Upward Mobility in the Land of Opportunity

I read a wire service editorial in the local paper today.  (Apparently the editors of our paper don’t have enough opinions of their own so they need to buy one once in a while.)  It was labeled as “Distributed by Creators Syndicate,” and was entitled Opportunities Uneven in the Land of Plenty.  (I looked up Creators Syndicate on the web.  Apparently they are an outfit in LA that provides copy and other materials to publishers who can’t create their own.)

The piece was, well, disturbing.  Not because of what it said, but because of how low an opinion its writers had of the country in which they live (presumably they’re Americans).  The editorial first talks about a Pew research study that found that 53% of blacks who were in the lowest income level would stay there, compared with 33% of whites.  Also, 56% of blacks who were raised in the middle tier fell to the lowest tier in their lifetimes, while 32% of whites did the same.

The conclusion of the editorial were that “no matter how hard you work, if you were born into a certain category (apparently, poor and black), there is a chance that you will be stuck there,” and that “there is precious little mobility.”  They then went on to spew the normal bromides about how the issue could be solved through more education, and that we need to funnel kids into trade schools and fund high quality  preschools for low income families.

I say this is a load of hog wash.

There is still more opportunity available in America for people to move from poverty to success than in 99% of the countries in the world.  Take the example of Pejman Nozad, whose life is described in Forbes, who came to America with $700 in his pocket and a few words of English.  He is now an extremely successful venture capitalist (you know, the people like Mitt Romney who we are all told are the bad guys) with a net worth in the millions of dollars.

For every Pejman Nozad, there are tens of thousands of people who come here in poverty who don’t make it to his status, but at least reach a middle class lifestyle and are able to send their kids through college.  This doesn’t happen in places like Mexico and India.

So how is it that some people can become so successful, starting from so little, while such a large percentage of people born in poverty stay in poverty, all in the same country?  I believe it has nothing to do with education (although those who become successful usually do get at least a high school education).  It has to do with whether you are a taker or a giver.

Those at the lowest end of the poverty spectrum in America are told from an early age that they deserve to get things because they are poor.  Unwritten in that message, but clear to most, is the implication that they are somehow defective and therefore need help because they would be unable to do for themselves.  The most vile and insidious form of racism left in America is the notion that minorities – blacks in particular – are in need of assistance because of their race.  This comes both from the welfare advocates in Congress and their family and neighbors.

Nobody who “works hard” stays in poverty.  If you are willing to really work to provide value to your employer and his/her customers, you will rise to at least middle-class income levels.  If you are willing and able to expand the reach of the value you are providing to people, you can become very wealthy.

A great teacher who really cares about his students and provides a great education will do well.  An individual who creates a company selling products that help a whole generation of children learn will become rich.

A mechanic who provides great service to the customers of a repair shop such that people continue to bring their cars to his employer’s shop will do well.  An individual who opens a chain of repair shops and ensures that his mechanics give great service, meeting a whole city’s need for quality auto repair, will become rich.

Getting an education, even if it is a doctoral degree, will not necessarily lead to a life of wealth (just ask the plethora of Gen y’ers with a doctorate in French Literature living in their parent’s home playing World of Warcraft until 3 AM and sleeping in until noon).  Attending school to gain skills needed to help meet other’s needs is useful.  If you can attend a trade school and learn to repair large motors, you can get a good job in a factory.  Likewise, if you can find somewhere to work and learn from experienced mechanics how to fix large motors, you can get an equally good job in a factory.

The secret to creating mobility is not education or Head Start.  The secret is to stop telling people that they are somehow defective and deserve to spend their lives getting stuff from society.  We need to start telling people that we expect them to contribute and do their part to help society.  We need people to build bridges.  We need people to make cars.  We need people to design buildings.  We need people to educate our children, clean offices, trade securities and run companies.  We need to tell then that the path to prosperity doesn’t come from a check in the mailbox, it comes from finding a need and filling it.

Please contact me via vtsioriginal@yahoo.com or leave a comment.

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Disclaimer: This blog is not meant to give financial planning or tax advice.  It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA.  All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.

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