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The birth lottery

by Taha Meli Arvas

If you are reading this sentence right now, you’ve already won the lottery. You are among a very elite few. You have been educated in the language closest to what can be considered the universal language, English. You have the technology necessary to read this article online, and you have enough free time to do so. This already puts you in the top quartile of all human beings that have ever existed in the history of mankind. That’s pretty impressive. How did you achieve this great feat? Were you born into abject poverty and worked your fingers to the bone to get to where you are financially in life? The odds are – you were born with it.

Economic mobility, sometimes referred to as social, income, or class mobility, is far less possible than the average person believes it to be. A Pew study finds that about half of all Americans born into the bottom fifth or top fifth of the income distribution stay there throughout their lifetimes. The lack of social mobility is far worse in other countries. While the American dream is largely just a dream, the Portuguese dream or the British dream is nearly nonexistent. Approximately 20 percent of all government ministers in the U.K. in the last century all graduated from the same high school, Eton, for example. Over 50 percent of current government ministers attended private schools, compared to only 7 percent of the general population.

Class mobility does exist in some countries, such as Denmark and Sweden; however, the barriers to moving among classes are still very difficult, and mobility is limited. Intragenerational mobility or mobility during your lifetime is very, very difficult. I’ve written in the past about the today’s major tech companies, Amazon, Facebook, and Tesla, etc. all being founded by the children of multi-millionaires. Unfortunately, this lack of mobility, the birth lottery, extends to every percentile of the socioeconomic ladder.

According to a study conducted by the Equality of Opportunity Project, a 26-year-old born in the bottom quintile of the income ladder has less than a 10 percent chance of being in the top quintile. This number increases to over 35 percent for those already born in that quintile. The quintiles in between are evenly spread out, meaning the higher your parents income, the higher your income.

Therefore, if you were born rich, you have already hit the birth lottery. You have a very high likelihood of continuing to be wealthy. As one of the greatest assets of a family is the land and property they possess and as property values generally increase, those with a relative head start financially will pass on a greater head start to their children as these properties are inherited through the ages. Those that start with nothing or are stripped of all of their assets, such as the ancestors of African-American, slaves, had nothing to pass on. While the top 1 percent of U.S. households control about 33 percent of all the wealth in the country, for example, the bottom 10 percent control -0.2 percent of the wealth, meaning they have net negative assets. Successive generations passed on with no net assets.

Nowhere did I notice this income inequality gap to be greater than in India. Even China was relatively better than India in that a middle class was beginning to form. In India, the mega-rich lived side-by-side with the very poor in stark contrast. Children born to the mega-rich will continue to enjoy the advantages of having won the birth lottery and children of poverty will face near insurmountable obstacles to put food on their tables.

In this sense, we are all factors of our parents’ wealth. Had I been born an indentured servant in India or a child laborer in some other country, the odds are very good I would have no way to escape financial destitution. So, for those who are the exceptions, those who make it despite being born into poverty – good for you and congratulations. But for the vast majority of us, who were not born into poverty, we got lucky, plain and simple. We won the birth lottery. We should be thankful for this fact and do whatever we can to level the playing field so that the next generation of children has equal opportunities for a prosperous life.

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Note: The opinions expressed in this blog are personal and do not necessarily reflect the institutional viewpoint.

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