The ability of Americans to move up (or down) the economic ladder hasn't gone down in recent years, as feared. Instead, it's been pretty much just as hard as ever for the last two decades.
A comprehensive analysis of various sets of economic data undertaken by professors from Harvard and and Berkeley offers the sort-of good news. While inequality is increasing, mobility between economic groups has remained about the same in the United States — although that varies dramatically by region. The group offers the analogy at right: The rungs of the ladder are getting far apart, but moving between them is just as easy.
Or, if you will, just as difficult. The New York Times summarizes the findings.
The study found, for instance, that about 8 percent of children born in the early 1980s who grew up in families in the bottom fifth of the income distribution managed to reach the top fifth for their age group today. The rate was nearly identical for children born a decade earlier. …
Today, the odds of escaping poverty appear to be only about half as high in the United States as in the most mobile countries like Denmark, Mr. Saez said.
The way the study calculated that mobility involves data on income and college enrollment from the IRS and other sources. Given that the goal is to judge changes in status over an extended period of time, the dataset is necessarily limited. What the researchers did is compare a person's income bracket (or quintile, representing which fifth of the income spread they occupy) at the age of 26, then comparing that to their parents' income quintile. For people who turned 26 in each year from 1997 to 2008 and who are in the top quintile of income for that age, their parents' status looks like the graph below.(Don't worry, it's explained below.)
The red section of that graph is 26-year-olds who are in the top fifth of incomes for 26-year-olds whose parents were in the bottom fifth for incomes. It varies from about 8 to 12 percent over the years. The yellow section is people with parents in the second-lowest bracket, and so on up the graph until you get to the dark green section — people whose parents were also in the top-income quintile. It ranges from about 23 to 26 percent. Over the 12 years presented, those values didn't fluctuate very much.
If we break out the most recent data, the composition of that top quintile becomes easier to see.
Notice that this top income quintile starts in the $60,000 to $65,000 range, according to Emmanuel Saez, one of the report's authors, who answered some questions by email. For a 26-year-old, making over $60,000 puts you in the top income fifth for that age group. It begs the question, of course, of how that data changes as people age further and over longer time periods, but the findings as presented show general stability.
Slate's Matt Yglesias takes the pessimistic view of this data, writing that even in places where social mobility is praised, its still fairly rare. The report's authors make clear that location is important in the ability of people to move up or down that social ladder. The map at left shows the massive variance in mobility by location in the United States. (If you want to explore this further, The Washington Post has an interactive tool to do so.) Even in the most socially mobile place, San Jose, California, the odds that you'd move from the bottom quintile to the top quintile are only 12.9 percent. In the least mobile place, Charlotte, the odds are only 4.4 percent.
The Times points out that the idea of a fairly stable social mobility opportunity runs counter to current political rhetoric. It's a simple tweak, however, for politicians that want to make a point on mobility, the theoretical opportunity in our Land of Opportunity: It's not getting harder to become one of the rich, but it's also not getting any easier.