social mobility, making a better life for yourself and your family. Using statistical analysis, the economist Raj Chetty claims that mobility between classes is not just a matter of personal skills, but also a matter of geography. Chetty says that the chances of moving between social classes are highly dependent on which neighbourhood you are living in. He explains it as the importance of the environment around you. Neighbourhoods in different social strata vary in the quality of their schools, education levels of residents and quality of life in general. Can one therefore say that people from lower and higher class backgrounds are equal and have the same opportunities to succeed? Higher education is a good indicator of upward social mobility. With higher education, you have access to a wider range of jobs with better pay and increased cultural capital. Research shows that the more you are exposed to books from an early age, the more likely you are to undertake higher education. University entry, though, is dependent in part on results from earlier education. Higher education can also be expensive, such as in the UK or the US, which may create barriers for potential students coming from low-income families. Evidence in Norway however suggests that parent income is not as important for choice of education, where the government provides free education.
While Chetty’s studies are based in the US, similar trends can be seen by looking at cases in Norway. If you were born and raised in Finnmark, for example, the likelihood that you will undertake higher education and move to a social class higher than your parents is much lower than for someone born and raised in Oslo. The proportion of people having more than four years of higher education in Oslo is about 19.3 percent, the highest in the country. In Finnmark, this amount is 5,9 percent. Combine this with the ﬂow of people moving from Finnmark into urban areas further south, and the future of Finnmark might look grim – as is the case for any other sparsely populated place in Norway.
But what if we break these numbers down on a local level? Are you destined to a have a future in society’s elite if you are born and raised in Oslo? Well, that depends largely on which part of the city you are born and raised. Though the data are a bit rough, the trend is still clear: education levels vary considerably among neighbourhoods in the city. In Stovner, the least educated part of the city, the population with higher education is approximately 23 percent. At the opposite end of the scale, St.Hanshaugen´s higher educated population is almost three times greater, with over 60 percent of residents having higher education.
Ever-increasing inequality in our society is not just a problem in and of itself, but it also leads to more distrust between people, and between people and the government. Distrust may lead to people abstaining from paying taxes, such as we have seen in Southern European countries, or civil unrest and subsequent police brutality, like we have seen lead to the black lives matter campaign in the US. Trust is among the critical pillars for a democracy to function well. Norway enjoys a high degree of trust, but this trust does not come from nowhere. It comes in part from giving people chances and opportunities to make use of their skills and potential.
To solve the problem of inequality, we cannot sit back idly and hope for a resolution to come. We need to enact policy which can work to minimize extreme income inequality. The mechanisms which strengthen this inequality exist on global, national and local levels, which calls for a holistic perspective on the problem. Achieving the American Dream may prove extremely hard, if not impossible, if you aren’t born in the right place at the right time.