Monthly Archives: May 2015

Mobility in Moving

When starting a family, one of the first questions asked is “Where will we live?” Ultimately, whether out of choice or necessity, families must choose between staying in the area they’ve been living in, or to move elsewhere. Instinct often nudges some to stick to their roots, to not venture out into unknown territory, even if it were to be to a better neighborhood; there are those who feel a type of sentimental pride in their neighborhoods.LuMaxArt Golden Guys APR Home Moving Concept

But is this really the right way to go – especially when it comes to your children’s success? Research that has been conducted over the past few years showed evidence that moving to a better neighborhood is beneficial not only for the children in the household, but for other members as well. According to Raj Chetty and Nathaniel Hendren’s study, there are a few necessary key components that can help determine if a neighborhood will lead to higher success for a family.

“Within a given commuting zone, we find that counties that have higher rates of upward mobility tend to have five characteristics: they have less segregation by income and race, lower levels of income inequality, better schools, lower rates of violent crime, and a larger share of two-parent households.”

Equality of opportunity- Raj Chetty and Nathaniel Hendren

The benefits of moving include a higher college attendance rate and a relative decrease in the poverty rate. However, the benefits are dependent on time and age, according to the New York Times. In the article, the study said, “In the mid-to-late 1990s, 4,600 families living in public housing entered a lottery in which the winners were offered a voucher that enabled them to move to better neighborhoods.” There were those who were given the opportunity to move, but were still unable to reap the benefits of moving to a better neighborhood. This seemed to be the case when children were above a certain age during the move, making mobility less plausible to a parent.

 Moving sucks

That being said, what’s to stop anyone from any neighborhood from achieving the “American Dream”? And what of those who cannot achieve their dreams due to their economic situation or any other hindrance that life is known to give? It seems that whether given the opportunity or not, there’s always the option for “failure” in the sense that a person/student fails to increase their current amount of wealth and/or succumbs to financial instability. It does not, however, account for the general happiness of the person, who may be earning less money doing something they truly love.

“Given how American society has evolved, the idea is… to achieve a balancing act which rewards merit and hard work and provides  a floor or safety net for low-performing, slow running and weaker individuals. But despite this ideal standard for society, we are confronted with the harsh truth that this nation remains much more stratified than what its principles suggest… We would like to believe that through merit and hard work anyone can achieve the American dream”

Allan Ornstein, Wealth vs. Work: How 1% Victimize 99%

But it seems that simply ‘going to school and graduating college’ does not always make the cut for immediate success. There are those who grow up considered ‘doomed to fail’ due to their neighborhood or finances. Shouldn’t they still be provided with an opportunity to live a comfortable life? There is so much talk of how much education or a good neighborhood will lead to success – that having a passion for your job and financial stability will naturally go hand-in-hand if you do things the good ol’ fashioned “American” way.

But what do you do when neither of those options are viable or plausible?

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Money Over Matter

The college admissions process can seem confusing, but many of the hoops to jump through are there to make sure candidates meet the standards set at a (usually) high bar. A certain SAT grade, along with a particular GPA correlated with it, are often the only two things keeping students out of college.

Most less-selective colleges have hard admission cutoffs for prospective. For example, the minimum combined reading and math SAT score could be an 830, as long as the student maintained at least a C average GPA. Students can fall to either side of this line, according to the New York Times, and students who did not pass that set bar were rejected from college a majority of the time. To be exact, roughly half of the students who cleared this standard graduated with a bachelor’s degree, as compared to only 17 percent of those who did not meet this standard–regardless of how marginal the difference was.

There have been a few studies of the students that fall to either side of this line over the years. One such study found that young adults who fell above the line and went to college made an average of 22 percent more in their late 20s than those who fell just below the cutoff. This is a statistic that contests ardently to the notion of “go to college to live a successful life.” However, there seems to be an unexplored caveat of this dictum. How many of those students making 22 percent more than those who did not go to college were already wealthy?

According to the Wall Street Journal, “Students from the wealthiest families outscored those from the poorest by just shy of 400 points,” which is just another example of “economic inequality result[ing] in much more than just disparate incomes”

BN-EX013_SAT100_G_20141007150853In my book Wealth vs. Work, I discuss both equality and inequality financially. There are many wealthy students who are given the opportunity to go to college, but either wish to pursue a different career path or are otherwise disinclined towards college.

“When we talk about equal opportunity, eventually the question arises as to whether everyone should have the right to go to college. If everyone has the right to go to a high school education, why not college? …[T]here are many children whose academic limitations cannot be traced to poverty or deprivation. Children who come from upper-class homes have the advantage of social capital, and have parents who can hire private tutors, if necessary. They also have the ability to move to a successful school district- where… the school climate is more conducive to learning.

Others who are less fortunate start out on a less than equal footing and continue to experience family, school, peer group, and community handicaps that only increase their disadvantages- and thus are often doomed to disappointment.”

-Allan Ornstein, Wealth vs. Work: How 1% Victimizes 99%. p. 214

Some say that college dictates success–that social mobility relies on education. Why, then, do those those at the bottom of the totem pole have a society set against them getting a college education? Does excellence matter anymore, or has higher education become a result of money and circumstance, instead?