dagblog - Comments for "Economic mobility hasn’t changed in a half-century in America, economists declare"

There it is.

moat — Fri, 24 Jan 2014 01:16:42 +0000

There it is.

The findings also suggest

Peter Schwartz — Fri, 24 Jan 2014 00:34:40 +0000

In reply to Economic mobility hasn’t changed in a half-century in America, economists declare

The findings also suggest that who your parents are and how much they earn is more consequential for American youths today than ever before. That’s because the difference between the bottom and the top of the economic ladder has grown much more stark, but climbing the ladder hasn’t gotten any easier [....]

So I heard about this on MarketPlace today, and I'm having some trouble understanding it.

• So, it's just as hard or easy to move up as it ever was, but...

• But people start on vastly different rungs on the ladder by virtue of their family...

• So the differences are wider, but they don't get much wider or less wide over time.

If that's right, then how do those vast differences come about in the first place?

Let's eliminate scions of the Johnson and Johnson family who've had their money "forever."

Let's talk about someone like Jobs who went from being middle class to being a member of the .000001%. Maybe that's not included in the definition of "mobility." Maybe "mobility" is when someone "works his way up" and his son moves from there higher up on the on ladder. That's not what Jobs did. He didn't "move up"; he pole vaulted up over the ladder.

So maybe the 1%-plus are people who pole vaulted or catapulted themselves up over the ladder, and their kids start from that point and never move up much from there. They're born rich and they die rich. And middle class kids may move up, but they will never get anywhere close to where the 1%-plus are because of where they started. Sort of like being on a carousel; you move forward, but never close the distance between you and the horse in front of you.

Meanwhile, most of Jobs's friends from high school never found a pole vault or never created one, and they are stuck where Jobs would've been stuck had he not found his pole vault. Plodding along...and moving up maybe, but never coming close to where Jobs is.

So maybe the point is, our society is now such that there are ways for a few people to pole vault or catapult themselves up--like those 85 people who own more than billions below them--but that isn't really "upward mobility" because there's no clear path for people to follow to replicate that kind of dramatic jump in economic status.

So maybe the key point about "upward mobility" is that there has to be a reasonably clear path: You get a BA...you join the union...you get a factory job...you do XYZ and you will "move up." No guarantees, of course. But you don't need to be exceptionally smart or talented or lucky or ambitious to do it. Just averagely so. You just need to want to "get ahead" and have enough discipline and do the "right things" and you are likely to succeed and move up.

Move up to the next rung. Your kids will start from that rung and move up to the one just above. And so on.

So are the authors also saying that this sort of gradual upward mobility is still around and as easy (or hard) as ever, but the pole vaulters are jumping so high and so fast, it just seems like everyone else is standing still or losing ground?

Or are they saying that the pole vaulting is actually making it harder for the traditional step by step upward mobility to take place?

One of the things I wonder about is this: Conservatives will often ask, "How does it hurt me if my neighbor is 100x richer than I am?" In a way it doesn't. But then again, do those 85 people who own more than the billions below them make it harder or more expensive for those billions to acquire what they need?

If you think of a gentrifying neighborhood, you can see how a bunch of rich people moving in and paying a lot for homes can push prices (and taxes) beyond where the people already living there can afford them. So they're pushed out.

But this same thing happen across a society as a whole? Can a small group of people with an ungodly amount of money bid up the cost of living across a society in a such a way that it makes it significantly harder for those below them to afford what they need?

High-quality spin on the

artappraiser — Thu, 23 Jan 2014 22:51:29 +0000

In reply to Economic mobility hasn’t changed in a half-century in America, economists declare

High-quality spin on the report from the "family values" right; includes graphs from the report on mobility in communities by # of single mothers and by racial segregation:

What’s the most important factor blocking social mobility? Single parents, suggests a new study.
By W. Bradford Wilcox, Slate.com, Jan. 22, 2014

[....] Chetty, who recently won the John Bates Clark Medal for his achievements as an economist under the age of 40, has been careful to stress that this research cannot prove causation—that removing or adding these factors will cause mobility in America. The study also acknowledges that many of these key factors are correlated with one another, such as income inequality and the share of single mothers in a community. This means that economic inequality may degrade the two-parent family or that increases in single parenthood may increase economic inequality. But what does seem clear from this study of the “land[s] of opportunity” in America is that communities characterized by a thriving middle class, racial and economic integration, better schools, a vibrant civil society, and, especially, strong two-parent families are more likely to foster the kind of equality of opportunity that has recently drawn the attention of Democrats and Republicans alike.

Throughout his presidency, Barack Obama has stressed his commitment to data-driven decision-making, not ideology. Similarly, progressives like Krugman have stressed their scientific bona fides, as against the “anti-science” right. If progressives like the president and the Nobel laureate are serious about reviving the fortunes of the American Dream in the 21^st century in light of the data, this new study suggests they will need to take pages from both left and right playbooks on matters ranging from zoning to education reform. More fundamentally, these new data indicate that any effort to revive opportunity in America must run through two arenas where government has only limited power—civil society and the American family [....]

Upward Mobility Has Not

artappraiser — Thu, 23 Jan 2014 22:13:11 +0000

In reply to Economic mobility hasn’t changed in a half-century in America, economists declare

Upward Mobility Has Not Declined, Study Says
By David Leonhardt, New York Times, Jan. 23/24, 2014

[....] Both President Obama and leading Republicans, like Representative Paul Ryan, have argued recently that the odds of climbing the income ladder are lower today than in previous decades. The new study, based on tens of millions of anonymous tax records, finds that the mobility rate has held largely steady in recent decades, although it remains lower than in Canada and in much of Western Europe, where the odds of escaping poverty are higher.

Raj Chetty, a professor of economics at Harvard and one of the authors, said in an interview that he and his colleagues still believed that a lack of mobility was a significant problem in the United States. Despite less discrimination of various kinds and a larger safety net than in previous decades, the odds of escaping the station of one’s birth are no higher today than they were decades ago.

The results suggested that other forces — including sharply rising incomes at the top of the ladder, which allows well-off families to invest far more in their children — were holding back talented people, the authors said.

“The level of opportunity is alarming, even though it’s stable over time,” said Emmanuel Saez, another author and a professor at the University of California, Berkeley. Mr. Saez and Mr. Chetty are both recent winners of an award for the top academic economist under the age of 40.

The study has the potential to alter the way Mr. Obama and other public figures talk about mobility trends.

“The facts themselves are pretty unassailable,” said David Autor, an economist at the Massachusetts Institute of Technology who has read the paper [....]

Hmmmmm . . . That article

oldenGoldenDecoy — Thu, 23 Jan 2014 21:57:24 +0000

In reply to Economic mobility hasn’t changed in a half-century in America, economists declare

Hmmmmm . . .

That article makes the following words of MLK as meaningful today as back in 1967 in a speech to the Southern Leadership Council titled, "Where Do We Go From Here?"

"We must create full employment, or we must create incomes. People must be made consumers by one method or placed in this position, we need to be concerned that the potential of the individual is not wasted. New forms of social good will have to be devised for those for whom traditional jobs are not available... Work of this sort could be enormously increased, and we are likely to find that the problem of housing, education, instead of preceding the elimination of poverty, will themselves be affected if poverty is first abolished."

And ... Here we are all these years later into the second decade of a brand new century.

So ... as MLK asked, "Where Do We Go From Here?"

~OGD~

What If Social Mobility Is

artappraiser — Thu, 23 Jan 2014 21:47:59 +0000

In reply to Economic mobility hasn’t changed in a half-century in America, economists declare

What If Social Mobility Is Never High Anywhere?
By Matthew Yglesias, Moneybox @ Slate.com, Jan. 23, 2014

There's a lot of news coverage today of new research from Raj Chetty and Emmanuel Saez indicating that social mobility in the United States is not falling, offering the not-so-reassuring news that the reason it isn't falling is that it's been low for a long time.* At least 50 years.

Recall the old old conventional wisdom on this was that the United States might be a society of high income inequality, but at least it had a lot of mobility. Then the new old conventional wisdom became that this was wrong—that in international comparisons more egalitarian countries (the Nordics) had more mobility, so as America has become more unequal we've also become less mobile. Now today we get the new conventional wisdom, which says that America is a low-mobility country but has been this way for a while.

I'd like to put on the table a different research program, associated with UC–Davis economic historian Gregory Clark, which argues that economic mobility is low almost everywhere [.....]