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Comment by refurb | Hacker News Reader

Again, it's highly problematic defining mobility as "moving from bottom quintile to top quintile".

- Moving from bottom quintile to 2nd highest is significant mobility and completely ignored in this analysis.

- The analysis ignores the fact that the highest quintile in the US is higher in absolute terms than other countries. So moving from bottom to 4th may give more income than bottom to 5th in other countries.

- This analysis also ignores the changes of income within quintiles. The 3rd quintile in 1980 isn't the same income in 2020. 3rd quintile could see significant income improvements.

- This analysis also ignores government transfers.

- Countries that have a lower income spread, but overall less income would do better.

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I read about another study relatively recently (maybe it was HN? Not sure.) that talked about some of the fundamental flaws when looking at these types of economic mobility studies (i.e. change of moving from bottom quintile to top quintile, etc.) because they usually only look at income and ignore social class.

That is, suppose Bob is a rich banker. His kid Frank goes to private school and on to an Ivy League college, but seeing how distant and money-focused his dad was growing up, Frank decides to become a writer. Frank is certainly not poor, but he definitely lives on a very modest income and that is what his son John experiences growing up. John, not wanting to have to be in as modest circumstances as his Dad, decides to follow in his grandfather's footsteps and become a banker. His grandfather is even able to introduce him to some colleagues and get him some interviews at top investment banks.

Point being, if you just look at income, it will look like a dynamic economy with lots of economic mobility, with each generation moving from the top to the bottom of the economic latter, and vice versa. In reality, though, nothing really changed at all about their social class and the opportunities that were open to them. Unlike most people in the bottom half of the economic spectrum, Frank was basically there by choice.

Again, you may think this is an extreme example, but in my experience I have seen some version of that multiple times.

It’s easy to choose the artist life if your parents can bail you out when shit happens.

A little harder if you’re expected to be the bail out for your parents.

Lots of poor people live with their parents, you see that all over the world. Also lots of rich people disown their kids. That has more to do with the mentality of your parents than anything else.

I’m putting this quote on Twitter. :). What handle should I use to credit you?

Very true. I've literally seen this play out with some friends and cousins in extended family in the last 10-15 years. At a critical period, some had to find work to support the family especially as the health of parents started failing, the ones who could rely on family wealth were able to focus full time or almost full time on their art and are now climbing the echelons as established artists.

This is no different than historical standards of artwork. Indeed, it is from those who can afford to sustain an independent spirit, where genuine artistry extends itself into the human pursuit of perfection. When money is not an object this eternal motivation can progress itself unhindered.

I don't think the amount of "rich" people (and their descendants) are a significant enough proportion of the population to render the results completely inert.

I mean... that doesn't detract from the problem at all. That just says there's a massive wealth divide and that moving up to the mere top 20% (the group 1 out of 5 people belong to) should be considered a ridiculous proposition unless you're born into it.

Why should 1 out of 5 people belong to a group so wealthy that saying mobility is difficult should be considered problematic?

> Why should 1 out of 5 people belong to a group so wealthy that saying mobility is difficult should be considered problematic?

Why is it a bad thing that so many people are so wealthy? The more people who belong to the so-wealthy-it's-hard-to-achieve group, the better.

> Why is it a bad thing that so many people are that wealthy?

In the USA's case: for every one person who is that wealthy there are dozens of people struggling to put food on the table.

12% of Americans struggle from food insecurity. By definition, 20% of Americans are in the top quintile. I'm with you, I want that first number to be as close to 0% as possible. But it's mathematically untrue that there are dozens of Americans starving for every American in the top 20%. In fact, there are barely half as many.

I count myself to be lucky in the top 20% of earners in America and have friends who also fit in the range. I've met a lot of people who struggle to put food on the table whose income is in the middle 50%. A lot of them have the same complaint: they don't qualify for help because they make too much. But they also struggle to pay their bills because they don't make enough.

I don't know where you think 12% of Americans "struggle from food insecurity". But I don't trust your numbers because my anecdata says different.

I'm not saying any of the people you've described fall into this category, but: there are plenty of people who struggle to pay the bills but not through lack of income. They struggle to pay the bills while always having the latest iPhone, designer clothes, drinking $7 lattes every day, etc.

On the other hand, I know people who spend less than $7 per day on their entire food budget. They receive just barely enough money per month to cover rent and food (and a little left over to pay for wifi and a small savings for computer upgrades) but they don't struggle from food insecurity. I live in Canada, though, so I don't know about the welfare situation in the US.

I mean just think for a second. There is a maximum for 4 people for every person in the top 20%. It literally cannot be “dozens” even if the entire bottom 80% was struggling for food.

Yes, in the same way that the average energy density in the universe is zero, sure. But there's parts of the country where the local averages are much more skewed relative to the rest of the country.

The 12% is close to the USDA ERS survey finding that 10.5% U.S. households were food insecure at some time during 2020.

That might be a place to begin investigating the difference between your lived experience and more systematic data collection efforts.

https://www.ers.usda.gov/topics/food-nutrition-assistance/fo...

It may be that the definition of "food insecurity" is broader than your intuition.

Per Federal Reserve studies, ~10-15% of US households have no discretionary income after all essential expenses, which includes food. For people in this financial state, any unplanned expense will cut into their already limited budget for food. Even though they have food, and won't starve, this risk is likely sufficient to be deemed "food insecure". However, in practice this is often offset by the myriad USDA and other food subsidy programs.

We received a lot of free food from the US government when I was a child, and I doubt the programs are less generous today. I definitely would have met the definition of "food insecure" at the time even though we always had food.

This is a snapshot of now.

Where are we going with the money thing?

If the goal is everyone have money to access stuff (get to 0%)… why money?

Just provide stuff?

Socially make the story “this is how acquisition of stuff works and what stuff is available.”

Like we do now. Just minus the money.

Everyone lives under a quota for stuff given how much money they have.

What’s with the arbitrary data structure (dollar) and old man algorithms for dividing it up?

That does not answer the question you are responding to in any way.

I mean, wars were fought over that and revolutions had. People decidedly did not like royalty, large so-wealthy-it's-hard-to-achieve groups, being so far above them. For a while, people much preferred knowing they could work hard or smart and make progress from the bottom to the top 20%.

We're talking about the top 20% here. Not the top 0.1%.

Doing hard things can be good. We shouldn’t try to stop people from doing things just because others find it difficult.

We shouldn't. But low social mobility and further stratified wealth divisions is a sign that the effort is pointless for a growing number of people.

This is one of my big take-aways from the article. My great-(great?-)-grandparents from Eastern Europe armed with nothing but excellent numeracy, some English, and the clothes on their backs. They could reliably expect to enter move out of post-immigration poverty based on skills cultivated for the purpose of success in the US. My great-x-grandfather ended up a bank manager. And they passed money and knowledge along to their children, insuring as best they could that their progress wouldn't be lost, and it wasn't. You've heard this story a thousand times, and I'd bet it happened tens of thousands of times.

But that sort of outcome seems almost impossible in America today due to more factors than I could probably name especially at this hour. But it seems clear to me that America has changed in the last 120-100 years in a way that locks people into their social classes/'earnings quintiles' while perpetuating, I assume to the advantage of the very wealthy, the myth that that old America of extreme social mobility still exists. This is a myth that needs to die if we're to adequately address our problems as a nation. I suspect the solution begins in the education industry.

As far as earnings, median household income is very achievable (~$68,000). Associates degrees in medical fields lead to $50,000+ salaries. How far those earnings go relative to other periods is debatable.

Catching up in terms of wealth is probably a lot harder (because we continue to get richer).

Median of all things is always achievable to half of all people everywhere.

>But that sort of outcome seems almost impossible in America today

Then you don't know enough about how well, for example, African and central Asian refugees or immigrants do in a single generation. Same for Hispanic immigrants within a generation or two.

> Then you don't know enough about how well, for example, African and central Asian refugees or immigrants do in a single generation.

In a generation? I moved here from Europe and within ~6 years accumulated as much wealth as my parents did in a lifetime.

The American dream is still alive and kicking for many if not most immigrants.

But my american friends have a fun joke they like to say: "Wow look at that immigrant work ethic! Wish I could work that hard" ... you could

I'm so happy to hear of your success! Unfortunately not enough people will give you the credit you deserve because you didn't come from a "bad" place.

I mean … does it count if there was a (short) civil war when I was 4? Or that my country went from communist dictatorship to EU member in the first 17 years of my life?

“Bad” is extremely relative. Some of my good friends were actively getting bombed by USA just 600km south of my city when I was in high school. That’s like living in SF with an active warzone in LA, if they were in different countries ¯\_(ツ)_/¯

To me, absolutely. To people of a different political persuasion, it's dependent on the color of your skin and how many political points can be scored on the basis of your relative suffering compared to those that are not coming from predominantly "white, European" countries (regardless of how white they may actually be), not the facts of your circumstance.

The plight of a progressive Nigerian immigrant whose family was extremely wealthy prior to immigration is worth more than your story in today's climate.

> But that sort of outcome seems almost impossible in America today due to more factors than I could probably name especially at this hour.

Replace numeracy with programming and it happens right and left. We came from Eastern Europe with barely enough money to rent for a few months. Now we are in top percentile of earners in US. And have lot's of friends with a similar story.

> The more people who belong to the so-wealthy-it's-hard-to-achieve group, the better.

Aren’t you just literally saying that social mobility is bad?

No, I'm saying that there's always going to be some level of wealth that's difficult to achieve. We can all pull a number out of thin air that's just super high, that's tough to imagine people in the bottom 20% commonly getting to in their lifetime.

For argument's sake, let's say that number is a net worth of $500K. (Because that just so happens to be the minimum net worth to be in the top 20% of Americans[0].)

What would you prefer: a world where more or fewer people were able to amass that much wealth? To me, the obvious answer is more.

It does nobody any good for fewer people to be wealthy. Sure, you could look at the numbers and conclude that there's more class mobility, but that's just because more people are poorer, not because more people are making it to $500K.

[0] https://www.businessinsider.com/personal-finance/net-worth-t...

> there's always going to be some level of wealth that's difficult to achieve

Sure, but if that number is such that a significant proportion of society is born with it and pass it along to their children while everyone else can't hope to get there, that's a very different society and social structure than one where a few extremely lucky people happen to achieve it each generation without a self-reinforcing class structure.

> It does nobody any good for fewer people to be wealthy

It could. If we actively redistributed wealth from the top quintile to the bottom quintile, it would do a lot of people a lot of good.

You're totally conflating relative and absolute wealth.

Society is probably better off when the median absolute wealth increases, which will be achieved by more people achieving higher wealth levels.

But as is becoming increasing clear (again), society is worse off when relative wealth distinctions grow (at least, if they grow too large).

If more people make it to $500k, the 5th quintile threshold will move up. That means that the gap between the bottom quintile and the top quintile will increase. We could choose to be happy that more people have made it to $500k, or we could choose to be upset that the gap between the lower 4 quintiles and the upper one has grown.

> But as is becoming increasing clear (again), society is worse off when relative wealth distinctions grow (at least, if they grow too large).

Why is it clear?

Eventually, if the wealth divide becomes too great and ossified, the logical thing for the poor to do is have a violent revolution (since there is no other way to advance their station in life).

This sucks for basically everyone, rich or poor. I think we all have a selfish interest in making sure it doesn't come to that.

Sure, but a big wealth divide does not imply ossification, it just means it's a longer path to get to the top. You can have a big divide and still have mobility.

You could have that, but the US just has a big divide and not much mobility, despite the folk tales that say we do.

This sounds like a very dishonest and bad faith argument. Would you defend a policy against immigration because it may lead to terrorism by nationalists, or would you rather try to solve the real problem?

It seems that you don’t think that society is worse off as relative wealth inequality grows. Society is worse off when people who are mad for whatever reasons start to kill other people. And in any case we should note that it is not actual differences that rustle jimmies, but perceived differences.

> No, I'm saying that there's always going to be some level of wealth that's difficult to achieve.

Social mobility isn’t really about the “difficulty” of achieving any particular level of wealth. It’s about how many people who start at some lower level of wealth achieve some higher level of wealth. Income inequality is also not really about the “difficulty” of something. It’s not exactly “difficult” to inherit the wealth of the wealthiest person in the world, either, but it obviously can only happen to a very small number of people in the world.

> What would you prefer: a world where more or fewer people were able to amass that much wealth? To me, the obvious answer is more.

Fewer. That wealth represents the obligation of other people to labor on behalf of the owner or their heirs. A world with lots of rich people is a world where the poor are born into indentured servitude. Equality allows the newborn to enter life debt free.

I think you have some flawed assumptions.

1. Wealth doesn't require a lot of labor to prop it up, especially not in an increasingly technological world where digital products enable infinite copies at no marginal cost, where code can "labor" in the background without manpower, and where the internet provides infinite distribution to all corners of the globe.

2. Labor today looks significantly different than it did in the past. It's increasingly fulfilling and service-like. In fact, many of the richest people spend exorbitant amounts of time "laboring," e.g. via writing or other creative pursuits.

3. A smaller wealth gap doesn't imply mobility of freedom from debt, any more than a shorter track implies faster sprinters. You can have a more equal society with a narrower distribution of wealth but also greater absolute poverty and misery.

What flawed assumption do you think I'm making?

Wealth represents owed labor, because ordinary people have an obligation to pay rent, and otherwise buy resources from the previous generation of humans, who allocated nature before they were born; so they have an obligation to work for owners; and wealth takes the form of ownership of a share of the work done by them.

> Wealth represents owed labor

That's the flawed assumption you're making. Wealth does not just come from labor. It largely comes from technology. Technology provides leverage. It's not uncommon that a single person today can do something that generates 10,000x the entertainment/utility/productivity/wealth any single person could have in the past.

The average person today is far wealthier than the average person hundreds of years ago, and we have fewer indentured servants, not more. That's because we can generate wealth much more easily today, thanks to technology. As a result, we should (and do) have far more wealthy people.

Also, just mathematically speaking, more wealthy people can't mean more servants. To use an extreme example, a society with 99% wealthy people could only have 1% servants, max.

OK. That's not an assumption though. I explained the reasoning behind that claim. You didn't address it.

> we can generate wealth much more easily today, thanks to technology

This is a different kind of "wealth." I certainly didn't mean to say anything against higher productivity etc.

I was saying that if someone has more wealth measured in dollars than everyone else in society, that person then has an effective power to prey upon or parasitize those others and their children. So that kind of wealth isn't a positive thing. But technology is different.

You're right, let me address your reasoning.

> ordinary people have an obligation to pay rent, and otherwise buy resources from the previous generation of humans, who allocated nature before they were born; so they have an obligation to work for owners; and wealth takes the form of ownership of a share of the work done by them.

Yes this is true. We're all part of a vast, interconnected, capitalistic network ("the market") of who people who own/make useful things and then sell/rent/loan them to others in the network.

But here's what's important: (1) Even if you're rich, you have to spend money on things created by others in the market. (2) Anyone has the ability to become a seller of things in the market.

In other words, it's not about owners vs workers. Rather, it's about consumers and creators. The "and" is important, because everyone is a consumer, plus everyone has the ability to simultaneously be a creator. Being a consumer isn't a bad thing, and doesn't make you subject to rich parasites in any way that I can see. Additionally, the internet and technology are only making it easier to become a creator.

Because wealth is used to capture political power, which in turn is used to help the wealthy hoard even more wealth and retain that wealth.

Furthermore, this often is done at the expense of everyone else. Wealth may not be zero-sum, but that is only true in the abstract sense; I wouldn't be surprised if we found out that most people who are at the topmost quintile acquired their wealth by sucking value out of the system (e.g. rent-seekers, parasitic middlemen, etc.), rather than via value generation.

The way you get to the top is to be a lackey of the extractive mega-elites. I.e., you help enable the parasites, and they give you a cut.

Historically in the United States rich people have had a disproportionate influence on politics, distorting the effectiveness of our democracy.

There is no problem that people are wealthy, the problem is that the wealthy people do not share (accountability, wealth, etc.)

* wealthy here is used in a relative sense, not in an absolute one. Obviously it's good that people in general are wealthy absolutely.

> Why is it a bad thing that so many people are so wealthy?

To be pedantic, exactly 20% are that wealthy.

> The more people who belong to the so-wealthy-it's-hard-to-achieve group, the better.

So-wealthy-it's-hard-to-achieve can only be defined compared to people who can't achieve it. Medieval kings were in that category but lived worse that we do.

Medieval kings definitely lived better than you do.

Did they have good heating or air conditioning or medical care? Running water or plumbing or lighting? Travel was also much much harder.

Instead of the conveniences of modern technology, they had servants. They lived a life of full service, comparable to the most expensive modern hotels.

They had "running water" -- as in servants would run and fetch the water. There was nothing inconvenient about the king's access to water. It would be served to him. How do you get your water?

Fat lot of good that does when you die from a simple infection that penicillin can fix or keel over from a heart attack that is survivable in the modern age.

Look, I'm not saying that everything was better in the medieval ages. But people who think that their own modern lifestyle is comparable to a medieval king are lying to themselves. They heard a dumbass meme and never thought about it critically.

Modern working class people in the wealthy nations do have better _medical care_ than medieval kings did. That doesn't justify broad statements about "lifestyle."

> But people who think that their own modern lifestyle is comparable to a medieval king are lying to themselves.

Medieval kings still ate poor food, you can see it on their teeth, they often had gravel etc in the bread wearing down the teeths etc. The houses, food and clothing, sanitation etc the kings had back then would be illegal to even offer to poor people toady.

According to historian André Castelo, on one particular occasion, [Napoleon's] cuisiniers roasted no fewer than 23 chickens in close succession (Napoleon couldn’t possibly dine on reheated food) until the emperor finally deigned to put his quill down and spare a few minutes for his meal.

Having lots of raw resources doesn't mean you had high quality end products. Also Napoleon wasn't a medieval king, the medieval ages ended 500 years ago, things were much better 200 years ago when Napoleon lived.

When I lived on the minimum my government allows I could still buy higher quality raw ingredients than kings had access to 500 years ago and cook my own meals that are higher quality than was possible back then. It wont be as fancy, no, but it is better in every other regard, and I got access to the different wares year round while they had to account for seasons, spices basically non existent etc.

Why the hell would you think your raw ingredients were higher quality than a KING's?

Was the water cold? Filtered well?

Yes, food and drink was probably better for them, because technology related to those can be replaced by manpower. For air conditioning, healthcare, lighting, or travel they had problems.

> How do you get your water?

I takes me a few seconds to get cold, pure water from my fridge.

The bigger benefit of running water I think is hygiene. I doubt they would have a hot shower. A hot bath would be possible for the king, but not other people. A lot of the servants would probably stink, and the toilets were holes in the side of the castle that went into the street. I think it smelled quite bad.

Hot baths without running water were available to ordinary people. They would boil water on a stove and put it into the bathtub.

The big problem with your argument here is that it's special pleading. You just focus on some technologies that weren't available then. You don't even make an attempt to show that these very few specific things somehow dominate "lifestyle."

I think having full service everything, and no labor obligations, including architects who can build buildings (and know how to make them be cool in summer!) is very much more important to characterizing lifestyle than any specific technology.

>Hot baths without running water were available to ordinary people.

Everyone once in a while, yes, but not for everyday people.[1]

>"lifestyle."

You're right, it does depend on the definition of lifestyle. Some people consider travel to be central to a fancy lifestyle, and that would be hard in the past.

>no labor obligations

Most people on HN likely have no physical labor obligations from employment. We have cushy programming jobs, and many can afford to eat out/order delivery every day and hire a cleaning and laundry service. I can get anywhere nearby in a fast and comfy car, not having to deal with a slow, bumpy, drafty, horse-smelling carriage. I don't even have to walk up stairs, I can take an elevator.

The king has the responsibility of running a kingdom. That sounds pretty stressful to me, much more so that my programming job.

[1] https://www.quora.com/How-often-did-people-in-the-Middle-Age...

The grapes are sour.

> Why is it a bad thing that so many people are that wealthy?

Much more than they’re willing to admit this controversy is about envy on that side. They cloak that envy in a veneer of concern for the poor and concern about the undue influence that money allows; both valid concerns. However, they then target policies that exacerbate poverty and make worse the absolute plight of the poor.

The other side is not willing to admit that for them it’s more than a bit about avarice. They hide that avarice in myths of the self made founder and myths about ethically conscious capitalism; both things you can find laudable examples of. However, many hide their privileged starting points and sell out immediately when profit conflicts with their morals.

An unreachable tier of society indicates a fundamental social injustice. They're in the top 20% of wealth...not intelligence, or in any other factor making them deserving of it. Some of them did work hard, and probably deserve it if you consider hard work deserving of it...but, some people worked harder and didn't make it, so it's not a 1-to-1 equation. So there's a huge element of luck, which is kind of like a slavery for the bottom 80%..just like, you're born with one skin color (luck), you're in the upper class, and own the unlucky people born with another skin color.

Generally, we try to equalize the brutal laws of nature and offer equality of opportunity and try to remove blind, dumb luck from human life...with health care, with insurance, with social equality...sometimes, we succeed, but this is a failure.

"if you consider hard work deserving of it"

Do you mean to say people who do nothing deserve wealth?

LOL where are these "people who do nothing"

There are multiple people I’ve known who do the bare minimum to continue their existence and from the ones I’ve known I’m sure they’d contribute nothing if they were able to. I don’t consider it a particularly valid way to live. There are a lot more who do try to make their lives better though.

So...the idle rich, then?

Sure, free loaders are free loaders. Not sure why you think I wouldn’t uniformly apply that brush. They’re just as invalid in my world view, maybe more even because they have the easy means to do… anything beneficial really.

>who do the bare minimum to continue their existence

So not nothing.

> I’m sure they’d contribute nothing if they were able

So they're not even _able_ to do nothing.

Effectively nothing. You’re splitting hairs.

It seems in context that they're saying that you may or may not consider the fact that you worked hard and then were heartily rewarded to mean that you deserved the result. Especially in the context of many many other people working just as hard and not getting the same result.

That makes more sense, it was more suggesting effort and result aren’t always directly causally connected even if people feel their hard work was what produced the result. Yeah that checks out in my experience.

Who determines who deserves what?

One reason is because it's almost impossible to prevent extremely wealthy people from having undue influence on politics. Another reason would be that most rich people don't allocate capital in a way that's good for society. Some do, most don't. We tend to hear about the ones that do.

> it's almost impossible to prevent extremely wealthy people from having undue influence on politics.

Money is basically an abstract representation of power, so that's almost a tautology.

> Another reason would be that most rich people don't allocate capital in a way that's good for society

This is an interesting claim? What is good for society, and relative to whom?

I suppose the obvious comparison would be relative to "poor" people, but poor people don't really intentionally allocate capital at all by virtue of barely having enough for their immediate needs. Even the selfish rich people tend to invest their capital, usually into lucrative projects that make money by fulfilling some need of society. I guess i wonder if that's so bad, or at least if its worse than the other social classes would do.

"Wealth, as Mr Hobbes says, is power."

-- Adam Smith, Wealth of Nations, 1776

> What is good for society

Decarbonization, novel drug research, preventative medicine, high speed rural broadband, public transport, nutrient rich foods, exercise, education.

Sure those are all good things (although not the only definition of "good"). The question remains: would a different capital allocation achieve them any better

>Even the selfish rich people tend to invest their capital, usually into lucrative projects that make money by fulfilling some need of society

That's not how money is made. You need some kind of parasitic mechanism to enable massive accumulations.

Because when people feel like there is no hope to make it to the top, they become resentful and society starts to break down.

I agree, but if we don’t account for wealth inequality, then we can fail to get there because our government tends to optimize for the already-wealthy at the expense of everyone else. This happens due to special interest lobbyists who make sure that every law tips the scales a bit in favor of their wealthy patrons (it’s like playing hungry hungry hippos on a table that tilts downwards toward the rich). The more inequality we have, the more greater the extent to which the government serves the interests of the wealthy class, which in turn exacerbates inequality. So we should make sure we are actually making more wealthy people and not just helping the already-wealthy grease the pole for others.

> Why should 1 out of 5 people belong to a group so wealthy that saying mobility is difficult should be considered problematic?

Why should some people be able to run much faster than I can?

It's not fair there are many men handsomer than myself. They should be required to wear a mask.

imagine equating wealth to attraction, lol. I understand your point, but what an inane example.

Why is it inane? Handsomeness is something you're born with, and most people assert that wealth is, too.

My handsomeness cannot, in any meaningful way, be taken away to help you be more handsome, no matter how handsome I am or how ugly you are.

Your wealth can absolutely be taken away to help me afford food, shelter, and healthcare.

Furthermore, my handsomeness does not in any way directly gain me the aforementioned things needed to survive and thrive. Your wealth absolutely does.

Handsome people statistically make significantly more money than others. Statistically, people in jail are much less handsome than the general population. Salaries are statistically higher for taller people as well, by the inch.

Forcing Hollywood to hire fewer attractive actors and more unattractive actors will meaningfully transfer lucrative roles to less attractive people.

56% of Americans spend at least one year in the top 10%, and 73% spend one year in the top 20% [1].

[1] https://www.aei.org/carpe-diem/evidence-shows-significant-in...

American mobility isn't bad because people can't make it to the top - you can, more so than almost anywhere in the world.

It's bad because a significant portion of people at the bottom stay stuck at the bottom their whole life. Compared to countries in Europe, this is a lot worse.

That's laughably twisted. Just because someone makes a ton of money in a year (i.e. from inheritance, life insurance, or something else) means absolutely nothing about their wealth.

Inheritance NOR life insurance payouts are considered income by the IRS: https://www.irs.gov/faqs/interest-dividends-other-types-of-i....

Uhh, inheritance definitely counts as income, but I'm not sure what income taxes have to do with what we were discussing. The supposed numbers you pointed to don't come from the IRS.

Can you elaborate or share any studies that show Europe has better mobility opportunities than the US? Also what part of Europe are we talking, Germany? Romania? Portugal or maybe Poland?

That is what the article being commented on, is about, it goes into the results of a study that investigates social mobility per country. More generally, there is also a report by the world economic forum which indexes countries on social mobility, European countries top that list.

Isn't that selling your house to immediately move into another house for the same price?

No, 1031: https://www.investopedia.com/financial-edge/0110/10-things-t...

The other side of the coin would be data about how overwhelmingly likely it is to retain one's membership in the top quintile by mere dint of being born into it.

It seems grotesque that many are born and stay very wealthy while so many others have little to no chance of ever experiencing even modest prosperity.

Another observation: No other quintile has actually grown its percentage of household wealth since the 1970s. The wealthy really have taken all of the gains. Perhaps it would be healthy for us to share some with the people who do all of the physical labor.

https://www.statista.com/statistics/203247/shares-of-househo...

You should probably read the actual analysis (free, 40+ page paper), they accounted for all sorts of things. https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20162015

The story is not so much about the US's (low) social mobility, but about how Americans perceive it. The effect of "Americans are much more optimistic about social mobility" seems to be the same if you look at other measures, like "Probability of remaining in the bottom quintile". (Except Q2 -> Q1 mobility, which Americans seem more pessimistic about for some reason.)

There was a survey[1] a while ago where 19% of Americans said they were in the top 1%, and 20% more believed they would later become the 1%. That adds up to 39% of Americans who are either irrationally optimistic or who failed statistics. It's kind of like how everyone thinks they are an above-average driver and are a top performer at work.

1: https://www.nytimes.com/2003/01/12/opinion/the-triumph-of-ho...

The economist has been pushing a certain political agenda for a while now, I cancelled my subscription a while ago because of this reason

You didn't consider that this quite old publication, renowned for its conservative market-friendly op-eds and neutral-as-can-be reporting, may have realized that wealth inequality and lack of social mobility is a bit more important than they used to think?

I think you're possibly thinking about this the wrong way. The story here isn't "noted communist magazine the Economist is trailblazing by writing about social mobility problems", it's "social mobility has become such a problem that even _the Economist_ is now covering it". This isn't a new concern, by any means, and at this point I would think that _most_ serious media has covered it; the Economist is just grudgingly catching up.

Note that they couldn't resist trying to find a bright side (the numbers are still quite _bad_, just not as bad as people think they are):

> But in Europe, climbing the ladder is easier than most people believe

Thank you. The article is using statistics to lie.

Read the actual study. The people who did the study are knowledgeable about the topic. If a non expert can think of a problem with the paper after a few moments of thinking about it then it is highly likely that person’s objections are not valid and are accounted for in the study.

A person should not read the study or the article and think, “The reason this is nonsense is X.” Rather the thought should be, “I wonder how the study accounts for X.”

This is possible, but it's also possible that they are just lying too

Some studies use household income over years to """prove""" that incomes have either fallen or stagnated. They just outright ignore that the size of the household went from 6+ to about 4. In this scenario a constant household income meant about 50% increase in per Capita income

Are you suggesting that households make use of child labor?

Don't like a third of kids in high school have part time jobs? I believe those rates have been falling too

Plenty of knowledgeable people have very motivated reasoning

Yes. Also, people who know a lot in one area have a tendency to think their 5 minutes of thought on a study in a area they know virtually nothing about is on par with those performing said study. This is especially so on this site. So many people chime in thinking they’ve spotted a fatal flaw without contemplating that those who did the study have almost certainly thought if all the easy potential objections.

> This analysis also ignores government transfers.

AFAIU, by dollar amount government transfers in the U.S. are roughly comparable to those in most European countries. However, a disproportionate amount of those transfers are spent on medical care, a consequence of the high cost of medical care in the U.S. Moreover, a disproportionate amount of government medical spending goes toward the elderly and small, high risk groups. IOW, even at comparable dollar amounts, government transfers in the U.S. simply don't provide the same sort of secure economic footing that people can use to get ahead in some other countries.

Disagree. The biggest transfer is cash through the EITC. If you're eligible for EITC, you're likely eligible for Medicaid which has near-zero out of pocket costs for medical care.

I keep hearing how the US has a "non-existant safety net" yet can help but notice safety net programs are more than half the federal budget.

> The biggest transfer is cash through the EITC.

Per Wikipedia, "At a cost of $56 billion in 2013, the EITC is the third-largest social welfare program in the United States after Medicaid ($275 billion federal and $127 billion state expenditures) and food stamps ($78 billion)".[1] That looks to me like Medicaid spending is nearly 8x that of EITC.

And that's just Medicaid. Medicare spending is greater still, though I don't know the breakdown of Medicare spending by revenue source--FICA vs straight government subsidy. The subsidized component may be less than Medicaid, or may already be accounted for by Medicaid.

[1] https://en.wikipedia.org/wiki/Earned_income_tax_credit Wikipedia's source is http://www.heritage.org/research/reports/2013/08/federal-spe...

How is it problematic and not just an arbitrary metric?

You also presuppose that everything should be relative to absolute terms. What evidence do you have that social mobility should be relative to absolute terms rather than relative to the quintiles defined by the society a given person lives in?

Why would we expect mobility in absolute terms for a society that ranges from 1-100 in wealth, compared to a society than ranges from 40-50? We should expect mobility to be with respect to the society’s wealth range.

I don't think moving to the top 20% is such a strange metric to look at. Isn't that the 'american dream'? This is especially so if you use it as a comparative metric. The study isn't solely looking at this metric to determine whether social mobility in the US is a thing, it is using it as a metric to compare social mobility with other countries, in that sense I think it is valuable.

Is it a fact that the highest quintile is higher in the states? I imagine that Putin and MBS are extraordinarily wealthy

What evidence shows that to be a fact? Do these Americans have proven wealth, or is it all on paper?

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