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Comment by walkedaway | Hacker News Reader

Your general story of poor-to-doing-well is the majority story in the US (not sure of other countries). Income mobility is a huge thing in the US, a great feature that I see mentioned very little outside of academics. Something like 80% of people will be in the top 10% of earners at some point in their lifetime, and 98% of people will be in the top 50%. "poor" and "rich" are not static labels, and they vary greatly even year to year (Thomas Sowell has excellent data and analysis on this).

FWIW I grew up poor and I do the same as you - no debt, pay cash for cars (even expensive ones) and despite millions in the bank, I fear not being able to provide for the family. At my age, I've learned that this is a good thing, as opposed to people my age that have spent lavishly and are now wondering how to start saving for their retirement in 10 years.

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That claim doesn’t even pass the sniff test. The idea that 80% of people - which must include those born into multi generational deprived families just by numbers alone - suddenly find themselves for a period of time on the other side of the glass ceiling of poverty, it’s outrageous.

I’d love to be corrected on this.

Walkedaway is exaggerating a claim made by the conservative American Enterprise Institute:

https://www.aei.org/carpe-diem/some-amazing-findings-on-inco...

This is how they counter all the talk about the 1%. They suggest that 56% of people will be in the top 10% for one year or more. In their entire working lives.

Distortions include:

-income is not wealth

-some kinds of income are very uneven year-over-year

-jumping into the top bracket for only one year doesn't indicate income or class mobility

-most of the top 1% of income do in fact stay in the top 1% of income

People who earn a lot in one year but don't become wealthy may include:

-actors who get one TV commercial

-waiters at high-end restaurants who burn out

-realtors who get a few good sales in a row

-victims of disabling accidents receiving large insurance payouts

-oil and other trade workers in Alaska

-minor lottery winners

-people cashing in a retirement fund to deal with emergency spending

The fact that America is a land of random windfalls doesn't help with social mobility. A family with multi-generational poverty gets a windfall and immediately has to spend it just trying to catch up a bit.

You left out one of the biggest causes of this. For many people in that 56%, the year they end up in the top 10% is the year their last surviving parent passes away. Inheritance is a big one-time windfall for many people.

The other misleading thing is it looks at 44 years of longitudinal data, and doesn't make corrections for differences between the early years and later years. Income has become more polar in the last 40 years, so the current numbers are a fair bit worse than the average numbers of the last 4.4 decades.

Inheritances are not taxable (for the recipient), but IRS data shows similar patterns.

What it really comes down to is that the upper tail of the "reliable income" distributions is thin enough that a large fraction of the people who end up in various "top N%" buckets are there due to various windfalls, lumpiness of income (e.g. a writer getting an advance that they live on for a few years while writing the book), etc, etc.

Which is, by the way, why the way we do progressive taxation is a bit weird. Progressive taxation with tax brackets based on lifetime earnings, as opposed to current-year income, would make a lot more sense in some ways...

As much as at first blush progressive taxation based on lifetime earnings might seem fairer, it has extremely dangerous consequences. Having your tax bracket go up throughout your life creates major complications in saving for retirement (and extracting deferred income from retirement savings) which is enough to make the idea wildly impractical in my view.

-Selling a business built over decades

Can u provide sources for your income mobility claim? The numbers here do not seem to line up with what you are quoting

https://www.google.com/amp/s/www.forbes.com/sites/aparnamath...

Dynamics, like income mobility dynamics are a complicated thing. We tend to think in stories, and that is useful, but it makes it easy to reach overly general conclusions.

The old republics (US & France, mostly) tend to overlook class... to some extent intentionally. My country (ireland) has the opposite problem: too much class consciousness. To much telling of class-sentric stories.

But, class dynamics do exist in the US & France too.

Class mobility exists too, but it's nowhere near as mobile as income mobility. Class is stickier by definition. You can just as easily colour in a class stickiness story with statistics. The likelihood at birth of someone graduating high school, going to prison, being poor, rich etc. It is true that where you start is a pretty good predictor, statistically, of where you will end up.

It's important to keep both perspectives in mind, simultaneously. There are real opportunities to escape poverty. The ovarian lottery is also very important, so are other "lotteries." It's also a mistake to see yourself as a statistic.

If you don't mind, can you share your story here?

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