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The American "Rags To Riches" Dream Is Now History For Most

Tyler Durden's picture





 

It would appear that the Horatio Alger myth - that hard work and pluck will lift a person from dire circumstances to enviable success - is not living up to expectations for Americans. As WSJ's Lauren Weber notes, 40% of Americans think it’s fairly common for someone to start off poor, work hard and eventually rise to the top of the economic heap but a new Pew study shows that in reality, only 4% of Americans travel the rags-to-riches path. Unfortunately, they discovered considerable “stickiness” at both ends of the income spectrum and that Americans attached to the rags-to-riches myth might be disappointed to know that other countries show greater mobility among have-nots - "this is what we call the 'parental penalty,' and it's really high in the U.S. - If you’re born in the bottom here, your likelihood of sticking in the bottom is much higher."

 

Via WSJ,

...only 4% of Americans travel the rags-to-riches path, according to new research from the Economic Mobility Project of the Pew Charitable Trusts.

 

...a great many  who are born into the poorest segments of the population are stuck there for life, a finding that suggests the U.S. has much to do to improve social mobility.

 

Forty-three percent of Americans raised in the bottom quintile of household income remain there a generation later (with income of less than $28,900 in 2009 dollars, adjusted for family size). Twenty-seven percent rise up slightly into the second quintile, 17% land in the middle of the distribution, and 9% end up in the 4th quintile.

 

...

 

Fed researchers looked at mobility for all Americans. They discovered considerable “stickiness” at both ends of the income spectrum. In other words, poor or wealthy children are most likely to stay in their respective wealth brackets as adults.

 

...

 

In a birthright economy – think India’s old caste system – 100% of individuals would remain in the economic category they’re born into. In an ‘equal chance’ economy, socioeconomic status would change in a random but predictable way, with 20% of people staying where they are and 20% moving into each of the other categories (imagine a lottery machine where 100 balls pop around a tank and 20 are randomly funneled into each of five different baskets).

 

...

 

But Americans attached to the rags-to-riches myth might be disappointed to know that other countries show greater mobility among have-nots.

 

In Sweden, Finland, Norway, Denmark and the United Kingdom, between 25% and 30% of people stay in the bottom quintile, according to Daly, compared to the 44% in the U.S.

 

This is what we call the ‘parental penalty,’ and it’s really high in the U.S.,” she said. “If you’re born in the bottom here, your likelihood of sticking in the bottom is much higher.”

 

...

 

and while there is plenty to worry about there, the last paragraph of Weber's note is perhaps the most worrisome in terms of the Fed's current policies...

Americans who moved up from the bottom had at least nine times more wealth than those who were stuck — $8,892 for people with no upward mobility versus $78,005 for people who moved one rung up and $94,586 for those who made it at least to the middle.

 

Especially in a nation where work is increasingly punished...

As quantitied, and explained by Alexander, "the single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045."

 

 

We realize that this is a painful topic in a country in which the issue of welfare benefits, and cutting (or not) the spending side of the fiscal cliff, have become the two most sensitive social topics. Alas, none of that changes the matrix of incentives for most Americans who find themselves in a comparable situation: either being on the left side of minimum US wage, and relying on benefits, or move to the right side at far greater personal investment of work, and energy, and... have the same disposable income at the end of the day.

 


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Mon, 11/11/2013 - 20:40 | Link to Comment A Lunatic
A Lunatic's picture

I'm going to pull myself up by my bootstraps just as soon a I can get my boots out of pawn.......

Mon, 11/11/2013 - 20:54 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

I'm right behind you....just as soon as I remove the Fed's boot from my arse.

<At least I hope it's the Fed's boot back there.>

Mon, 11/11/2013 - 21:07 | Link to Comment Mike Hunt Hurts
Mike Hunt Hurts's picture

If I stay at $0 income than my "return" is at maximum.

Cool, I'm going to tell my boss to fuck off and start getting free shit full time.

Thanks for heping me to be more "productive" with my time.

Mon, 11/11/2013 - 21:12 | Link to Comment johnQpublic
johnQpublic's picture

simple high school level sociology at play

Mon, 11/11/2013 - 21:19 | Link to Comment CH1
CH1's picture

All surplus is skimmed away, all the time.

What other result would we expect?

Mon, 11/11/2013 - 21:36 | Link to Comment akak
akak's picture

If you like your rags (or even if you don't), you can keep your rags.

In a few more years, most Americans will be lucky to have rags.

Mon, 11/11/2013 - 21:39 | Link to Comment James_Cole
James_Cole's picture

As quantitied, and explained by Alexander, "the single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045."

Exactly right, pay attention all yee single moms, your hard work is being punished!

Mon, 11/11/2013 - 22:56 | Link to Comment RafterManFMJ
RafterManFMJ's picture
The American "Rags To Riches" Dream Is Now History For Most

Well look at the bright side; Most 'Rich' Amuricans can now enjoy the excitement of going from riches to rags! And won't that be fun?

Mon, 11/11/2013 - 21:05 | Link to Comment BigJim
BigJim's picture

 ...In an ‘equal chance’ economy, socioeconomic status would change in a random but predictable way, with 20% of people staying where they are and 20% moving into each of the other categories (imagine a lottery machine where 100 balls pop around a tank and 20 are randomly funneled into each of five different baskets).

Sigh. What a load of bullshit. This argument that in an 'equal chance' society everyone would be randomly distributed is patently absurd. People's culture is the biggest determinant to their attitudes to thrift, education, hard work, and deferring gratification, which in turn have the greatest influence on how you progress in life. And one acquires one's culture principally from one's parents. If your parents are lazy, or have a low IQ, or blow their week's wages on payday, the chances are pretty good you will too.

So lots of other 'developed' countries have more social mobility? Have they done a breakdown of mobility vs race? Mobility vs how many generations the family have been in a country?

So what amount of social mobility is the 'right' amount of social mobility? If I'm in the upper quintile, why would you expect my children - who would inherit my wealth, along with my attitudes to investment, work, thrift, education, etc - not be likely to be in the upper quintile too?

Mon, 11/11/2013 - 21:43 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

"So what amount of social mobility is the 'right' amount of social mobility?"

100% works for me.

The last person I want to be given passing grades for free or a prime job is some Jamie Dimon snatch daughter....

I would have thought the Wild west, I pulled myself up by my bootstraps, Shrugist, liberterariums here would have been blowing up the blog on this one....

Mon, 11/11/2013 - 21:49 | Link to Comment James_Cole
James_Cole's picture

If I'm in the upper quintile, why would you expect my children - who would inherit my wealth

The takeaway is, though the children may be as stupid and useless as their parents in the US caste system they'll do a-ok - wealth being the divider of importance. In other countries actual merit matters more, so if kids are born poor yet are smarter than BigJim's minions (likely not a big accomplishment) they'll do better. 

Mon, 11/11/2013 - 22:11 | Link to Comment BigJim
BigJim's picture

My 'minions'? lulz

I didn't say I was in the upper quintile, BTW.... if you examine the statement you'll see the first word is 'If'.

 The takeaway is, though the children may be as stupid and useless as their parents in the US caste system they'll do a-ok - wealth being the divider of importance.

I see... so you'd like the government to confiscate everyone's estate upon death and hand out the deceased's goods... 'fairly'?

Any other impressive ideas you'd like to share with us all this evening?

Mon, 11/11/2013 - 22:52 | Link to Comment acetinker
acetinker's picture

At the end of the day, I actually love LTER.  She don't know it yet, but by the time this debacle plays out, she will be forced to admit that her nemesis was, in truth correct.  She may flame out in a bloody mess, or come to realize that vagina envy is futile.  The worst I ever had was absolutely wonderful, btw.

Mon, 11/11/2013 - 22:53 | Link to Comment akak
akak's picture

You'll have to forgive James --- he was born in the 2nd lowest quintile of intelligence, and in the bottom quintile of integrity.

Mon, 11/11/2013 - 22:59 | Link to Comment acetinker
acetinker's picture

Key-rist!  Did I mistake Lames_Cole for LTER, or am I in some kind of time-warp?

Mon, 11/11/2013 - 23:13 | Link to Comment akak
akak's picture

LTER has come a LONG way from his former statist ways here (not all the way, but definitely is on the right road), whereas James_Cole is mostly just a low-key MDB without the humorous slant.

Mon, 11/11/2013 - 23:11 | Link to Comment James_Cole
James_Cole's picture

I see... so you'd like the government to confiscate everyone's estate upon death and hand out the deceased's goods... 'fairly'?

No, wealth increasingly means access - access to the best schools, best tutors, best resources etc. Equality of access should be prioritized, folks can keep their wealth. 

If you look around the world for the most part you'll see a familiar trend, countries with high social mobility tend to do much better than countries with low social mobility, this isn't by chance. It's actually not economically healthy to have an entitled upper class and a disillusioned lower class. 

The last thing rich folks want is their stupid kids competing toe to toe in the classroom with poor kids. 

http://www.youtube.com/watch?v=acLW1vFO-2Q

Tue, 11/12/2013 - 18:28 | Link to Comment BigJim
BigJim's picture

 No, wealth increasingly means access - access to the best schools, best tutors, best resources etc. Equality of access should be prioritized, folks can keep their wealth.

Jesus, you're even dumber than I thought. You appear to have no concept of resource scarcity. Folks can somehow keep their wealth, but the poor - ie, everyone - will be given 'equality of access' to 'the best schools, the best tutors, best resources'?

lulz^2

Mon, 11/11/2013 - 21:10 | Link to Comment FredFlintstone
FredFlintstone's picture

Luna,

 

Maybe you could do this instead?

http://www.theguardian.com/world/2013/nov/11/artist-nails-testicles-red-square-pyotr-pavlensky

Let me know if you are not interested as I might take the lead.

 

Fred

Mon, 11/11/2013 - 20:41 | Link to Comment no life
no life's picture

They should just take a few minutes and learn how to flip stocks around for a living... really good money and you get to skip all the shit like worrying your boss is gonna gig you for not having enough pieces flare on your uniform. Just become another guy riding the bubble... but never hold anything more than an hour.

Mon, 11/11/2013 - 20:42 | Link to Comment I am Jobe
I am Jobe's picture

Ah the AMERIKAN DREAM, 

 

Mon, 11/11/2013 - 21:28 | Link to Comment prains
prains's picture

never was a dream but always was a SCHEME

Mon, 11/11/2013 - 20:43 | Link to Comment Running On Bing...
Running On Bingo Fuel's picture

Nepotism, and tribal connections will get you there.

Over.

Mon, 11/11/2013 - 20:47 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

A large part that's fostering this situation, is the fashionable but long gone myth of the Lone Hero from the Frontier mentality.

Lone wolves do not amount to much. You need to work as a Pack, a Clan or (better still) as a Tribe, to get ahead and stay there.

We no longer live in a frontier homestead, where individuality brings in the harvest, for a long cold winter ahead. Just like generals fight new wars with lessons and methods of old wars, so do the masses keep solving new problems with old/antiquated solutions.

Some Tribes have figured this out, most have not.

Mon, 11/11/2013 - 21:16 | Link to Comment Yenbot
Yenbot's picture

Its the cows that are missing, Kirk-san. No cows, just boy.

Mon, 11/11/2013 - 21:44 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

The myth is not gone, apparently.....  but it is a myth

Mon, 11/11/2013 - 20:49 | Link to Comment Alcoholic Nativ...
Alcoholic Native American's picture

No, shit, You can still win the lottery though, but as a minimum wage employee that works at a lottery terminal, that is highly unlikely.

Mon, 11/11/2013 - 21:13 | Link to Comment AlaricBalth
AlaricBalth's picture

State lotteries. A great way to tax those that can least afford it. Although it is "voluntary", to some it is their weekly dose of hopium.

"Duke University researchers found that the more education one has the less one spends on lottery tickets: dropouts averaged $700 annually compared to college graduate’s $178; and that those from households with annual incomes below $25,000 spent an average of nearly $600 per year on lottery tickets, while those from households earning over $100,000 averaged $289; blacks spent an average of $998, while whites spent $210."

Mon, 11/11/2013 - 21:36 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

I think they have programmed winning the lottery into Quicken's budgeting programs.  Or at least that was my feedback to them.

Mon, 11/11/2013 - 21:41 | Link to Comment Miffed Microbio...
Miffed Microbiologist's picture

I put one dollar a week in our lab's lottery pool. Just because I don't want to be left here alone working still as a stupid wage slave when all my sheeple work associates are out buying McMansions and BMWs with Lotto13 vanity plates. That would be my typical dumb luck. But spending $52 a year on such nonsense is embarassing.

Miffed;-)

Mon, 11/11/2013 - 23:30 | Link to Comment Agent P
Agent P's picture

4% travel the rags-to-riches path.....0.00000004% (or so) win the lottery.....yet what do people do more of, work hard to move up in the world or buy lottery tickets?

Tue, 11/12/2013 - 02:37 | Link to Comment El Crusty
El Crusty's picture

well to be honest, the chances of being one of those 4% seems to be getting increasingly remote. in such a situation, the lottery tickets appear to be the better play.

Mon, 11/11/2013 - 20:49 | Link to Comment Two Theives and...
Two Theives and a Liar's picture

Seems like "Shrugging" makes more and more sense..

Mon, 11/11/2013 - 21:10 | Link to Comment Platinum
Platinum's picture

Shrug, then hunker down.

Mon, 11/11/2013 - 21:14 | Link to Comment Dagny Taggart
Dagny Taggart's picture

Every skill you learn and tool you acquire to become more self reliant, every way you can find to withdraw your consent - is what seems sensible at this point. Atlas is Shrugging.

Mon, 11/11/2013 - 20:55 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

The American Dream Myth.

We tend to believe we (as in me, myself and I) are exceptional....even when we are not. Combine this tendency with the American Myth of upward mobility and we slaves trudge off to work each day believing magic can and does happen.....or at least it will for me.

<Or maybe it's as simple as.....I owe I owe, so off to work I go.>

Mon, 11/11/2013 - 20:56 | Link to Comment I Write Code
I Write Code's picture

Let's just agree that all Americans are above average and leave it at that.

Mon, 11/11/2013 - 21:04 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

There is a silly story I occasionally tell that highlights the sense of self importance and excellence we all seem to suffer from to one degree or another.

"As part of HIS screening process God meets with every soul who has recently passed before they are sent on their way. At one such screening 100 recently deceased souls are told by God that 99 of the 100 in that room will be going directly to hell, but that one soul was blessed and would ascend with God to heaven. Within seconds 99 of the gathered souls have convinced themselves they alone are the chosen one and the actual blessed soul is convinced he is destined for hell."

Mon, 11/11/2013 - 21:09 | Link to Comment willwork4food
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Hell? As in working for Wal-Mart during Black Friday week?

That's inhumane.

Tue, 11/12/2013 - 02:43 | Link to Comment El Crusty
El Crusty's picture

you have no idea how bad that is. i've actually worked there on black friday. take your worst imagination, then multiply it times ten. huge crowds and a $4 waffle maker will turn people into crazy fuckers in a hurry.

Mon, 11/11/2013 - 22:57 | Link to Comment RafterManFMJ
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tl;dr :)

Tue, 11/12/2013 - 20:21 | Link to Comment acetinker
acetinker's picture

See ya' in hell then.  Godspeed!

Mon, 11/11/2013 - 21:13 | Link to Comment Row Well Number 41
Row Well Number 41's picture

"where all the women are strong, all the men are good-looking, and all the children are above average."

#41

Mon, 11/11/2013 - 21:19 | Link to Comment Yenbot
Yenbot's picture

"where all the women are strong, all the men are good-looking, and all the children are above average."

That's RUSSIA, Comrade 41.

Mon, 11/11/2013 - 23:39 | Link to Comment RaceToTheBottom
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Lake Wobegon, right next to Lake Baikal. 

Mon, 11/11/2013 - 21:16 | Link to Comment Urban Redneck
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Mr. Ed is overdue for a trip to the glue factory. He's getting bitch slapped by every world leader that Barry has managed to piss off. The the only thing above average about American politicians is their opinion of themselves.

http://en.ria.ru/world/20131107/184576114/Egypt-Eyes-4Bln-Arms-Deal-With...

Mon, 11/11/2013 - 21:59 | Link to Comment Miffed Microbio...
Miffed Microbiologist's picture

I think modern education has made this even worse. Focusing on self esteem, everyone gets a trophy day, high merits awarded to middling performance ...etc. All these things contribute to a warped self importance.

What a shock for kids when they enter the real world and their boss doesn't tell them they're wonderful every five minutes. Constructive criticism isn't seen as an evaluation but a personal attack. What's even worse, I've heard nightmare stories from employers that mommy and daddy often complain to their child's boss after a poor performance review. Thus perpetuating the " I must be exceptional" fantasy. True happiness occurs when you can observe and accept yourself honestly and objectively, faults as well as talents and do your best with what you have.

Miffed;-)

Mon, 11/11/2013 - 22:48 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

STEM education is still fairly world-class, at the college level.  The issue is not there, it is below that in the college level and in the non STEM curriculum.

The main issue with College STEMS, is People make the mistake thinking that Engineering school is a good representation of work as an Engineer.  100% of engineers say that communication is what helps them advance.  Yet most people leave engineering because they think that engineering calcs is what they will do 100% of the time.  

For that I blame teachers/profs and councilors and stupid kids and their moronic parents.

Mon, 11/11/2013 - 23:14 | Link to Comment Miffed Microbio...
Miffed Microbiologist's picture

This is so true. When my husband graduated in computer science he thought he would just program. Instead he had to draft projects/ proposals, document all his work so others could understand his logic for debugging, go to countless meetings to coordinate his work with other pertinent groups, draft plans where each feature would be included in what upgrade...etc. He called me once so frustrated " I never knew I would be working with so many people!" Quite hard for a loner.

He gave a few talks at our local high school on career day and tried to enlighten the kids who were interested in Computer Science. Most were completely clueless and only wanted to program games.

Miffed;-)

Tue, 11/12/2013 - 00:06 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

I have excelled in Engineering firms and consulting engineering roles and I barely made it through undergraduate, mostly because of the math.  But I continued, mostly in part because I knew (was told) that once I got the paper, I would be competing with people who could not communicate, or think systemically.  Graduate Engineering was different, partway because the profs were nicer as they wanted money from you when you graduate. I was also the only person born in America in my graduate program.

My wife wanted to be an engineer but was afraid of the math and from a family that was business not engineering, yet her skills have led her to management of the engineers since they did not have the skills or desires to move up. 

I am extremely bummed that the US are not filling up classes with engineers, because it teaches critical thinking.  The undergraduate is not a terminal degree.  They can later on become MBAs or lawyers or dickheads on ZH, but at least they would do it from a point of base intelligence.

Tue, 11/12/2013 - 00:54 | Link to Comment Miffed Microbio...
Miffed Microbiologist's picture

I was fortunate to have the option to take biology based calculus but my husband had to take engineering calculus. Far more difficult and though he was much better at math than I, he struggled to get a B. Funny why that was required. He said he has used none of it in his job. Perhaps a method to weed out students?

Proper system architecture is critical in his profession. He regales me with stories about the insanely intelligent members of his team that don't have a clue how to craft a usable product. We laugh they must have been involved in the design of the Obamacare web page. Their designs are convoluted and complex designed to capture all possible contingencies but are slow and inefficient. Their proposals would often take 3 man years to complete when four months was the allotted time. Getting them to think simplistically and logically is his biggest challenge. But he admits they are far more intelligent than he.

Funny, after after serving on four juries that have shortened my life span significantly I have come to the conclusion Logic should be a requirement for graduation. If Engineering can develop critical thinking, I would be willing to drop that requirement for them. ;-)

Miffed;-)

Tue, 11/12/2013 - 11:11 | Link to Comment SilverRhino
SilverRhino's picture

If you cannot communicate via the written and spoken word you will NOT advance.  

Tue, 11/12/2013 - 14:43 | Link to Comment akak
akak's picture

Tell that to all the thumb-typing twits.

Tue, 11/12/2013 - 05:47 | Link to Comment Oldrepublic
Oldrepublic's picture

re: John Steinbeck:

“Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”.

Mon, 11/11/2013 - 20:54 | Link to Comment I Write Code
I Write Code's picture

This is a confused study giving correlations without being clear on cause and effect, but let's grant the major premise, that economic mobility is more limited today than most think.  I have to say I'm not terribly surprised, I can give many reasons why maybe, for the most part, after 250 years, people in our society have pretty much found their own levels.  Which portends things being different going forward than they've been over most of that period.

Of course the welfare benefits are a big part of that, but the question is whether there are really any alternatives.  It's possibly a bigger problem to see the "stickiness" of the wealthy, because if you even know many wealthy people, and their kids, it's hard to believe there's any objective reason why they SHOULD stick in those upper percentiles.  If that area is sticky, it offers to explain the lack of mobility below in a bad way - call it lack of liquidity.

OTOH, lack of actual mobility does not mean the doors are closed, it only tells us that nobody is walking through them.  Two different quesetions, y'know.

Mon, 11/11/2013 - 21:06 | Link to Comment q99x2
q99x2's picture

Yes but it is easier now to go from rags to riches without working than it was before.

That's what I'm talking about.

Mon, 11/11/2013 - 21:15 | Link to Comment Cobra
Cobra's picture

"40% of Americans DELUDE THEMSELVES INTO BELIEVING it’s fairly common for someone to start off poor, work hard and eventually rise to the top of the economic heap..." - That's more like it!

Mon, 11/11/2013 - 21:19 | Link to Comment Seasmoke
Seasmoke's picture

It's not what you know, it's who you blow.

Mon, 11/11/2013 - 21:20 | Link to Comment Tulpa
Tulpa's picture

"the Horatio Alger myth - that hard work and pluck will lift a person from dire circumstances to enviable success - is not living up to expectations for Americans."

Seems you forgot the part in bold, Tyler.  Indians and Koreans still come off the metaphorical boat with a couple of bucks and very little English, bust their asses in jobs no one else wants to do for years on end, send their kids to college here, and move up the ladder.  Meanwhile our own native English speaking "poor" go through life sucking Uncle Sugar dry through an EBT straw.

 

Tue, 11/12/2013 - 13:58 | Link to Comment Kobe Beef
Kobe Beef's picture

Good call. +1

"this is what we call the 'parental penalty,'

I call it genes + culture. The Great Society is an incredibly succesful dysgenics project. Hollywood and Progressive Indoctrination has dumbed down the rest.

Practice good parenting, and prepare for the Great Liquidation.

Mon, 11/11/2013 - 21:21 | Link to Comment FredFlintstone
FredFlintstone's picture

There is a little book that came out maybe a dozen years ago that explains the reasons behind all of this called "The Bell Curve". 

http://en.wikipedia.org/wiki/The_Bell_Curve

Many said it was racist, but it discussed socio-economic class and not race. Regression to the mean, longitudinal studies. People meet each other at college now and get married as opposed to 80 years ago where the Harvard chap married his HS sweetheart who did not go to college. She might of been of average intelligence. He might of had a 105 IQ and got in because of his father.

Now the Harvard students, men and women, get in because of merit. They marry and have smart, competent offspring. The underclass breeds with each other and occasionally will bring an exceptional child into the world. It is a good read.

 

Fred

 

 

 

Mon, 11/11/2013 - 22:20 | Link to Comment Bazza McKenzie
Bazza McKenzie's picture

Add to that, in the past those with a low IQ struggled to survive, let alone breed.  Now the government pays them to do so and they aren't producing any Einsteins.

In addition, once the "lord of the manor" would spread his seed around with lots of the local maids, creating platoons of bastards in the "underclass" with enhanced genetic endowment.  No doubt the seed is still spread around, but contraception and abortions take care of a lot of the little bastards with the genes for upward mobility.

Mon, 11/11/2013 - 22:47 | Link to Comment A Lunatic
A Lunatic's picture

From which class do scrotum nailing artists precipitate I wonder...........

Mon, 11/11/2013 - 23:01 | Link to Comment Miffed Microbio...
Miffed Microbiologist's picture

I wouldn't be so impressed by those children of Harvard graduates. My daughter spent her third year in college at a Shanghei business school. The majority of her fellow students came from affluent families of Ivy League schools. They drank non stop, even during class time. Brought whores into the dorms at all hours of the night. When she complained they smeared cum all over her door. Her excitement going to school with such high class kids was quickly burst. She finally got approval to move to the Chinese students dorm which was dead silent and all they did was study. I don't know if these kids were intelligent or not. If they were, they were certainly squandering their abilities.

Miffed;-)

Mon, 11/11/2013 - 21:23 | Link to Comment three chord sloth
three chord sloth's picture

This is not surprising. Our sorting is largely done, while Europe, which only began their Great Sorting after WWII, is still under way. It is only natural that income mobility is higher there.

America had high income mobility (both upward and down) beginning after our Civil War. That mobility lasted about a century. At this point, we are six to seven generations into it... and many (most?) of the folks who have it in them to rise to the top (and produce offspring capable of the same) have already risen.

Europe had a strong class structure (both formal and informal) in place until relatively recently; this means many potential high-achievers were trapped, languishing at the bottom, (and many borderline idiots were given a cake-walk into the upper tiers as well) until a mere 60 years ago. When those class restrictions lessened, mobility increased. In a few more generations Europe's high mobility will plummet once again, and they will be like we are here... where assortive mating by the parents set the course of the child's life.

High income mobility can only last a century or so. After that, the breeding/rearing advantages/disadvantages are too great to overcome.

Mon, 11/11/2013 - 21:26 | Link to Comment atomicwasted
atomicwasted's picture

The War on Some Drugs affects the lower class disproportionately and sends who would be working-class adults to prison, leaving their kids in the custody of one parent (if they're lucky). That parent is either never at home because of working to make ends meet (leaving the kid plenty of free time to join a gang) or always at home because of welfare (making sure the kid has no role model who works).  The War on Some Drugs couldn't be designed better to keep the underclass down.

Tue, 11/12/2013 - 02:53 | Link to Comment Diogenes
Diogenes's picture

It helps weed out those stupid enough to do drugs.

Mon, 11/11/2013 - 21:29 | Link to Comment surf0766
surf0766's picture

The fundamental transformation is almost complete.

 

Mon, 11/11/2013 - 21:29 | Link to Comment Magnum
Magnum's picture

Tell that to people who know how to write Apps for iOS.  Kids in early 20s making $125 per hour and picking their clients.

Mon, 11/11/2013 - 21:32 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

American's have been passed in income mobility by Northern European countries a while ago.   At least we cannot blame it on the latest set of criminal activity of American Banksters.

I did not notice it then or when I read the first few research articles that presented this info, but I bet this started in the early 70s when we peaked and started sliding real income-wise.

Hmmm, now when did tricky dick nail the last nails into gold backed dollars?

 

Mon, 11/11/2013 - 22:16 | Link to Comment Mercury
Mercury's picture

In a birthright economy – think India’s old caste system – 100% of individuals would remain in the economic category they’re born into. In an ‘equal chance’ economy, socioeconomic status would change in a random but predictable way, with 20% of people staying where they are and 20% moving into each of the other categories...

 

You mean an "equal chance economy" where it is also the case that everyone is born with exactly equal intelligence, abilities and potential. If that second part is not actually the case, try and simulate in your head what society would look like after three, five or seven generations.

Sure, the incentive structures which the government sets up and the nature of our current, crony capitalist system are big parts of the story here but also consider the explanation that people are swimming in their own gene pools and society is stratified to a much greater extent than has been the case in the last 100 years of American history.

Remember when doctors and lawyers used to marry their secretaries? Now Phds tend to marry other Phds. There are clans in Hollywood that run three or four generations deep - and despite their leftist politics they wouldn't be caught dead mingling with the farmer in gas-fracking country whose land they just made a big stink about protecting.

The thing is: smart, affluent Americans tend not to have many (or any) kids. So, you can run that simulation in your head too...

Mon, 11/11/2013 - 21:55 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

The US has been the recipient of the worlds brains, hence the term brain drain during this time when we were losing the mobility.

Imagine how much the mobility would have been if we were not the recipient of this brain drain????

Mon, 11/11/2013 - 21:57 | Link to Comment Boondocker
Boondocker's picture

Sell your silver open a medical marijuana dispensary....

Mon, 11/11/2013 - 22:21 | Link to Comment Downtoolong
Downtoolong's picture

“stickiness” at both ends of the income spectrum.

Yep. For every beautiful miracle of a true and deserved rags to riches success story there are at least ten rich idiot morons who continue to stay rich and hold power and get rewarded with whatever they want no matter how badly they eff up. We’ve all seen that too, but, never in the MSM.

Mon, 11/11/2013 - 22:31 | Link to Comment Mercury
Mercury's picture

True, but as such stories about sports, entertainment and lottery heroes prove, wealth has a tendency to become unstuck too.

Mon, 11/11/2013 - 22:29 | Link to Comment 22winmag
22winmag's picture

The fuckken permit nazis will shut down your lemonade stand before it gets a chance to get off the ground.

Mon, 11/11/2013 - 22:57 | Link to Comment akak
akak's picture

Hell, I see PLENTY of mobility within American society today --- most of it just happens to be in the downward direction.

Mon, 11/11/2013 - 22:59 | Link to Comment Running On Bing...
Running On Bingo Fuel's picture

<-- Americans are stupid
<-- Americans are stupid

Your vote counts!!

Over.

Mon, 11/11/2013 - 23:15 | Link to Comment williambanzai7
williambanzai7's picture

One obvious barrier to upward mobility is the destruction of small retail. In other parts of the world, small retail is where many self made individuals of wealth got their start, typically run as a family establishment either in a market bazaar or on a street. And the internet has not changed that yet.

How easy is it to do that in our retail environment? Thank you Amazon and Walmart et al...

Mon, 11/11/2013 - 23:40 | Link to Comment QQQBall
QQQBall's picture

Retail is too narrow Banzai Billy. One-man operations are getting tougher in many fields. I think the old adage that you have to be where you want by 40 yo is a good one. Divide life into 3 25-year segments; preparation, acquiring asset; living off acquisitions. The 25-30 yo making squat are really getting screwed. 

Mon, 11/11/2013 - 23:58 | Link to Comment yofish
yofish's picture

It is much easier for someone like you, an artist, or me a boat builder, to duplicate the fanciful and colorful path that makes good 'look at what I've done!' stories. My father never had the wherewithall and breaks to be featured in Wired but he was certainly 'successful' if you count producing producive offspring. In my little Burg, we have a bookstore that has adapted and is successful even though it competes with Amazon. Wally World is not going away. Upward mobility is always expansion. In america, the greatest push in upward mobility was after the indegenes were finally put on the rez and then after conquering the rest of the world in WWII. Upward mobility is ALWAYS on the back of someone else.

Mon, 11/11/2013 - 23:19 | Link to Comment yofish
yofish's picture

It's always been thus. This is another non-story to keep ZHer's fluffing themselves. What did everyone do back in the day when you couldn't idle it away in chat? Does anyone here actually work? 

Wed, 11/13/2013 - 00:17 | Link to Comment Flakmeister
Flakmeister's picture

No, it's a bunch of 65 year old guys too proud to admit that they get a SS check and Medicare benefits... A good number of them once got a woodie from thinking about Ayn Rand... 

Mon, 11/11/2013 - 23:36 | Link to Comment QQQBall
QQQBall's picture

Match Boy Dick

Tue, 11/12/2013 - 00:59 | Link to Comment Flakmeister
Flakmeister's picture

Those fuckin socialists! How dare they have higher upward mobility than us!

Tue, 11/12/2013 - 01:18 | Link to Comment auntiesocial
auntiesocial's picture

SOMEONE told me the following:

"Any idiot can dumb luck into a million dollars. It is the 2nd million that separates the men from the boys..."

and that is what keeps me going. Only the strong will survive. I don't see average joe that thinks working for someone else on a W-2 being his ticket to prosperity going anywhere fast anytime soon.

Tue, 11/12/2013 - 02:56 | Link to Comment Diogenes
Diogenes's picture

Tell me more about the dumb luck thing.

Tue, 11/12/2013 - 01:49 | Link to Comment MedicalQuack
MedicalQuack's picture

It's a changed world and in reading the comments here those doing ok are pretty much software engineers.  The dividing of the money in the US is all accomplished with technology and math models.  It's all about using segmentation to keep inequality going. 

http://ducknetweb.blogspot.com/2013/04/modeling-for-inequality-with.html

Look at healthcare, just the markets being run by screeching algorithms and math models...it is the continuous rise and fall of the machines here too.  So until there's something done to question models, we are stuck with the math models that run everything and models can lie and change risk which we saw during sub prime.

http://ducknetweb.blogspot.com/2013/11/obamacare-continuous-rise-and-fal...

Tue, 11/12/2013 - 04:24 | Link to Comment The Abstraction...
The Abstraction of Justice's picture

'think India’s old caste system '

 

This is exactly why Brahmin caste Hindus were brought in to America and Europe and handed the best paying jobs on a plate. It was a deliberate act to deny social mobility to the natives. That is why unprofitable outsourcing continues to this day - to take opportunities and lose them to India, the most racist nation on Earth. Now the full measure of the caste system has been thrust upon Europe and the USA, the tip of which is the Indian branch of Common Purpose, ratified by none other than David Cameron.

Tue, 11/12/2013 - 07:06 | Link to Comment Tom Brady
Tom Brady's picture

Because in order to become wealthy from nothing you first have to pay for big government and their wars, entitlements, welfare etc.  Then and only then if you've overcome that burden can you focus on your goals for yourself and your family.

Tue, 11/12/2013 - 09:04 | Link to Comment Global Observer
Global Observer's picture

Studies recording facts are fine, but if they are intended to change/make policy to effect change, it requires more than facts and correlations.

Parents, for the most part, try to ensure same or better standard of living (both absolute and relative) for their children. Even if we assume genetics play no part in a child's ability to eventually acquire and/or retain wealth, the priorities imparted by the parents to children are themselves a significant contributor to the child's eventual success in making wealth or retaining inherited wealth.

Short of making all children wards of the state shortly after birth and disallowing any inputs, both material and non-material, from the parents to the children, there is no way of giving an equal opportunity to all at making and retaining wealth. The best any society can do is to help exceptions from those at the lower end of the economic spectrum opportunities to rise.

Sports is possibly one arena which offers the most egalitarian opportunities to make wealth. A study showing the wealth retained by retired sportspersons versus the economic bracket they began in before taking the sport up, can give us indications about how successful egalitarian programs can be in achieving their goals.

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