A new report says that if you come from the United States, wealthy parents have a lot to do with your chances of success.
Individuals who come from poorer families are more likely than born in the USA to own a home, to have a good education and to live a better life than their parents if they are born in Canada. That is, Canadians have a better shot than Americans at the American Dream.
According to the Global Social Mobility Index for the World Economic Forum, 82 countries can achieve their potential, regardless of socio-economic background. This applies to their citizens.
This report coincided with the launch of the World Economic Forum in Davos, Switzerland on Monday, with the ongoing theme of global income inequalities.
In the US, the median income of a family with low incomes usually takes up to five generations, but that can change. This figure is better than it is in France and Germany, but worse than the best overall social mobility score in Canada, Australia, and Denmark.
In Denmark, the report states that a child born into poverty has the same chance that a high adult income would be earned when it was born into a wealthy family. The combination of broad access to high-quality education, good working opportunities and conditions, and a strong social security network is the key to this.
Germany and France rank much better on social security than the United States and have a fairer salary, which lifts the social mobility ranking of these countries as a whole.
A rich family also has other advantages. The report notes that Americans living in households with high incomes are three times more likely to report strong social and professional networks than those who grew up in households with low incomes using data collected by IPSOS on behalf of LinkedIn.
According to the report, governments should implement policies aimed at addressing wealth concentration, such as graduating taxation of personal incomes and rebalancing the tax source.
According to Klaus Schwab, founder and executive chairman of the World Economic Forum, inequality weakens a country’s social fabric and erodes trust in institutions.