Economic ladder no harder to climb today, U.S. report finds

[alp227]

Source: CBC

The working poor have the same chance to move up the socioeconomic ladder today as they did 40 years ago, but the odds of that happening are still pretty low, new research out of two prestigious universities and the U.S. government shows.

A study published Thursday by the National Bureau of Economic Research doesn't back up the conventional wisdom that a widening gap between rich and poor has made it harder for America's working poor to climb the economic ladder into prosperity.

The issue of income inequality has been a frequent problem for politicians from both sides to target of late. The general public has a widespread belief that there are fewer opportunities today for economic advancement through hard work and ingenuity.

Read more: http://www.cbc.ca/news/business/economic-ladder-no-harder-to-climb-today-u-s-report-finds-1.2508409

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Wall Street Journal: New Data Muddle Debate on Economic Mobility

The authors of the study being published Thursday by the National Bureau of Economic Research concluded that a widening income gap hasn't translated into less economic mobility than in the past. At the same time, they said economic mobility in the U.S. remains relatively low when compared with other developed nations, and is particularly poor in some parts of the country.

Raj Chetty, a Harvard University economist who co-authored the study, said the stable but low levels of mobility create higher stakes for what is known as the "birth lottery," the impact of the household that children are born into. This is because the gap between the poorest Americans and the wealthiest Americans has widened markedly in the past several decades.

"Today, moving up the income ladder has a huge effect, so we should be more concerned about mobility today than in the past," he said.

The study examined anonymous data from about 50 million people born since 1971 and is more comprehensive than past work on the subject, some of which has shown mobility to be relatively flat and others that projected mobility had worsened.

Washington Post: Economic mobility hasn’t changed in a half-century in America, economists declare

Slate: Family Matters: What’s the most important factor blocking social mobility? Single parents, suggests a new study. (Written by an American Enterprise Institute fellow, be advised.)

AP: Study: Climbing income ladder hasn't grown harder

[OnyxCollie]

1. Economic ladder no harder to climb today, U.S. report finds

"The working poor have the same chance to move up the socioeconomic ladder today as they did 40 years ago, but the odds of that happening are still pretty low..."

As shitty as it's always been.

[Swede Atlanta]

2. Interesting finding.....

It is no more difficult for the "working poor" to climb up the socio-economic ladder today than 40 years ago. Chances - next to nil.

What is missed here is the fact that more and more Americans are finding themselves among the working poor and the pukes are stripping the social safety net away layer by layer.

So while it is just as hard to climb out of the hole as before, more people are sinking into or toward the hole.

I want someone to do that study. They say we have reduced poverty. That may be true at among seniors who now at least have Social Security and Medicare until the pukes turn those into voucher programs that benefit their wealthy friends. But I have a hard time believing we have made much progress in reducing real poverty over the last 40 years.

It may be different than it was before in terms of demographics but my view is it is still very similar.

[paulkienitz]

7. we've made tremendous progress at reducing poverty...

in India and China and Latin America.

[Bernardo de La Paz]

3. Economic ladder hardest in the Reagan Republicans states

http://www.equality-of-opportunity.org

This map shows the average percentile rank of children who grow up in below-median income families across areas of the U.S. (absolute upward mobility). Lighter colors represent areas where children from low-income families are more likely to move up in the income distribution.

[1000words]

4. Meaning, we have been played for suckers for longer than we think

[malthaussen]

5. Two chances, slim and fat.

I love these idiots.

-- Mal

[Squinch]

6. That doesn't even make any sense. The middle class is shrinking fast, we are becoming

two classes: the poor and the super rich. So while it may be possible to move a few rungs, those rungs are closer together, and moving up a class doesn't mean much unless you get to the top, which few do.

[Igel]

8. Newspapers keep saying this.

In 2004 or '05 the NYT had the same claim, with the inference that much of the middle class was becoming lower class.

The graphic with *that* article said something different: Most of the loss of the middle class was to the upper class. A portion of the loss became lower-than-middle class, but not most of the loss.

In 2012 Pew published a middle class research paper that said the same thing. From 1971 to 2011 the middle class went from 61% to 51%. The lower income group increased by 4%, from 25 to 29%. The upper income group went from 14 to 20%, an increase of 6%. In other words, the middle class was "hollowed out," but 60% of the loss moved up.

The paper referred to in the OT expressed the authors surprise, I think, in pointing out that the increase in the 1%'s income/wealth was irrelevant to the mobility rate. (They seemed to express surprise in a few places--for example, in the discussion of race.) The upshot is that segregating poverty is bad; segregating affluence is pretty meaningless. There are lots of strange implications like that in the paper. It's a good read, but a depressing one, if only because if it's correct then a lot of strategies for increasing social mobility are pointless.

[happyslug]

10. Here is the US Treasury Report from 2005 that those Newspaper report were based on

http://www.treasury.gov/resource-center/tax-policy/Documents/incomemobilitystudy03-08revise.pdf

What I liked was the report that 50% of the people in the lowest Quintile (20% of the population) moved to a higher Quintile within 10 years.

Here is how the bottom 20%. Fit into all Five Quintile (Each 20% of the population). Please note this is for people 25 and over:

In 2005, people who had been in the lowest 20% (The Lowest Quintile) in 1996 where now in the following Quintiles:

42.4 % were still in that lowest 20%

28.6 % had moved up to the next 20%

13.9 % had moved to the middle Quintile

9.9% had moved to the second highest Quintile

5.3 % had moved to the highest 20 % the highest Quintile.

Now if we look into the SAME Taxpayers the movement is less pronounced (i.e. instead of looking at everyone over age 25 in both 1996 and 2005, you just look at the people who were over 25 in 1995 and where they were in 2005):

55.1 % where still in the Lowest Quintile

23.7 % had moved up one Quintile

10.8 % had moved to the middle Quintile

6.9 % had moved to the next to the top Quintile

3.6 % had moved to the top Quintile

Please remember we are talking about income mobility. With 51,366 being median Income in 2012, $54.522 in 2005. You can say 50% of the population in 2005 earned less then $55, 522, 15.7 % of the population in the lowest Quintile in 1996 had income over $55,522 in 2005, but 84.3% of the people in the lowest Quintile in 1996 were earning less then $55,522 a year in 2005.

I also notice the report gives no actual numbers in Dollars, just percentages, and 2005 was the peak year for the economy, it has declined since, just look at the Median Income in 2012, which is $2844 less in 2012 then it had been in 2005.

In 2005 the lowest 20% earned less then $19,178
The Second Quintile was between $19,178 and $36,000
The Middle Quintile was between $36,000 and $ 57,660
The next to the top Quintile was between $57,660 and $91,705
The top 20% earned more then $91,705
The Top 5% earned more then $166,000

For comparison look at the 1967 numbers (adjusted to 2012 dollars):

The lowest Quintile (20%) was people who earned less then $18.032
The Second Quintile was between $18,032 and $35, 163
The Middle Quintile was between $35,163 and $49,907
The next to the top Quintile was between $49,907 and $71,167
The top 20% earned more then $71,167
The Top 5% earned more then $114,203

The bottom two Quintile, in terms of income, are about the same in 2012 as it was in 1967, but the top three Quintile has seen an increase since 1967 (and I suspect it is on the top end of the middle Quintile not the whole Quintile).

Sorry, i can repeat the above for the US Census Bureau does then as Excel Spread sheets, so you have to go to the US Census Bureau web site if you want to look at the reports as to income.

http://www.census.gov/hhes/www/income/data/historical/inequality/

[joshcryer]

12. Good stuff happyslug.

Appreciate your detailed posts like that (particularly your military strategy / equipment / etc perspective, but this was a nice breakdown).

[enki23]

9. Right. If you just ignore the massive portion of wealth locked up in the top fraction of a percent.

Misleading stats. If wealth has become more concentrated at the top, and if people at the top do not fall out of the top, then movement to the top fucking *necessarily* becomes more difficult. If you must write off everything in the right tail, movement within the rest of the distribution might well become easier. Because, while the average recedes into the far right tailed distance, the main distribution is playing in a smaller and smaller pool.

Here's a fucking thought experiment. Imagine there were just a few obscenely wealthy robber barons, a hundred or so, who controlled 99.9% of all the nation's wealth. Now imagine that the difference between poor and upper middle class was the difference between owning a car or not owning a car. Holy shit, look at that mobility! All you need to do is acquire a used car, and you're climbed right on up that ladder.

But, of course, only if you just write off all the wealth at the top. Which is fine, because it's really just a very, very long fucking tail in your distribution. Average wealth is way the fuck over almost everyone's heads. But median wealth is still in your potential future!

[joshcryer]

11. Not harder, still damn unlikely and practically impossible.