It is not inequality, it is social mobility

Photo Ivan Cachanosky
Ivan Cachanosky

Lic. in Business Administration. Master in Applied Economics of the UCA. PhD in Economics from the UCA.

La Nación – Poverty, inequality and social mobility are concepts that are often mixed, generating confusion that can lead to wrong conclusions. It is important to understand that although they are concepts that may have links, there are substantial differences. Today’s debate is mainly characterized by poverty and inequality, while social mobility remains in the background. However, it is a key point to analyze to see if people can progress. A situation of inequality, where social mobility is possible, is not the same as a situation where it is not. In the first case, people are not usually too concerned about inequality because they see on their horizon that they can progress. On the other hand, if social mobility is low, inequality can bring high social costs.

Bearing this in mind, the role of social mobility is key to offering progress and providing hope. The studies that focus on social mobility are fewer, since they are more difficult to measure. However, it is a key variable of progress. Insisting on fighting inequality implies not understanding the root of the problem. Inequality will always exist, pursuing equality is pure utopia. Equal opportunity is a noble but fanciful intention. The big difference is if the people who are in a situation of vulnerability are in a suitable environment (institutional and economic) to be able to progress and get out of poverty; that is, to achieve upward social mobility. Furthermore, an equal opportunity does not guarantee that it will materialize in a result of upward social mobility. In this framework, what the market can offer with a much more realistic approach is a number of opportunities. In other words, multiplying the alternatives giving people more options so that they can progress.

This point is key because, as opportunities multiply, the greater the probability of upward social mobility. If this occurs, an impact would be achieved in reducing poverty. Here education is a key tool since it is responsible for multiplying the number of opportunities developing the different skills of the students.

We must remember that the main point is the reduction of poverty and that this is achieved thanks to upward social mobility as a result of the various opportunities offered by the market. This upward mobility has nothing to do with inequality. And this point is not just theoretical. There are surveys that have managed to show it. For example, the Archbridge Insitute took the trouble to conduct a survey of 60 countries asking the following question: What is more important, reduce income inequality or have a fair chance to improve economic position? 63% of respondents (approximately 85,000 people) answered that it is more important to have an opportunity to improve one’s financial position.

The results of this survey are interesting, because it is beginning to show that it is actually unfair inequality rather than economic inequality that can bother people. Furthermore, income inequality is probably not a concern as long as there is a possibility of improving one’s economic position; that is, that upward social mobility can be achieved. Two countries that have similar wealth distribution but that have different opportunities are not two equal countries. So the challenge is to create the conditions to facilitate upward social mobility.

In conclusion, the true answer to progress does not lie in reducing inequality, a utopian objective, but in creating the conditions so that upward social mobility is the easiest to achieve. How to make the number of opportunities grow? To achieve this, there must be as few barriers as possible, so that the people who undertake have the power to generate their own businesses and that they themselves are the key to get out of a situation of vulnerability and thus be able to escape poverty.

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