Before the 1990s, researchers tended to put the correlation between parents' incomes and their children's at around 20 percent, implying a high degree of mobility between generations. In the 1990s...experts tended to put that figure at about 40 percent. Recent estimates run as high as 60 percent.
Mobility has not necessarily fallen, but techniques for measuring income mobility have improved. Americans must now admit that our society is a lot less economically mobile than we once believed. In fact, we're lower in the ranks than Canada, all Scandinavian countries, and maybe even Britain (!).
In America, more than in other advanced economies, poor children stay poor.
While Crook suggests retaining the estate tax, expanding the Earned Income Tax Credit, and sharing some of Harvard's $30 billion endowment with universities that actually need money, there is another solution. Give up.
Enter Despair, Inc., a company with a firm understanding of reality and a line of products that does, too. Their best-sellers are posters that put an Adbusters spin on those corny motivational 'cheer-ups' that don the hallways of corporate offices. Here is Despair, Inc.'s mission statement:
MOTIVATION. Psychology tells us that motivation- true, lasting motivation- can only come from within. Common sense tells us it can't be manufactured or productized. So how is it that a multi-billion dollar industry thrives through the sale of motivational commodities and services? Because, in our world of instant gratification, people desperately want to believe that there are simple solutions to complex problems. And when desperation has disposable income, market opportunities abound.
AT DESPAIR, INC., we believe motivational products create unrealistic expectations, raising hopes only to dash them. That's why we created our soul-crushingly depressing Demotivators designs, so you can skip the delusions that motivational products induce and head straight for the disappointments that follow!
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Maybe trying to correlate mobility with the amount of money one makes is the wrong idea. Instead why not focus on IQ or education.
Is success only based on the amount of money one makes? I once read a book titled, The Millionaire Next Door that has data that shows most millionaires do not make astronomically high incomes but instead knew how to save and invest the little income they had. These millionaires also were not raised by millionaire parents.
Also, there may be so many people that do not make more money or are more succesful than their parents that it washes away any data there is on those that do become successful. I was raised by a single mother while my father was in prison, yet know I am working on a Ph.D. I would call that success.
Kevin, You make a good point. How much income mobility can we expect (i.e., is growth really infinite)? But I think it is important to recognize (despite the beliefs of many Americans) that the American Dream is not actually accessible to everyone. The 'stickiness' in the top and bottom income brackets in the U.S. is something Canadians point out to me all the time. Those millionaires next door as well as your own intellectual mobility (while impressive!) may be the exception rather than the rule...