On Tuesday, November 13, 2007 the Economic Mobility Project released a set of three new reports on the economic mobility of families (The reports can be found here: http://www.economicmobility.org/). "Doing better" than one's parents has long been a key element of the American Dream. The results of the project have some very disquieting aspects. Fully 2/3's of the families are treading water financially or are not maintaining the same buying power enjoyed by their parents. Welcome to George W. Bush's America. Here are some highlights:
Contrary to American beliefs about equality of opportunity, a child’s economic position is heavily influenced by that of his or her parents.
* Forty-two percent of children born to parents in the bottom fifth of the income distribution remain in the bottom, while 39 percent born to parents in the top fifth remain at the top.
* Children of middle-income parents have a near-equal likelihood of ending up in any other quintile, presenting equal promise and peril for those born to middle-class parents.
* The “rags to riches” story is much more common in Hollywood than on Main Street. Only 6 percent of children born to parents with family income at the very bottom move to the very top.
Americans have higher incomes than a prior generation, but that does not necessarily mean they are moving up the economic ladder compared to their parents or to other families. Only one third are what the report calls “upwardly mobile.” Another one third is “downwardly mobile.”
The report classifies Americans into the following four categories, based on their change in income levels and their movement across five equal sized income groups (or quintiles) that range from bottom to top of the income distribution:
“Upwardly mobile”—One third (34 percent) of Americans are “upwardly mobile,” surpassing their parents’ income and their parents’ economic ranking (by one or more quintiles). This means that of the 67 percent of families who make more money than their parents, only half move ahead enough to place them in a new position on the income ladder.
“Riding the tide”—About one quarter (27 percent) are “riding the tide”, making more than their parents’, but remaining in the same economic position as their parents.
“Falling despite the tide”—A small group of individuals (5 percent) surpass their parents’ income, yet fall behind their parents in economic standing, and are “falling despite the tide.”
“Downwardly mobile”—Another third of Americans (33 percent) are “downwardly mobile,” faking less than their parents and failing to rise above their parents’ economic position.
* Forty-two percent of children born to parents in the bottom fifth of the income distribution remain in the bottom, while 39 percent born to parents in the top fifth remain at the top.
* Children of middle-income parents have a near-equal likelihood of ending up in any other quintile, presenting equal promise and peril for those born to middle-class parents.
* The “rags to riches” story is much more common in Hollywood than on Main Street. Only 6 percent of children born to parents with family income at the very bottom move to the very top.
Americans have higher incomes than a prior generation, but that does not necessarily mean they are moving up the economic ladder compared to their parents or to other families. Only one third are what the report calls “upwardly mobile.” Another one third is “downwardly mobile.”
The report classifies Americans into the following four categories, based on their change in income levels and their movement across five equal sized income groups (or quintiles) that range from bottom to top of the income distribution:
“Upwardly mobile”—One third (34 percent) of Americans are “upwardly mobile,” surpassing their parents’ income and their parents’ economic ranking (by one or more quintiles). This means that of the 67 percent of families who make more money than their parents, only half move ahead enough to place them in a new position on the income ladder.
“Riding the tide”—About one quarter (27 percent) are “riding the tide”, making more than their parents’, but remaining in the same economic position as their parents.
“Falling despite the tide”—A small group of individuals (5 percent) surpass their parents’ income, yet fall behind their parents in economic standing, and are “falling despite the tide.”
“Downwardly mobile”—Another third of Americans (33 percent) are “downwardly mobile,” faking less than their parents and failing to rise above their parents’ economic position.
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