U.S. Report: Economic Ladder not more difficult to climb today

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Economic ladder no harder to climb today, U.S. report finds

The working poor have the same chance to move up the socioeconomic ladder today as they did 40 years ago, but the odds of that happening are still pretty low, new research out of two prestigious universities and the U.S. government shows.

A study published Thursday by the National Bureau of Economic Research doesn't back up the conventional wisdom that a widening gap between rich and poor has made it harder for America's working poor to climb the economic ladder into prosperity.

The issue of income inequality has been a frequent problem for politicians from both sides to target of late. The general public has a widespread belief that there are fewer opportunities today for economic advancement through hard work and ingenuity.

1% still unreachable
The data found that only nine per cent of children born in 1986 to the poorest 20 per cent of households were likely to climb into the top 20 per cent. That ratio is remarkably consistent with the historical average — it was only 8.4 per cent for the same group in 1971.

"Absolutely, we were surprised" by the results, Harvard University economist Nathaniel Hendren said. He is one of the report's authors along with Harvard's Raj Chetty, Emmanuel Saez and Patrick Kline of the University of California, Berkeley, and Nicholas Turner of the Treasury Department.

Recent data shows the top one per cent of Americans accounted for 22.5 per cent of income earned in the United States in 2012. That is one of the highest figures since the 1920s and up from a low of 8.9 per cent in 1976, according to a database maintained by Saez.

But the data in the report suggests despite how much richer the ultra-rich are getting, that's not impacting the ability of the poor to move up any more than it always has.

Location matters
The research did find, however, that someone's odds of escaping poverty by moving from the bottom quintile to the top improve greatly depending on what part of the country they're from. As the map above shows, those born in the southeastern part of the country are less likely to move up the ladder. People from the midwest are much more likely to.

A child born into the poorest 20 per cent of families in San Jose, Calif., has better than a 12.9 per cent chance of getting into the top 20 per cent, the research shows. That's almost three times better than the odds of that happening to a person from Atlanta, where the percentage drops to 4.5 per cent.

Among large cities, San Francisco, Seattle, Pittsburgh, Boston and New York all have higher than average levels of economic mobility. By contrast cities such as Detroit, Atlanta, Charlotte and Cleveland have among the lowest.

The findings are open to different interpretations: They could suggest that government programs to help the poor have made little headway in increasing economic opportunity. Or they could suggest that economic advancement would have become harder without such programs.

"My concern is that there may be less mobility in the future," former White House economic adviser Alan Krueger said by email. The cost of a college education, for instance, is increasingly difficult for low- and middle-income families to afford.

Hendren emphasizes that it's still harder to move from poverty to affluence in the United States than in most other wealthy countries. In a 2012 study of 22 countries, economist Miles Corak of the University of Ottawa found that the United States ranked 15th for social mobility among wealthy countries. Only Italy and the Britain ranked lower.

"In some sense, how could it have gotten worse?" Hendren said. "It's not like we're losing the American Dream. We never really had it."

Economic ladder no harder to climb today, U.S. report finds
Horse droppings.
You think it's easier or worse?
Slooooow wallllkin' Walllllter......
And in Massachusetts a single parent of two on state and federal assistance would need to make a $53K salary to match the benefits they receive by not working.
No Party Affiliation
Explains why no one wants to work.
Quote: Originally Posted by taxslaveView Post

Explains why no one wants to work.

Kinda makes a body wonder why 3,202,080 Massachusettsians (Massachsettsers? Massachsettsoids? Massachoo-choos?) are working.

Massachusetts - May 2012 OES State Occupational Employment and Wage Estimates
Quote: Originally Posted by taxslaveView Post

Explains why no one wants to work.

And more and more are choosing not to!
Fewer Americans Blame Poverty on the Poor

As millions of Americans continue to struggle in a sluggish economy, a growing portion of the country says that poverty is caused by circumstances beyond individual control, according to a new NBC News/Wall Street Journal poll.

The poll shows a significant shift in American opinion on the causes of poverty since the last time the question was asked, nearly 20 years ago. In 1995, in the midst of a raging political debate about welfare and poverty, less than a third of poll respondents said people were in poverty because of issues beyond their control. At that time, a majority said that poverty was caused by "people not doing enough." Now, nearly half of respondents, 47 percent, attribute poverty to factors other than individual initiative.

“In hard economic times, people become more sympathetic to the poor,” says Martin Gilens, Ph.D., a political scientist at Princeton University. “In 1995, we were in a period of economic expansion. Even the less well-off benefitted considerably. Now we’re in the most visible period of dire economic circumstances for Americans. If you look around and you see that there’s high unemployment and a generally poor economy, you’re more likely to explain poverty through those factors.”

“As a teenager,” York says, “I thought if you work hard enough in the United States of America, then it’s your own fault you’re poor. I adopted the conservative view around here. But my view has definitely morphed and changed over the years, and I see a bigger picture.”

A slight majority of white respondents still said that poverty was mainly a result of individual failings. But the number of whites who believe poverty is primarily caused by outside forces rose from 27 percent to 44 percent between 1995 and 2014. Among black respondents, 59 percent said poverty is caused in greater part by factors other than personal choice, compared to 45 percent in 1995.
Southerners as well as Americans without college degrees also logged dramatic shifts in the same direction.

Even among white Republican men, who are still more likely to believe that poverty is mostly a result of individual failure to try hard enough (38 percent percent of white men and 27 percent of Republicans said poverty was caused by factors outside individual control), the poll reveals a softening of opinion.

Mike Vergere, 61, a Republican marketing manager in medical manufacturing company in the suburbs of St. Louis, says, “the first issue is that there are not enough jobs in this country that pay enough money so that people can live at the bare minimum to be able to make what we’d consider a living.”


Poll: Fewer Americans Blame Poverty on the Poor - NBC News (external - login to view)

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