American Exceptionalism #238: Opportunity (Not)
I don’t usually link to Paul Krugman because he everyone reads him anyway, right? He doesn’t need my google juice.
But I have to make an exception here because he adds to my trove of graphs demonstrating how America today — after thirty years of Reaganomics policies that were supposed to be all about freedom, liberty, and economic opportunity for all (yeah, and I have a bridge for sale), is at the bottom of the heap when it comes to economic opportunity.
The shining city on the hill keeps getting smaller and richer, and the slopes leading up to it steeper, rougher, and slicker.
That opportunity is best displayed through intergenerational mobility — what my friend Steve calls “convection.” What are the odds that a child will be in a different economic stratum from his parents? It’s a darned good measure of “meritocracy.”
Here’s the key graphic:
On the vertical axis is the intergenerational elasticity of income — how much a 1 percent rise in your father’s income affects your expected income; the higher this number, the lower is social mobility.
As you can see, it’s only getting worse. My explanation is here.
The Great Gatsby Curve – NYTimes.com.
Cross-posted at Asymptosis.
In my family we all transitioned from our parents’ youthful grinding povery into the middle-middle class. That was a big leap, as the middle class was not accessible to them until later in life.
If our kids stay middle-middle class I hardly see that as a defeat.If they slip that would be a defeat.
So perhaps we need to feed that into the model.
str,
I suspect the number of Americans doing worse than their parents, even after they’ve essentially followed what appeared to be their end of the social contract, is pretty large.
Both my parents worked outside the home when I was growing up. This was in the 50’s, long before any serious thoughts of women’s rights, equal pay, or any of that progressive stuff. In stark contrast, I raised my kids (born in ’70 and ’72) on one income.
Now, in three out of the four next generation families in our clan, both parents work. This is out of necessity, not because there work place is now better for women. (Though, in some senses, it certainly is better.) Now, many two income families are underwater in their mortgages, through no fault of their own.
Rethugs are hard at it to remove all the social safety nets that were there for me if I needed them.
The middle class is being destroyed. It might be as slow as erosion, but it is still real.
This is defeat, rusty.
JzB
JzB,
Where is this middle class being destroyed? Detroit, the rust belt. Yep I watched that when I grew up, as the Dem party and Dem city machines destroyed one of the most productive areas on the planet. Go watch the movies of the ’50s. All the best and brightest were talking about heading to Detroit or Buffalo or Akron or Cleveland. Now they flee from there.
And go to Atlanta, Dallas, Houston,Tampa, etc. How many car plants have opened in Michigan, Ohio, Indiana, or Illinois vs anywhere south of the Mason-Dixon line? And these were the policies of the Dems. Heck even Boeing wanted to get out of Washington and move a plant elsewhere.
As for raising kids. I’m raising three on 1 paycheck. Very easy to do down here (DFW). Where is this middle class being destroyed?
As for social safety nets. Every change to Social Security since ’92 has been at the behest of a Dem President. Bush Sr got no-where with his attempt. But he did add another layer to the health-care entitlement. Welfare reform? Clinton. Extension of unemployment over multiple time – now 99 months – bipartisan supported and signed into law by Obama. ETIC up.
There is more safety nets out there than you can shake a stick at. Chapter 7 & 11 are still there and debtor prison (except for men not paying child-support) doesn’t exist.
You get through almost any state school in the US for under $20K and if your a outstanding student you can even get through Harvard free! Plenty of oppurtunity to move up or at least solidly in the middle class. That does not mean living in a $1M condo in NYC.
(BTW, living in expensive coastal cities is a luxery good – you don’t have to live there, you’ve made a decision to)
And I agree with Rusty. If you stay in the middle class, what’s wrong with that?
(BTW are the class differences in the chart the same? ie if I make say $70K I’m in the same class in each country, or are they set up to reflect the fact that some countries $70K makes you a pauper and others in middle class?)
Islam will change
Nice collection of anecdotes, buff.
I’m not going to defend Demorats who execute Rethug policies.
If you don’t beieve the Rethugs are out to eliminate SS and Medicare, then you havent been paying attention, and there probbly is no data that will convince you.
If you believe there is plenty of mobility in American society, in spite of all the evidence to the contrary, then there is no data that will convince you.
There is nothing wrong with staying in the middle class. That is very much not the point.
Cheers!
JzB
Lack of mobility plus increasing capture by the richest = eroding standard of living for everybody else.
http://lanekenworthy.net/2011/03/08/inequality-and-mobility-at-the-top/
Just facts and data.
JzB
Some people never get out of their neighborhood. There are plenty of abandoned little towns and villages down south. The statistics don’t look so good either. The corporations moved south for cheap labor, from there they move to China where labor is even cheaper. States and the labor force are being played out against each other. They take tax payer subsidies, milk the labor force as long as it is cheap and than move on, leaving a mess behind.
Buff, I remember you have more than one paycheck too, you do have a military retirement and family health insurance.
JzB,
What anecdotes? Other than the one about me raising my kids on 1 paycheck what did I say that isn’t fact?
Well its been the statist Dems that you support who have done all the damage to SS. It was Obama’s own signature bill that cut $500M from Medicare. Yet you call the Reps ‘Rethugs’? Not very professional and tends to get people to beleive your not serious (well except for the choir).
What am I suppossed to learn from this? Seriously. (Using constant dollars) If I make $20K more than I did 10 years ago my mobility has gone up even if relatively to the Jones (who say went up by $40K) has dropped. My finances are better. To say I dropped is nonesense.
Similarly have you kept the brackets the same in constant dollars? If middle class was $40-$60K (say 3rd quintile) it still right there now. Just because the top end went from $10M to $1B doesn’t change if I’m in the middle class – I’m still there. If you say to be ‘middle class’ I need $100-200K since the top end went up – you are really going to see the middle class get smaller.
What you seem to be advocating is comparitive (within) each country and constantly changing definitions of what is middle class or poor. Under your paradigm we can NEVER win the war on poverty since we will always have a bottom 20%.
And lastly, If your advocating something outside the R or D mainstream, well by definition your in the fring (not has far out as ilsm, but going that way).
Islam will change
JzB,
Maybe I’m missing something but I would bet the bottom 20% right now have a much better standard of living than they did during the Carter years or LBJ or FDR. By any measure you want.
Your argument is that if I don’t keep up with the Jones my standard of living goes down. Relative vs. actual living standards. We never when the war on poverty even when we have an obesity epidemic in the poor and they all carry cell phones.
Islam will change
Lys,
My family has lived on 1 paycheck since the first child. I watched my entire AF career enlisted families live at poverty levels and make it (with kids). It can be done. No ones been promised a cakewalk. (Spend 20 years in uniform and you too can get military retirement if you live).
As for abandon towns. Forget the small towns in the south. Look at Detroit. Once the heart of the US industrial might. Now a burnt out shell. That city and state have been run by the Unions and Dems for decades….
Islam will change
Buff, I have seen poverty or low living standards of low ranking enlisted people too. But they did have health care, not as good as it should have been, they also expected to rise in rank and earn more and they could be relative certain to have a minimum amount of income. Jr. ranks did qualify for foodstamps too, I don’t know if that is still the case. They made it with kids, yes, but not all, there were plenty of family problems caused by poverty too. Still, they did have a floor under them and the military did offer the chance to move up, like getting more education. And you know, that helped many but not everyone. Dysfuntional families have a hard time and poverty is nohelp.
buff –
You are missing a lot. Don’t make that bet. You’ll lose. Under LBJ poverty dropped dramatically. Under Reagam/Bush I it rose. Under Clinton it dropped. Under Bush II it rose. Almost all of what the great society accomplished has been undone – by Rethugs.
Tell you what, though. Make a strong case that the bottom 20% has a better standard of living now than in 1975, and I’ll give you the first ever guest post on my blog. You might start with the % of the population at or near the poverty level.
Here – I’ve even done some of the ground work for you.
http://jazzbumpa.blogspot.com/2010/09/poverty.html
http://jazzbumpa.blogspot.com/2009/09/republicans-all-wrong-all-time-pt-4.html
Obesity is about poor nutrition, not eating like a king. And if owning a cell phone is the best you can do, you have a long, uphill climb.
Cheers!
JzB
When you’re done, write me jazzbumpa@gmail.com.
buff,
Anecdotes, what do you call misleading statements with no completeness?
Lots of opinions.
When you say you raised your kids on one pay check you should elaborate it was Air Force officer pay grade with pilot’s flight pay, post all the great raised that the “all volunteer force” enabled.
You should elaborate the increasing size of your flight pay as you rose in rank and received it while you were off at school getting a mnasters’ degree with salary and allowances and all school related costs paid by the taxpayer.
You should elaborate on your tax free housing allowance, as well as your tax free subsistence allowance and that you paid tax deductible mortgages with you housing allowance which was not taxed.
You should also observe, to scrupulously avoid “anecdoting” that when you made Captain at age 26 if at the same age I did that your “base pay” without scaled to your rank flight pay, and tax free allownaces was (all componenets) larger than the highest enlisted pay scale at 30 years.
Your second pay check, after your percentage of base pay with TRICARE, is using your “skills and special talents” in a position in Lockheed in another socialized organization which is coddled by the US government and cannot do the job.
Anecdoting and all.
buff,
Anecdotes, what do you call misleading statements with no completeness?
Lots of opinions.
When you say you raised your kids on one pay check you should elaborate it was Air Force officer pay grade with pilot’s flight pay, post all the great raised that the “all volunteer force” enabled.
You should elaborate the increasing size of your flight pay as you rose in rank and received it while you were off at school getting a mnasters’ degree with salary and allowances and all school related costs paid by the taxpayer.
You should elaborate on your tax free housing allowance, as well as your tax free subsistence allowance and that you paid tax deductible mortgages with you housing allowance which was not taxed.
You should also observe, to scrupulously avoid “anecdoting” that when you made Captain at age 26 if at the same age I did that your “base pay” without scaled to your rank flight pay, and tax free allownaces was (all componenets) larger than the highest enlisted pay scale at 30 years.
Your second pay check, after your percentage of base pay with TRICARE, is using your “skills and special talents” in a position in Lockheed in another socialized organization which is coddled by the US government and cannot do the job.
Anecdoting and all.
buff,
“As for raising kids. I’m raising three on 1 paycheck. Very easy to do down here (DFW). Where is this middle class being destroyed?”
Did Lockheed lay you off or don’t you count your Air Force officer’s retired pension a paycheck?
buff,
Trolling you is too easy!
“Anecdotes”, what do you call misleading statements with no completeness?
Lots of opinions.
When you say you raised your 3 kids on one pay check you should elaborate it was Air Force officer pay rates with pilot’s flight pay, post all the great raises that the “all volunteer force” enabled.
You should elaborate the increasing size of your flight pay as you rose in rank and received it while you were off at school getting a masters’ degree with salary and allowances and all school related costs paid by the taxpayer.
You should elaborate on your tax free housing allowance, as well as your tax free subsistence allowance and that you paid tax deductible mortgages with your housing allowance which was not taxed.
You should also observe, to scrupulously avoid “anecdoting”, that when you made Captain at age 26 [if at the same age I did] that your “base pay” scaled to your rank flight pay, and tax free allownaces were (all componenets) larger than the highest enlisted pay scales at 30 years.
Your second pay check, after your pension based on percentage of base pay with TRICARE, is using your “skills and special talents” in a position in Lockheed another socialized organization which is coddled by the US government and cannot do the job.
Anecdoting.
JzB,
I would love to take you up on that. So give me a few days to mull it over.
My point is the definition of pverty changes almost yearly. Its definitely not the same today as it was under Carter or LBJ or FDR. (And it was deferent under each from the other also).
I would start with the definition of poverty in 1975 and apply that same definition to today. What I would not do is use differing definitions of poverty. Do you really belive we have the same (or greater) percentage of the population in poverty under LBJ or FDR using that time frames definition as we do today? Not 1975, but the contrast is more obvious.
Otherwise you can NEVER win the war on poverty since we will always have a bottom 20%. You must fix the definition of poverty to see how your doing.
Obesity is a factor of widely available cheap food. Something the poor in 1935 under FDR wish they had access to.
The cell phone is a point about luxeries are available and the poor are not if you can afford them. An anedote. My kids go to a minority-majority HS. Great place. Best public school in the metroplex. 50% of the kids get subsidized meals (which is a great idea) and they serve breakfast also (another great idea). So we have lots of technically ‘poor’. But by a 1935 or 1955 or 1965 definition of ‘poor’ probably only a handful would actually be ‘poor.’ And I rarely see a kid without one.
And BTW, your first link above clearly shows a large drop in poverty under Reagan which you forget to mention. But then we would once again get back to Mike’s original idea that the US President controls the economy…which I disagree with.
Islam will change
Buff, the industrial towns like Detroit happened to be in the north and not in the south, that is why it has not happened in the south yet. Besides the plants down south are relatively small employing maybe one thousand people and robots to build cars. When the time comes industry will pick up and leave for greener grass, leaving the towns, big or small, behind to rot just like Flint and Detroit and all the others.
A bunch of small decaying towns and villages are as bad as one big city. Texas has lots of them, many buildings boarded and abandoned and some still in use in the middle of all the decay. Nothing nice to look at.
Lys,
Maybe its my growing up near Akron, but I expect everyone to move up as the get older, increase their skills and experience. Enlisted/Officer ranks are no different. yes, Jr ranks did get Food Stamps and the health care is free (consider it part of your compensation like any workplace).
What I have a problem with is the idea that you should get more pay for senority when that senority doesn’t mean you are more productive or skilled. Basically if your making burgers at McD you should be getting the same pay, reguardless of age or how long you’ve worked there, as my 18 year old son since the required skill set is the same (none). Sorry, maybe that makes me evil.
And I’ve told my kids how to avoid poverty if you start with zero. Its a simple formula easily followed.
1) Get a HS diploma and the highest grades you can. 2) Avoid the law (no drugs etc), 3) Don’t get pregnant or get someone pregnant until your married 4) Don’t marry until your 25. 5) Live well under you means
You do that and you may not end up the next Buffet, but you won’t be in poverty. Its unbeleiveable how many people can’t seem to do even that. Yes, dysfunctional families don’t make it easier.
Islam will change
Buff, the king of France and his wife, Marie Antoinett had to use chamber potts, and they used horses because they had no car and the poor things had no cell phone either, personel hygiene was a problem too. Would you say they were poor?
Buff, I would think your kids have a stable family life, that alone is worth a lot. They have food and shelter and attend suburban schools, not inner city schools.
Would you say children living in homeless shelters have the same starting point as your children, what if they do have mental and/or other health problems? Do low income working couples have good affordable day care? Do you believe early childhood development is important?
Welfare, including shelter, food stamps, medicaid is supposed to help providing a better start for poor children. Yes, taxes from people who can afford it, could help. To all people like Romney who want even lower taxes for himself, stop crying, life is not fair, live with it.
Lys,
My kids go to an inner city school. I don’t live in the burbs…
I am all in favor of the help we give to the poor. We are a rich country and should have a safety net. I’m in favor of SS and long ago was swayed by Bruce and coberly’s arguments (and I have convinced many other ‘SS is doomed’ to that position). I beleive that childhood development is important also. We need to help dysfunctional families get their act together when they ask for help.
My issue here is how you define poor in the data set. Bottom line if you were not poor under LBJ, and now are in the same position then you are still not poor. Its meaningless to compare apples to space shuttles – something which this graph does. Its meaningless. Then you double down and compare across countries where the countries don’t have the same definitions. If ‘poor ‘ means making under $20K for a family of 4. Then that has to be the line in each country for meaningful comparison. The graph shown does not do it. It shows movement internally within each country and then tries to compare different metrics between countries. Its a good example of lieing with stats.
The second issue is that people should not expect to move up just becuase you got older. Unless you improved your skills and capability you stay right where you are. A perfect example is the enlisted ranks. They move up when they demonstrate that they have acquired the necessary skills for the next rank. If not, they don’t.
Lastly – I agree, life isn’t fair.
Islam will change
buff,
“I agree, life isn’t fair.”
Unless you need to keep the dividends flowing from Boeing.
“They move up when they demonstrate that they have acquired the necessary skills for the next rank. If not, they don’t.”
Why is the F-35 going to Florida, it has not demonstrated any thing more than DOT&E saying it has at least 13 major failings?
If the same standards were applied to weapons development…………..
The “health” of war profiteering would be done.
Before you change islam pull the plank from your eye.
Nope – the equivelent today for the horse – cars. Chamber pots – indoor plumbing, cell phones – not sure – maybe an army of couriers at their beck and call.(?).
My point stands. At what level will we say your out of poverty? Or will we always just define poverty as the bottom 20%? By FDR standards I bet we have less than 1% poor in the US. By LBJ standards less than 5%, if not lower. By world standards we have zero poverty in the US.(the extreame)
Also by FDR standards I would be living in the top 10-5% instead of the 60-80% quintile. Even discounting technology change. Buffet lives a life that even King Louis could only dream of, heck anyone with a net worth over $50M is probably richer than the headless King. About the only thing the King can do that Buffet couldn’t is start a war or have people shot. (and I’m not so sure Buffet is actually limited…)
Comes to my point. At what point is poverty gone? Or is it all relative so we will always have the poor who are dependant on government handouts to maintain their mansion and 4 cars? This is a recipe for never ending government beuacracies.
Islam will change
Lys – if your still here:
From teh Atlantic referenceing someone else, but its exactly why this chart is meaningless:
As the Jason DeParle article states:
The income compression in rival countries may also make them seem more mobile. Reihan Salam, a writer for The Daily and National Review Online, has calculated that a Danish family can move from the 10th percentile to the 90th percentile with $45,000 of additional earnings, while an American family would need an additional $93,000.
The comparison on Steve’s chart is apples to space shuttles. Meaningless..
Islam will change
Buff, you too had longevity increases in the military. Employers pay it out of loyalty to longterm employees, it is much better than lots of turnover. In that sense it makes good business sense. Poor here is different than poor in Somalia. But we do live in a wealthy society, highly industrialized and we do have an issue with inequality of wealth distribution, FAIRER distribution. Fair wages is good economics, it is bad if wealth accumulates at the top and work at the bottom is underpaid, unfair works both ways, it is not fair to overpay at the top and underpay at the bottom.
The kind of society we have tends to tear families apart, they live far from each other, not near enough to provide support when needed the way families would do. Low income people suffer more, they have no time and money to visit even if they have jobs. Many have no paid leave at all.
I see nothing wrong in subsidizing low wage earners withfood stamps, health care, housing and heating expenses. It is basically subsidizing low wages. Many people who now lose jobs, become homeless will not be able to get up on their feet again. How long can homeless people keep it up? If you were homeless without much or no hope would you stay sober?
We are wealthy enough to keep the poor in shelter and with food and health care, with a minimum of living, we don’t provide the minimum of existence. The top 1% are vultures, it is not too much to ask them to pay taxes. I feel sorry for the people who have nothing, not the gluttons at the top. Life is not fair, but more so for some than others.
Buff, our problem is the much greater income inequalty. If we would really work for more just wages, more economical fairness and justice, we would be much better off. We can’t, because we call it socialism, we would never bother to ask if it is good.
Buff, I will never understand the greedy bastards at the top, why they never get enough even while they are choking.
Lys,
My ‘longevity’ increases were there to keep up with inflation. Otherwise I would have taken a pay cut. Otherwise you only got a pay raise on promotion or when teh government decided to do blaket raises to keep military pay in line with civilian (happened early in my career).
BUt otherwise I really have no problem with what you wrote. I beleive we are rich enough to provide handouts to people who need them. I don’t want the US to look like India were people starve in the streets. My problem with the post is that the data is meaningless. If your definition of poverty is always relational vs. absolute you can never end it. Then add the ‘lie-with-stats’ chart that is meaningless and you get a deranged post.
Pick a metric that defines poor that is measurable. Just saying “the bottom 20%” means we will always have poor. You can never end poverty. At some point you are no longer poor even if your in the bottom quintile.
As for the vultures – ask Soro’s and Buffet about that. I’m not one of them.
Islam will change