Two researchers at the Bank of Italy have documented something remarkable about Florence, the gorgeous Tuscan capital where the Medicis ruled and the Renaissance was born: The city’s wealthiest residents today are descended from its wealthiest families six centuries ago.
As The Wall Street Journal reported this month, economists Guglielmo Barone and Sauro Mocetti looked at tax records compiled in Florence in 1427 alongside municipal tax data from 2011. “Because Italian surnames are highly regional and distinctive,” the Journal explained, “they could compare the income of families with a certain surname today, to those with the same surname in 1427.” What they found was that the wealthiest names in 21st-century Florence belong to families that were near the top of the socioeconomic hierarchy in 15th-century Florence — those who were lawyers, or who belonged to the wool, silk, and shoemaker guilds.
Barone and Mocetti did not identify the actual families listed in the Florentine tax rolls, but they note that about 900 of the surnames are still used in Florence by some 52,000 taxpayers. Not all of them are descended from those who bore those names in 1427, of course. And the new study appears to focus primarily on correlations among the very highest and lowest income-earners, not on the majority in between. Over the course of six centuries, the authors note, Florence has undergone “huge political, demographic, and economic upheavals,” and they acknowledge that intergenerational mobility is higher in Italy today than was the case before the 20th century.
Yet even with all those caveats, the persistence of economic and social status across 600 years of Florentine history is eye-opening. And it helps explain what impelled myriads of Italians to uproot their lives and relocate to new homes — especially the 5 million people who immigrated to the United States between 1876 and 1930.
Critics have been lamenting the death of the American Dream for decades, but the US remains what it has always been: a land of opportunity where neither poverty nor wealth is immutable, and no one’s station in life is fixed at birth. Politicians whip up economic envy; activists stoke resentment at a “rigged” system. And yet economic mobility is alive and well in America, which is why so many foreigners still stream to our shores.
Ample evidence bears this out, much of it gathered in long-term studies that track the earnings of large blocs of Americans over many years.
In 2012, the Pew Charitable Trusts published one such study, appropriately titled “Pursuing the American Dream.” Drawing on longitudinal data spanning four decades, Pew was able to show that the vast majority of Americans have higher family incomes than their parents did. Among US citizens who were born into families at the lowest rung of the economic ladder — the bottom one-fifth of income-earners — a hefty 57 percent had moved into a higher quintile by adulthood. In fact, 4 percent had risen all the way to the highest quintile. Over the same period, 8 percent of those born into the highest income category had dropped all the way to the bottom.
For a different examination into economic mobility, analysts at the Treasury Department studied 84 million federal returns of taxpayers who had taxable income in both 1996 and 2005. They, too, found that “roughly half of taxpayers who began in the bottom income quintile moved up to a higher income group.” For two-thirds of all taxpayers, real incomes had increased. And — repudiating the frequent lament that upward mobility is vanishing from American life — the Treasury study concluded that the “degree of mobility among income groups [was] unchanged from the prior decade.”
The 25th great-grandsons of medieval Florentine shoemakers may still be riding high, but things don’t work that way in America. Here, riches-to-rags stories are not uncommon. When Bhashkar Mazumder, an economist at the Federal Reserve Bank of Chicago, examined the earnings of thousands of men born between 1963 and 1968, he discovered that 17 percent of those whose fathers were in the top 10th of the income scale had dropped to the bottom third by the time they were in their late 20s or early 30s. Movement between income groups over the course of a lifetime is the norm for most Americans. The rich often get richer, but plenty of them get poorer, too. Though the top 1 percent makes a popular target, it’s actually a group no one stays in for very long. On the other hand, it’s a group that 11 percent of Americans will reach at some point during their working lives.
Affluence in America is dynamic, and our economic system is biased toward success. But bias isn’t a guarantee. Mobility — up and down — depends to a great degree on the choices that people make for themselves. Individuals who finish high school, marry before having children, don’t engage in criminal activity, and work diligently have a very high likelihood of achieving success. Those who don’t, don’t.
Of course, there are impediments to mobility that are beyond the control of any individual, and that are most likely to hurt those who start out in America’s poorest precincts. Broken public schools, for example. The normalization of single-parent households. Too-easy access to welfare benefits. Counterproductive mandates, like minimum-wage laws and stifling licensing rules. Would that our political demagogues and professional populists put as much effort into dismantling those barriers as they do into demonizing the rich and yapping about inequality.
Yappers notwithstanding, the American Dream is far from dead. This isn’t Florence. No one is locked out of economic success today because of their ancestors’ status long ago. America remains the land of opportunity. Make the most of it.