Not quite sure what to make of this... Much of the reason why social mobility is higher in Europe is because of government wealth re-distribution via social welfare. Still it is interesting to note... http://news.yahoo.com/news?tmpl=sto...e=13&u=/nm/20060426/us_nm/economy_mobility_dc America's rags-to-riches dream an illusion: study By Alister Bull 1 hour, 23 minutes ago WASHINGTON (Reuters) - America may still think of itself as the land of opportunity, but the chances of living a rags-to-riches life are a lot lower than elsewhere in the world, according to a new study published on Wednesday. The likelihood that a child born into a poor family will make it into the top five percent is just one percent, according to "Understanding Mobility in America," a study by economist Tom Hertz from American University. By contrast, a child born rich had a 22 percent chance of being rich as an adult, he said. "In other words, the chances of getting rich are about 20 times higher if you are born rich than if you are born in a low-income family," he told an audience at the Center for American Progress, a liberal think-tank sponsoring the work. He also found the United States had one of the lowest levels of inter-generational mobility in the wealthy world, on a par with Britain but way behind most of Europe. "Consider a rich and poor family in the United States and a similar pair of families in Denmark, and ask how much of the difference in the parents' incomes would be transmitted, on average, to their grandchildren," Hertz said. "In the United States this would be 22 percent; in Denmark it would be two percent," he said. The research was based on a panel of over 4,000 children, whose parents' income were observed in 1968, and whose income as adults was reviewed again in 1995, 1996, 1997 and 1999. The survey did not include immigrants, who were not captured in the original data pool. Millions of immigrants work in the U.S, many illegally, earnings much higher salaries than they could get back home. Several other experts invited to review his work endorsed the general findings, although they were reticent about accompanying policy recommendations. "This debunks the myth of America as the land of opportunity, but it doesn't tell us what to do to fix it," said Bhashkar Mazumder, a senior economist at the Federal Reserve Bank of Cleveland who has researched this field. Recent studies have highlighted growing income inequality in the United States, but Americans remain highly optimistic about the odds for economic improvement in their own lifetime. A survey for the New York Times last year found that 80 percent of those polled believed that it was possible to start out poor, work hard and become rich, compared with less than 60 percent back in 1983. This contradiction, implying that while people think they are going to make it, the reality is very different, has been seized by critics of President Bush to pound the White House over tax cuts they say favor the rich. Hertz examined channels transmitting income across generations and identified education as the single largest factor, explaining 30 percent of the income-correlation, in an argument to boost public access to universities. Breaking the survey down by race spotlighted this as the next most powerful force to explain why the poor stay poor. On average, 47 percent of poor families remain poor. But within this, 32 percent of whites stay poor while the figure for blacks is 63 percent. It works the other way as well, with only 3 percent of blacks making it from the bottom quarter of the income ladder to the top quarter, versus 14 percent of whites. "Part of the reason mobility is so low in America is that race still makes a difference in economic life," he said.
One difference that stands out is the education achievements of most European countries... multiple languages, minor issues with religion and cultural values. strong support for public schools, math... in short, a greater societal appreciation of education, which when applied to everyone, leads to greater opportunities. I don't find it surprising that we are on par with Britain when we are the two countries that have a tradition of private schools and opting out of public education.
Agree, but I don't know why passing a small portion of what you have accumulated during your life to your children and grandchildren is something seen as a failing, or that it means those who are poor don't have a chance to improve their standard of living over their parents and grandparents in the United States. There is definitely a problem with upward mobility between the classes (as defined by income... how else would we define it in this country??), especially for the poor in this country, but I know people who have done it, and my own parents did it. My mother purchased the Texas Tomorrow Fund for my two kids when my youngest was still in a crib. As events have unfolded in Texas, that generous act has proven to be a financial windfall for us, and for my kids. (it covers college tuition... 100% at UT or A&M, for example, although I hope they go someplace like MIT, Stanford, or Princeton... heck, or Rice, an excellent school, although I don't know how it survived texxx!) I would think there would still be greater upward mobility between the classes in the US, as opposed to Great Britain. Still, it's a huge problem here. No doubt about it. Whereas my parents were able to move up with just my father working, today, in most cases, you need both parents working to maintain the same standard of living, a blow to the middle class, no matter how many high tech toys our kids have. Having a parent at home to raise them is far more important. To a great extent, we've lost that. Being poor and having facing the same problem is far worse, obviously. (hope I didn't ramble all over the place too much!) Keep D&D Civil.
This is just anecdotal but my dad fled China in the late 40's to escape Communism after WWII and ended up with a house in the Suburbs (that is now in the city), a wife, 4 kids and, at one time, a station wagon. The only thing missing was the proverbial white picket fence (would not have gone with the ranch-style house). I also new a guy in college (black guy for what that's worth) and he joined the Army to "get out of the Ghetto". He knew he needed to get out and the Army seemed like the way to do it. After he got out of the Army he went to college on money saved while in the Army, only he found UH so cheap (this was in the early 80's) that he really didn't need his GI Bill (or whatever) to pay for it. He said he just went shopping with the money and paid for his shool with his job at Foley's. So, you can make it if you want. With regard to two parents having to work.... I'm not so sure about that. All my friends with kids have wives who only work if they want to. They all sacrifice and don't have everything they could have if both parents worked but they made the decision that someone staying home with the kids was more important. They all, btw, work tons of hours at the office and all do pretty well (75k to over 100k). If you think about it there is WAY more stuff that you "have to have" today then there was when your parents were young. For example, nowdays you "have" to have: Cell phones (probably two or more if you have a family) More than one phone line (although this is growing less necessary with broadband and cell phones) Broadband or dial-up internet access Cable or Sattelite TV DVD rentals or Pay per view New cars (my parents never purchased cars new) Nice furniture (my parents house just had what they had; the NEVER purchased expensive furniture) Can anyone else think of stuff they people generally have now that your parents didn't have? All this stuff adds up to hundreds of dollars per month that your parents didn't even have the opportunity to worry about.
Insurance. I'm self employed and I have to get: Health insurance Homeowners insurance Auto insurance Life insurance Business insurance None of these are cheap.
That's what I got from the article too. Wasn't sure if was extrapolating its findings that the rich stay rich, to the assumption the poor cannot become rich.
75-100k? Uh, they make three times the average salary by themselves so they don't count. What exactly do they sacrifice, 2 BMW instead of 3? Why don't you use an example of people earning less or equal than the average salary of 35,000 whose employer doesn't offer benefits etc?
I think these were sepearate findings, neither used to make an assumption about the other. First, they found that if you are born poor, you will likely stay poor (22% of rich stay rich while 99% of the poor stay poor). Second, they found that there was low intergeneration mobility. This is a conclusion they can draw from from the same data used to make the first finding. They also found education and race to have strong correlations with economic mobility or the lack thereof. I'm sure that will be fodder for much political/ideological debate. I find the stories in this thread about "knowing a guy who did it" interesting. The article notes the persistent belief in individual class mobility despite so much data to the contrary. I think this anecdotal "if he/she did it I/you/they can do it, too" is at the root. These very same stories and the accompanying Horatio Alger mythology have helped form the foundation for various, often conservative, American ideologies for the last 150 years. Politicans and political parties have leveraged this mythology (as well as racist ideology) well and, notably, the ideology obscures class conflict even when it may be apparent.
The Economist had a study on this a year or two ago. The stated similar facts, but praised the mobility of American system that allows people to reinvent themselves if need be. If I have time to spare, I'll try to find the article...
I don't see how anyone making 75k to 90k can afford a BMW with kids and a mortgage. Maybe if they leased it..... I made 90+K for a few years and was always wondering how people afforded the stuff they afforded. I have a two bedroom house and drive a truck... Of course when I lost my job I was able to work part time with no worries because we don't live extravagantly. Just about everyone I know (except one single woman) who went to college makes more than 70K a year. That one woman is a school teacher. They all work a lot of hours to get where they are and to earn the kind of money they earn.
it says 99% of poor don't make it to the top 5% of income.. I think that's different than 99% stay poor... Considering the fact that I'm sure a portion move into middle class even if not into top 5%
Most of my friends went to college too, but they are mostly teachers, artists, writers, musicians etc. who like what they do but don't make tons of money or work at large companies that offer tons of benefits. 35,000 is the average salary in the US so many make less than that. Yeah some people make 75,000 but that is way above average, it's not even close to the norm. So most cant afford a family with a stay at home mom. That's fantasy land.
Also, there was no definition of what the author considered "rich." Like I said, my parents grew up poor, during the Depression, and before my Dad passed away in his early 60's, he had become a department chair at a major university, and had an income and lifestyle he certainly would considered rich when he was young. (and got his chance because of the GI bill, and working 3 jobs while getting his degree) You know, it's rather condescending to say something like that. Some of us have seen several people pull themselves up. My friend with the Harvard MBA, who's now sitting on a 7 figure payday from an IPO he helped put together, grew up in a tiny house with 4 sisters, him, and his parents crammed into it. He did work at Hughes Tool for 7 years before having an epiphany. It happened when his boss told him that he'd learned every machine in the place, he wasn't going to get into management (not the right connections, he wasn't the type to "suck up," and no degree), so he should pick a lathe, or whatever it was he was working on, and just stay there. He went to UT on credit cards and student loans. He'd developed good credit while at HT, so he charged everything, and paid the cards off with the loans at the beginning and end of each year. Then he went through Harvard the same way, He made so much money after he graduated from Harvard, that he paid the loans off in 5 years, or less, while getting married to a very lovely Yankee. Moved back to Houston, lived in West University, and started cranking out daughters. (with a little help) To tell you the truth, my wife and I didn't think he'd get into Harvard. My wife helped write his application, and kept telling him he needed to tone it down... that it was too aggressive. He stuck with aggressive, and said he knew what he was doing. He really wanted to go to Stanford, but didn't make it. Apparently Harvard had a slot for a blue-collar, aggressive white guy from Texas. These things happen. You may not know anyone personally who's done it, but I've known some people. Having said that, the gap between the rich, and the middle class, working class, and poor people of this country has become a chasm. The policies of this Administration have been particularly harmful to every social and income class but the rich. Reagan's original tax policies, while I disagreed with them, to a large extent, were pretty fair compared to what we see today from Bush and the GOP Congress. They've taken his original income tax legislation, and turned it into a farce, in my opinion. Reagan must be spinning in his grave. Enough rant on this subject for now. Keep D&D Civil.
"In other words, the chances of getting rich are about 20 times higher if you are born rich than if you are born in a low-income family." That's a newsflash. If you're born rich you have a better chance of being rich than if you're born poor. No, the dream is not an illusion.
Take it how you want. I know guys (from childhood and from college) who are those people: came up from the ghetto to immense wealth. My statement is predicated on the fact that people have seen folks do it. It happens and that is what keeps the hope alive. I know even more people who have tried and failed. I don't let the 3 I know make the rule. I too am concerned about the chasm between classes and think that,and how current policies are affecting the middle class, are a major issue.
The persistence of the American Dream, despite all evidence (both statistical and often experiential) to the contrary, is probably the primary factor why the United States has very little class consciousness today. People view being poor as a transitory condition when, for most, it will actually be a life-long curse.
to a degree. look at germany's school system. its horrible. it ensures that immigrants at best go to vocational schools whereas as traditionally rich kids go to actual universities.
