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The West’s Arrested Social Development

In 1995, the sociologist Ralf Dahrendorf argued that developed countries’ “overriding task” for the subsequent decade was to "square the circle of wealth creation, social cohesion, and political freedom.” More than two decades later, most have not even attempted that feat.

BERLIN – After three decades of worsening economic inequality, advanced-country populations are angry, and they are taking their grievances to the ballot box or the streets. But credibly addressing inequality also demands action regarding a less-discussed facet of this trend: declining intergenerational social mobility.

Nowadays, parents cannot assume that their children will be better off than they are. On the contrary, a 2018 OECD report concluded that in the average developed country, it would take 4-5 generations for children from the bottom earnings decile to reach the mean earnings level. The more unequal the country, the longer upward mobility takes.

Inequality and lack of social mobility are closely linked to geography, with urban areas typically doing much better than rural ones. In the United States, the Brookings Institution reports that cities with more than one million residents have contributed 72% of total employment growth since the 2008 financial crisis, compared to just 6% for cities with populations of 50,000-250,000. Since 1970, wages in the top 2% of US metropolitan areas have risen by nearly 70%, compared to 45% in the rest of the country.

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