Posted on 04/26/2006 3:47:22 PM PDT by nicollo
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.
All Bull from Al Bull!
The top five percent in other nations is the poverty level in the US.
This Commie sock puppet can bite my kumquats.
Being poor in Detroit isn't anything close to being poor in Eritrea.
Yeah, so? Doesn't mean a child born to a low income family won't SOMEDAY be rich. It just means it's more difficult. Life is tough; get over it.
Actually the American dream was never about amassing great wealth. It's about earning an honest living, buying a home and raising a family while being left alone.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Two out of three ain't bad but I think you can forget about that last one. Being left alone is the impossible dream these days.
Nonsense. Ask any German who is familiar with both countries how hard it is to start a company in Germany as compared with starting one in the United States. Besides, the Germans now have to deal with an immigrant class that does not know how to create wealth at all, and they are becoming more numerous every year.
One panic or slump followed twenty years later by another looks to be average -- even above average. I guess the question is whether the deflation was something catastrophic, or whether it was something moderate and manageable, like inflation today. You might want to look into the question more deeply, but it looks clear enough that deflation didn't preclude real economic growth or rising living standards in the late 19th century. But of course, the deflation did hurt debtors -- above all farmers -- just as hyperinflation has hurt creditors.
What makes societies like the US different from those like Denmark is ethnic diversity. A large part of the lowest quintile here is composed of recent immigrants -- even illegals. Their children will have better lives than their parents, but it's less likely in a heterogeneous society that many of them could jump into the top quintile in a generation than in a homogeneous society -- and the Scandinavian have long been very homogeneous. There's a little more inertia than might exist in a less diverse society. Great mobility does happen here though.
Bull shitsalot.
Unless you're a 7'4" center, a foul-mouthed rapper with more guns than the other rappers, or a crooked politician ...then upward mobility is pretty well assured.
UUHHHH the Dutch are from Holland the last time I check with my Dutch wife and inlaws. lol
No more geography classes in publik skools for you!
BUMP
Once again, it is hard to believe how idiotic this piece is, and how clear it is that it is agenda-drivwen, rather than truth-seeking.
The key to making this kind of system work, as any casino owner or producer of American Idol knows, is the Lotto principle: the rare and quite arbitrary, but sensational, payoff to some schmo who is duly lifted into the clouds of pop-cult divinity as a sign to the masses. Such elevations become legendary, word of mouth spreads, the faithful's faith is renewed, and quarters keep clinking into the slot machines. For it is a well-known fact that sooner or later everyone wins the lottery, becomes famous on television, and gets to sleep with Brad Pitt and/or J-Lo — or, if not everyone, at least me, me, me. It is merely a matter of time and persistence; my ship is just over the horizon, like that aircraft carrier Bush landed on. More
Any news item or story in any way critical of the United States or citing a source which places the country not at the top in any statistical category is 95% guaranteed to provoke knee-jerk, cliche ridden, lame reactions on freerepublic.com.
knee-jerk, cliche ridden, lame reactions on freerepublic.comHow about some truth, then. Have you anything to refute what has been on this thread? Do you support the thesis of this article and the report on which it was based? Do you believe that there is greater economic mobility in Denmark than in the U.S., or do you believe the Freepers that Denmark's lack of economic diversity is sickly compared to the great heights of American potential? Would you compare valleys to hills or to mountains?
Freepers are not "knee jerk" America-firsters. If anything, they are "knee jerk" anti-America haters, but I wouldn't even characterize them as such. They stand up for their nation, for their ideals, and for their first principles, and they loathe the leftist fools who abandon those principles at the slightest scent of socialist perfume.
Go ahead: say something substantive. Otherwise, you've merely reacted, and added nothing.
"cognitive constipation"---I like that phrase. I guess that's what happens sometimes when one ingests too much "cognitive dissonance"---or too little.....or something. But anyway, good points all 'round!
Very funny! Over some discussion the other night, a friend spilled out, "I'm sick of the counter-intuitive. Why can't things just be as they appear?"
Just ran across a column in March's Atlantic Monthly, by Clive Crook, Capitalism: The Movie (subsription required for full article) in which the author laments that many people who believe in individual freedoms (aka, liberals like himself) haven't a clue about economic freedoms. While Crook misreads, indeed rather misleads about, what he calls "right-of-center," his point is important: most Americans, and led by popular culture, especially the movies, are economic retards. He gives the example of the perestroika-era Soviet official who visited a vegetable market in London and asked how they set prices. When told the market set its prices he laughed, saying he knew that was the official line, but really, who set the prices?
I agree, all too many Americans couldn't figure that out, either. Crook also points out that university economics classes have become too quantitative, too esoteric and have distanced the discipline from the public mind. Unfortunately, Crook also believes that taxes should remain high, that health-care should be socialized, and that government market regulations are good. Talk about cognitive dissonance!
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