Meritocratic Opportunity: On the Decline

December 1st, 2011

By every measure I’ve been able to find, income mobility in America is much lower than in other prosperous (especially northern European) countries. (Follow Related Posts links below for details.)

But I’ve had trouble tracking down changes in those measures. Here’s one:

I’m finding it difficult to parse the date axis at the bottom (and I haven’t had time to go back to the original paper), but it looks to me like the blue line is generally flat until 1985, when it starts declining.

This measure is necessarily plagued by the life-cycle changes problem that these type of studies are heir to, but it’s another data point in the big picture. I’d love to see a similar chart of intergenerational mobility over time — or even better, multiple such charts for different countries/regions.

Off the Charts Blog | Center on Budget and Policy Priorities | Blog Archive | Income Mobility Can’t Explain Away Evidence of Increased Inequality.

  1. Clonal Antibody
    December 1st, 2011 at 11:54 | #1

    Free markets by their very nature will, left to themselves lead to obscene wealth inequality.

    This comes primarily from two very human tendencies – a) A human inclination to engage in zero sum games (otherwise known as gambling.) and the other b) A desire to get a free lunch, or “not having to get my forehead wet” also known as “let your money work for you” – in other words rent seeking behavior, once a certain amount of wealth has been accumulated.

    This is exacerbated by a third tendency, which is a desire to leave behind some of our wealth to our progeny.

    These three forces together lead to the impoverishment of large segments of society.

    The New Scientist article “Why it is hard to share the wealth” in conjunction with “Now that’s power” makes for an interesting juxtaposition. The implication is that the richest 0.1% of the population’s income is described by Pareto’s Law — meaning that if you’re born into that kind of money, you’ll only get richer, no matter what you do. And the poorest 99.9% of the population’s income is explained by Boltzman’s Law — describing random movement of gases in an enclosed area, and meaning that even if you’ve struggled up to the left end of the Pareto curve, you’re far more likely to get poorer than to make it to the 0.1% elite. So much for the American Dream.

    The above is not to say that free markets mean wealth equality for the bottom 99.9%, but rather, that they are in the “dog eat dog” world governed by the Boltzmann-Gibbs laws.

  2. December 1st, 2011 at 12:29 | #2
  3. December 2nd, 2011 at 10:13 | #3

    I have some links here which might be helpful

    http://jazzbumpa.blogspot.com/2010/07/income-mobility-revisited.html

    Cheers!
    JzB

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