Social Mobility: Key To Inclusive, Real & Sustainable Development
Our global social mobility index ranking is in the last decile.
Social mobility is the ‘enhancement’ in personal circumstances enabling better life than the parents. For the poorest 20%, opportunities, even their fate is tethered to socio-economic status at birth.
Low social mobility fortifies several outcomes including health, education, achievement and income. The frailty of the ecosystem further diminishes efforts, erodes value.
Social mobility is a trampoline; not a safety net
India’s has taken meaningful strides, and emerged as an economic power. It has pulled 400 million out of abject poverty. Similarly, there have been significant achievements across many other socioeconomic parameters. However many others have deteriorated; inequality is rising, social mobility decreasing, and worsening.
Our policymakers invariably blame globalization, automation, even history & geography, and most of everything else for lower social mobility. However an honest assessment would reveal it is the policymaking that has failed the poor. A Crux research across 250 policy makers and practitioners articulates that most welfare initiatives are regime centric, sporadic, often random and temporary. Merit based, consistent, well targeted, effectively implemented programs yield better returns, and are societal multipliers.
A third of Indians are poor, many more are socio-economically denied. They are cursed, doomed to deprivation; have longer poverty stints; and in most cases for generations. The Crux study extrapolated both the intensity i.e. vigour and impact of that ‘journey’ to catch up with those at the top, and momentum i.e. how many strides does it take to move up the ladder of social mobility.
It presents a dismal picture.
Inequality is both a cause and a consequence
The impact (doing better or worse than their parents) of poverty is as high as 80%, against 15-30% in developed economies. The poor receive fewer opportunities, meagre resources, experience stiffer barriers, poorest suffer unsurmountable blockades. If this was not bad enough, these inequalities of opportunity accelerate into long-term detriment, even entrenching socio-economic chasm.
A cross sectional study reveals the inequality graphically. 2% own everything worth owning. Next 15% consuming class can afford every discretionary item on sale. Most do. The next 40% ‘work to live’. They lose their savings to the inevitable hospital bill, or to calamity not unlike the pandemic.
Rising tides lift the yacht. But small boats sink
The rest 500 million only toil. Only a fifth of the toiling class will have a better quality of life than their parents.
The Crux study further enunciates that the poorest 20% in Bihar suffer 4 generations before grasping the median income; other northern states fare no better. Maharashtrians will take three. Even the developed states of the south will ‘lose’ two generations. 80% of Chinese, 50% of Bangladeshis will do better than their parents.
Our policymakers look at poverty from the narrow ‘economic’ prism and attempt addressing it thus. Most rarely acknowledge, leaning on the Kuznets hypothesis that inequality is an ‘eclipsing’ phase of economic growth. They erroneously believe & brandish the idea that income inequality is inevitable, but ‘temporary’ outcome of a high growth economy.
We haven’t seen the evidence; in fact exactly the opposite. Inequality is rising.
The Crux study reveals how the government’s longstanding and inadequate policy framework has been largely value depreciating. The heat maps of poor households across ‘deprived’ district and the amount that each district spends welfare schemes depicts a striking extent of misallocation. The districts in Bihar, Chhattisgarh, MP and UP, home to the poorest 60% are allotted disproportionally lower resources because they lack administrative capability and ability to spend (implement).
Policymaking lacks playbook, needs a novel approach
Ironically ‘eligible’ poor are denied their due because of lower administrative capacity. It’s a vicious cycle.
Inequality and social mobility are complex issues. A deep down study of the several policy frameworks hardly justifies any confidence. India has no sustentative roadmap, nor a holistic outcome-based architecture.
Generic policy solutions have limited scope. Macroeconomic focussed approach may stimulate growth (it indeed has), but not sufficiently to enhance social mobility. There are about 1000 welfare schemes ‘strewn & dispersed’ around by different regimes ‘hoping’ a few will heal the wound.
Once the pandemic is controlled India may have a bigger calamity to address. Transformational changes brought by ‘digital’ will deepen the disadvantage. At the macro level technology will displace many low- middle-wage jobs, hurting 60% of India’s workforce. Depth & duration of lockdowns has ‘evaporated’ savings, prolonging the misery. The ‘stripping’ or even wiping of life savings is periodic, and at least three time in their life cycle.
Pandemic will lower social mobility.
A 5 trillion dollar economy, even rising per capita income is not a real indicator of development. Quality of living is real development. The economic multipliers of social mobility are many times more.
Poor suffer health and economic outcomes
Both healthcare and higher education impact income and productivity, and are key to upward mobility but oriented towards the rich. Poor cough up 10 times more (factoring the income) for healthcare and job ‘seizing’ education.
The Prime Minister appreciates and must embrace the idea that while low social mobility impacts the individuals, it has even a larger bearing on both the society and the economy. It stifles harmony, is socially corrosive, and politically smothering. Inequality fuels conflict & instability, adding friction to an overstressed ecosystem.
It must not be lost on our policymakers that while the scale is important, the momentum is equally so. A year’s inaction and delayed effort sets the outcome by 5. India will require robust and holistic reforms across several sectors.
The policymakers need a missionary zeal, innovative, even radical policy framework. India will need specialised cadre of thinkers. And doers with a robust toolkit.
Life of dignity
The poorest deserve equality of opportunity to succeed in life. Missionary zeal can alleviate the deprived from the unfair economic disparities, provide opportunities to the poorest, and expand access for lower-middle income.
The PM’s vision must be sincere. Goal must be singular. He must exploit political capital and make a difference to the lives of millions. And for generations.
