Upward mobility has fallen sharply in US: study

April 24, 2017
An infographic conveying results by Chetty et al., which reveal that the probability for children to attain a higher income than their parents has dropped dramatically -- from more than 90 percent for children born in 1940 to 50 percent for children born in the 1980s. This material relates to a paper that appeared in the 28 April 2017, issue of Science, published by AAAS. The paper, by R. Chetty at Stanford University in Stanford, CA, and colleagues was titled, 'The fading American dream: Trends in absolute income mobility since 1940.' Credit: Carla Schaffer / AAAS

In a sign of the fading American Dream, 92 percent of children born in 1940 earned more than their parents, but only half of those born in 1984 can say the same, researchers said Monday.

Greater inequality in the distribution of growth is largely to blame, said the findings in the US journal Science.

"Children's prospects of earning more than their parents have faded over the past half century in the United States," said the study, led by Raj Chetty of Stanford University.

"Absolute mobility has fallen across the entire income distribution, with the largest declines for families in the middle class."

Since little data exists linking children to their parents in terms of economic performance, researchers combined US census data with tax records, adjusting for inflation and other confounding variables.

They found the sharpest declines in income in the industrial Midwest, including states like Indiana and Illinois.

"The smallest declines occurred in states such as Massachusetts, New York and Montana," said the study.

Researchers said that trying to boost gross domestic product—or the total dollar value of goods and services produced—in the United States would not suffice to fix the problem.

Rather, a concerted effort to level the playing field is needed, said an accompanying editorial by Lawrence Katz of Harvard University and Alan Krueger of Princeton University.

"In our view, faster growth is necessary but not sufficient to restore higher intergenerational income mobility," they wrote.

"Evidence suggests that, to increase income mobility, policymakers should focus on raising middle-class and lower-income household incomes."

Interventions worth considering include universal preschool and greater access to public universities, increasing the minimum wage, and offering vouchers to help families with kids move from poor neighborhoods into areas with better schools and more resources, they said.

Explore further: Today's children face tough prospects of being better off than their parents, researchers find

More information: "The fading American dream: Trends in absolute income mobility since 1940," , Science (2017). DOI: 10.1126/science.aal4617

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aksdad
2.1 / 5 (15) Apr 24, 2017
Or you could reduce regulations to even the playing field. Once businesses become established they often favor regulations that limit competition and lobby the government to implement them; usually masking the regulation as benefiting consumers.

Isn't it interesting how academics are limited by their group-think to socialist solutions for economic problems? It would be fascinating to see studies by people who actually work in private enterprise rather than college campuses. I'll bet their solutions are a lot different. And practical.
Shootist
2.1 / 5 (11) Apr 24, 2017
Upward mobility has fallen sharply in US: study


Obamanation.
MR166
1.8 / 5 (10) Apr 24, 2017
For 50 years government regulations and the courts have been anti-industry. Whole departments of the government were set up to help corporations move offshore. OSHA and the EPA were the sworn enemies of small and large business.
Today academics sit at their desks and ponder the demise of the middle class thinking that the well could never go dry and that the golden goose was immortal.
MR166
1.4 / 5 (10) Apr 24, 2017
The absolute hatred of corporations has been taught for decades in our schools and this hatred induces them to leave. Now we are hungry and sitting out in the cold rain wondering where our jobs went.
dan42day
4.5 / 5 (16) Apr 24, 2017
In a sign of the fading American Dream, 92 percent of children born in 1940 earned more than their parents, but only half of those born in 1984 can say the same, researchers said Monday.

Greater inequality in the distribution of growth is largely to blame, said the findings in the US journal Science.


Could it be because that earlier generation was born near the end of a worldwide depression and grew up in the only industrial country that wasn't bombed into the stone age during WWII?

Sounds like an opportunity to cherry pick some data from an era of unusual circumstances to exaggerate a problem and then prescribe socialism as a solution. Perhaps they should compare how well people who were born in 1940 and then found themselves in socialist countries from 1945 on did. Or just ask a 70-80 year old eastern European.
vernAtWork
4.2 / 5 (10) Apr 25, 2017
The American Dream: "life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement" by James Truslow Adams, 1931.
He must have been a communist. Same with the guys who wrote:
"all men are created equal" with the right to "life, liberty and the pursuit of happiness."
What is crystal clear to anyone who has lived in the last 4 or 5 decades is that we are not living in that world, nor will we ever be. We certainly don't need statistics to make that clear.
krundoloss
2.3 / 5 (3) Apr 25, 2017
Could it be because that earlier generation was born near the end of a worldwide depression and grew up in the only industrial country that wasn't bombed into the stone age during WWII?"


Epic Point dan42, the data is trying to point to a decline, when it is more of a "lack of increase". I have never understood the concept of "why arent children making more than their parents". How could they? I mean, some of them can, but unless the money is coming from outside of the USA, not everyone will make more than their parents. I can tell you that I, my brother and sister all make more than our parents did, and we all went to community college (our parents went to universities), so the system must work if you apply yourself a little bit.
BobSage
3 / 5 (4) Apr 25, 2017
Given that the parents of 1984 were so much richer than those of 1940, wouldn't it be a lot harder for their kids to top their wealth? Just staying even, as apparently they are doing, would be quite a great outcome.
Captain Stumpy
4.6 / 5 (9) Apr 25, 2017
The absolute hatred of corporations has been taught for decades in our schools and this hatred induces them to leave. Now we are hungry and sitting out in the cold rain wondering where our jobs went.
what world do you live in?

the jobs are gone because business 101 - if you can outsource your job, created product, etc and pay less $$ while still retaining an adequate supply and or service for your demand, then why pay higher wages to locals?

the actions of *any* business must center around how to make money
period
full stop

it doesn't matter if it makes a product or provides a service
if a business can't make money, it does not stay in business

so when you can provide [x] cheaper (or with less overhead) then that is the way you must go in order to stay in business

most people are cheap bastards and won't pay local prices when they can get it cheaper by outsourcing, internet, etc
Zzzzzzzz
5 / 5 (7) Apr 25, 2017
"Evidence suggests that, to increase income mobility, policymakers should focus on raising middle-class and lower-income household incomes."

Our boy the fake prez Trump will be all over that......
MR166
1 / 5 (5) Apr 25, 2017
Capt. the American public view corporations as endless deep pockets. As a corporation, make the smallest error or fail , in hindsight, to take the smallest precaution and there will be 10s of lawyers lined up to sue you and an endless supply of ignorant jurists ready to rule for the "victims". Combine that with a government who can't wait to fine you for the smallest infraction among 100s of thousands of pages of regulations and you have the perfect formula for driving business offshore.
greenonions1
5 / 5 (7) Apr 25, 2017
Neoliberalism is a cruel and failed experiment. Lobbyists run the government and we all lose control of our lives. Medical costs spiral - to the enrichment of big pharma, and we find it harder and harder to keep our heads above water. The wealth divide is the ultimate shame. There are alternatives being explored. Google "A More Equitable Economy Exists Right Next Door" for one example. History will despise the cruelty of this failure.
Captain Stumpy
4.2 / 5 (5) Apr 25, 2017
Capt. the American public view corporations as endless deep pockets. As a corporation, make the smallest error or fail , in hindsight, to take the smallest precaution and there will be 10s of lawyers lined up to sue you and an endless supply of ignorant jurists ready to rule for the "victims". Combine that with a government who can't wait to fine you for the smallest infraction among 100s of thousands of pages of regulations and you have the perfect formula for driving business offshore.
this is your opinion
where is the data that backs up your belief?
here are some sites you can look for actual numbers if you like
https://www.sba.g...atistics

http://www.cs.umd...ats3.htm

https://fedstats....usa.gov/

business 101 bottom line = make a profit
everything else is irrelevant, really

MR166
1 / 5 (2) Apr 26, 2017
"this is your opinion"

Case in point, hold a cup of hot coffee in you lap while driving and get millions from McDonald's!

Drive with under inflated tires and get millions from Ford when they fail.

My step ladder has a folding paint tray on it that says "This is not a step". Why do you think they had to do that?
MR166
1 / 5 (1) Apr 26, 2017
Onions you and I finally agree. The problem is that the crony capitalism fostered by our big government drives out smaller businesses and strengthens the rich and well connected ones. BTW employee owned businesses and cooperatives are nothing new in the US. They have been around for years.
Captain Stumpy
4 / 5 (4) Apr 26, 2017
Case in point, hold a cup of hot coffee in you lap while driving and get millions from McDonald's!
obviously you don't know the details of that particular lawsuit... perhaps you should actually read up on it before using it as an example?
the lady didn't win the lawsuit because coffee is hot - she won because mcdonalds kept their coffee excessively hot, as in temperatures guaranteed to cause 3rd degree burns
https://www.ttla....aseFacts

now, i understand your frustration, but it is not because of the corporation, mind you - nor is it because of some perceived hatred of corps, etc...and it is especially not because of your above misinterpretations of the law or legal system (even with it's flaws, it serves a purpose)

it's because of the inherent stupidity of the average person
Captain Stumpy
4 / 5 (4) Apr 26, 2017
@mr166 cont'd
The problem is that the crony capitalism fostered by our big government drives out smaller businesses and strengthens the rich and well connected ones
this is stupid and it's not actually supported by evidence either

like i said - *all business* are in the business of making money
capitalism, by it's very nature, drives out smaller businesses unless they perform a necessary function with or in a specialised niche

again, business 101- if you're in the business of making money (which all businesses are) then the best way to make said money is to either eliminate (not always possible) or reduce the overhead to a minimal amount
and therein lies the problem of small business and losing the jobs that you're complaining about

it's not about "crony capitalism" so much as it's about the almighty dollar
as in: making money
gkam
2 / 5 (4) Apr 26, 2017
"Case in point, hold a cup of hot coffee in you lap while driving and get millions from McDonald's!"
-------------------------------------
No, you can't.

That judgement, like most of the others was thrown out on appeal.

Fox did not cover that part.
Captain Stumpy
4 / 5 (4) Apr 26, 2017
@STOLEN VALOR LIAR-kam
That judgement, like most of the others was thrown out on appeal
no, it was not thrown out on appeal
The jury awarded Liebeck $200,000 in compensatory damages -- reduced to $160,000 because the jury found her 20 percent at fault -- and $2.7 million in punitive damages for McDonald's callous conduct. (To put this in perspective, McDonald's revenue from coffee sales alone is in excess of $1.3 million a day.) The trial judge reduced the punitive damages to $480,000. Subsequently, the parties entered a post-verdict settlement.
https://www.ttla....aseFacts

the final amount settled by mcD's to Liebeck was confidential but still paid out by mcD's
Da Schneib
5 / 5 (4) Apr 26, 2017
I have never understood the concept of "why arent children making more than their parents". How could they?
It's called "technology," but in order to succeed you have to be educated, which means we all have to contribute tax money to education and stop telling kids not to trust science, which is where technology comes from.

Evolution deniers started this trend, and now there are climate deniers, cigarette disease deniers, leaded gasoline deniers, vaccine deniers, economics deniers, and a whole host of conspiracy theorists interfering with the education of our children for their own rapacious or idiotic goals interfering with the ability of kids to better their parents. All driven by agendas that have nothing to do with improving their chances to do better.

If we want kids to do better, we have to educate them. Sorry if they wind up telling you you're idiots. Get over it, or get used to being a permanent underclass.
greenonions1
5 / 5 (5) Apr 26, 2017
MR "Onions you and I finally agree." Well - I think we may agree - that despite the rhetoric - the U.S. is not too friendly to small business. I am not sure what frivolous law suits have to do with that issue. Today's article was about lack of economic mobility. Studies have shown that there is very little economic mobility in the U.S. I totally agree with Da Schneib - that having a world class education system would be significant in improving that mobility. The current dismal situation seems to be very deliberate. Corporations spend billions on lobbying - to keep the laws favoring their industry - and the overall environment favors big business profits - and squeezes working people. Ponder this - the median income for a family of 4 - is around $55,000. In the U.S. - we spend on average - $10,000 per person per year on health care. Those numbers speak for themselves.
BubbaNicholson
1 / 5 (1) Apr 27, 2017
The reason is that we no longer receive interest on savings accounts.
barakn
5 / 5 (4) Apr 28, 2017
Upward mobility has fallen sharply in US: study


Obamanation.

It started with Reagan, but thanks for playing.
Cusco
5 / 5 (3) Apr 30, 2017
Real wages have fallen for four decades, this shouldn't be a surprise to anyone. At the same time productivity per employee has more than doubled. In a sane world the increase in productivity would mean more money for the producers, but instead 80+ percent of the gains have gone to the upper 3-5 percent of the wealth holders in the US.

In the 1950s corporate taxes accounted for 33% of federal revenue, today it's 9%. The tax rate for the top earners was 84%, inheritance tax on the largest estates was >80%. Tariffs kept the industry in the US, and unions made sure the jobs were safe and paid well. Society advanced by leaps and bounds.

Since Reagan we've seen unions decimated, tariffs repealed, corporate taxes rolled back, taxes on the upper incomes slashed, and wages for the vast majority stagnate and then decline. Of course upward mobility has declined.
Da Schneib
5 / 5 (1) Apr 30, 2017
Upward mobility has fallen sharply in US: study


Obamanation.

It started with Reagan, but thanks for playing.
Yep. See "savings and loan crisis." The Reprehensibles wouldn't let anyone make it illegal and we've been paying ever since. The repeal of Glass-Steagall followed by the housing crisis made it all clear for anyone who was paying attention.
sascoflame
not rated yet Apr 30, 2017
We live in a time of record profits where more wealth goes to the rich than ever before and because they rich own all the media outlets people think that they live in a Stalinist dictatorship where private property has been eliminated.

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