Comment by DanielBMarkham | Hacker News Reader

Comment by DanielBMarkham | Hacker News Reader

Once again, this is a statistical aggregate. As difficult as it might be, please do not picture a filthy rich old white Scrooge character stealing cookies from poor orphans on the street when you read numbers like this. As the author clearly indicates, these numbers are in relation to averages, not real people. Movement between income groups is an area of current study, but I've seen numbers as high as 40% moving from one statistical group to another inside of a year. The rich may indeed be getting richer, but it may only be a small percentage of them who stay in that group over a period of decades. There might be many new arrivals and many people leaving each decade.

Of course, it's perfectly fair to say that the disparity is important whether or not the same people are involved year-to-year or not. I'm not trying to get into that part of the discussion. I'm simply trying to point out the difference between stereotypes and averages and real, live people. There are lies, damned lies, and statistics. (old joke)

I actually think you're wrong with regard to the rich getting richer not being the same people from year to year, at least for the majority of rich Americans. Yes, movement is possible, but most of this happens between the upper and lower middle class. At extreme ends of the economic spectrum this mobility is severely diminished. Even across generations. This study is focused across generations, and shows that adult children of parents in the top 20% are 39% likely to be in the top 20%. Likewise adult children of people in the bottom 20% are 42% likely to be in the bottom 20% [1].

It stands to reason, then, that if the children of top earners are likely to stay in that income bracket, that people in the top income bracket are also likely to stay there.

Notice that the top 4% mentioned in this article fit quite comfortably in the top 20% of income earners. And through extrapolation, I imagine that the movement among the top 4% is even more severely diminished. It would be truly exceptional for even the child of someone in the top 4% to find themselves in poverty or for that matter the middle class.

[1] http://www.economicmobility.org/assets/pdfs/EMP_Across_Gener... (PDF! page 5)

So to put it another way the study says that 61% of children born to parents in the top 20% fall out of it, and 58% of children born into poverty rise out of it. Sounds like pretty good numbers to me.

For people unable to look at the source, here is a direct copy of the chart in question:

http://i.imgur.com/DV5JZ.png

As you should see, it's not really that simple to say "39% stay and 61% fall out." While technically correct, falling isn't equally distributed over the other quintiles. The children of the top quintile are only 9% likely to fall in the bottom quintile and the children of the bottom quintile are only 6% likely to rise to the top quintile.

And really, the top comment was trying to claim the parents migrated income brackets. The numbers here are about children inheriting the incomes of their parents. This data strongly suggests the wealth gains over the past decade are in fact concentrated in the already wealthy. Not only that, but it shows the concentration of wealth has momentum that lasts for generations.

The United States today still has tremendous opportunity for income mobility compared to many other parts of the world and other parts of history. But these articles are showing a disturbing trend that this may not be sustainable.

Children learn most of their behavior from their parents, 58% of poor children performing better than their parents sounds like a good number when you look at it that way.

I only said there was a 58% chance they'd rise out of poverty, by which I meant they'd rise out of the bottom quintile. I think that being born dirt poor, and moving into not dirt poor is a very good goal for the majority of people.

Also 6% of people born into poverty eventually make it to the top quintile, that's higher than I would have expected.

We shouldn't pretend that wealth doesn't give huge natural advantages, but we also shouldn't pretend that we are going to be able to eliminate those advantages without eliminating wealth.

In this case it's especially relevant: how many of those top 5% are in the top 5% because they were able to grab a disproportionate portion of the economy's gains? In other words, a lot of people will look at this and think, "Rich people used their power and influence to fleece the economy," when in many cases it might be, "People who won when others lost are now rich." Most likely it was some of each.

Good point about statistics not being people, but you should really cite your own statistics if you want to suggest that movement between income groups would paint a significantly different picture than the one presented here.

One thing that has always bothered me about these reports is that they are not longitudinal, as you point out. We say "the poor are getting poorer" but is it the same poor person that got poorer, or did that poor person discover his inner tycoon and move up while some terrible, lazy deadbeat took his place in the income ladder? If it's the latter, would that not be considered a success despite the fact that "the poor have gotten poorer"?

In particular, "[immigration] disproportionately brings low-skill workers into the U.S. instead of moving jobs abroad. As immigration increases the relative supply of low-skill workers, the income of individuals at the 20th percentile declines."

http://www.frbsf.org/publications/economics/letter/2007/el20...

Why do I get the feeling that you already have answered the question for yourself? Yes of course only the terrible, lazy deadbeats fall on hard times. At least it is very convenient to think so...

Reply on news.ycombinator.com