How rigid are class structures (as defined by wealth) in the US?

[Atreus21]

Not very, according to Mark Rank and Thomas A. Hirschl.

http://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-to-riches-to-rags.html?smid=pl-share&_r=0

It turns out that 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39 percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and a whopping 73 percent will spend a year in the top 20 percent of the income distribution.

Yet while many Americans will experience some level of affluence during their lives, a much smaller percentage of them will do so for an extended period of time. Although 12 percent of the population will experience a year in which they find themselves in the top 1 percent of the income distribution, a mere 0.6 percent will do so in 10 consecutive years.

It is clear that the image of a static 1 and 99 percent is largely incorrect. The majority of Americans will experience at least one year of affluence at some point during their working careers. (This is just as true at the bottom of the income distribution scale, where 54 percent of Americans will experience poverty or near poverty at least once between the ages of 25 and 60).

A further example of such fluidity can be found in an analysis by the tax-policy expert Robert Carroll. Using data from the Internal Revenue Service, Mr. Carroll showed that between 1999 and 2007, half of those who earned over $1 million a year did so just once during this period, while only 6 percent reported millionaire status across all nine years.

Likewise, data analyzed by the I.R.S. showed similar findings with respect to the top 400 taxpayers between 1992 and 2009. While 73 percent of people who made the list did so once during this period, only 2 percent of them were on the list for 10 or more years. These analyses further demonstrate the sizable amount of turnover and movement within the top levels of the income distribution.

One of the reasons for such fluidity at the top is that, over sufficiently long periods of time, most American households go through a wide range of economic experiences, both positive and negative. Individuals we interviewed spoke about hitting a particularly prosperous period where they received a bonus, or a spouse entered the labor market, or there was a change of jobs. These are the types of events that can throw households above particular income thresholds.

Relevant findings:

12% of us will find ourselves in the top 1% for at least a year at some point.

39% of us will find ourselves in the top 5% for at least a year.

56% of us will find ourselves in the top 10% for at least a year.

73% of us will find ourselves in the top 20% for at least a year.

IRS data shows that between 1999 and 2007, half of those who earned over $1 million a year did so just once during this period; only 6 percent reported millionaire status across all nine years.


Critique:

"44 years of longitudinal data regarding individuals from ages 25 to 60." A bit vague. Where can we look at the actual analysis?

 

[fskimospy]

Not very, according to Mark Rank and Thomas A. Hirschl.

http://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-to-riches-to-rags.html?smid=pl-share&_r=0

Relevant findings:

12% of us will find ourselves in the top 1% for at least a year at some point.

39% of us will find ourselves in the top 5% for at least a year.

56% of us will find ourselves in the top 10% for at least a year.

73% of us will find ourselves in the top 20% for at least a year.

IRS data shows that between 1999 and 2007, half of those who earned over $1 million a year did so just once during this period; only 6 percent reported millionaire status across all nine years.


Critique:

"44 years of longitudinal data regarding individuals from ages 25 to 60." A bit vague. Where can we look at the actual analysis?

I would strongly suggest reading this critique the income mobility argument:
http://prospect.org/article/rich-right-and-facts-deconstructing-income-distribution-debate

Funny thing is that this was written more than two decades ago, which shows how long this kind of argument has been around.

The basic critique is that while an individual might not be in the top 1% of incomes each and every year, their incomes over any given time period still cluster in a relatively normal distribution around their mean lifetime income. What this means is that while someone might not be in the 1% every year for 10 years, it's not like they are going from the 1% to poverty and then back to the 1% again later. Vastly more likely is that they are going from the 1% to the 3% or maybe to the 10th percentile and then back to the 1%.

Additionally, much of the mobility between quintiles takes place by people at the margins of these quintiles, which also overstates US economic mobility.

This would probably be the most relevant quote:

There is considerable income mobility in the U.S., but by no means enough to make the distribution of income irrelevant. For example, Census data show that 81.6 percent of those families who were in the bottom quintile of the income distribution in 1985 were still in that bottom quintile the next year; for the top quintile the fraction was 76.3 percent. Over longer time periods, there is more mixing, but still not that much. Studies by the Urban Institute and the U.S. Treasury have both found that about half of the families who start in either the top or the bottom quintile of the income distribution are still there after a decade, and that only 3 to 6 percent rise from bottom to top or fall from top to bottom.

Basically, there is movement around the edges and for some true economic mobility, but much like your gut and personal experience probably tells you people who start poor tend to stay poor and people who start rich tend to stay rich.

 

[Newell Steamer]

Nothing is holding you back from becoming rich; except your drug addicted, tattoo getting, iPhone using, TV watching, abortion getting ass.

 

[Atreus21]

I would strongly suggest reading this critique the income mobility argument:
http://prospect.org/article/rich-right-and-facts-deconstructing-income-distribution-debate

Funny thing is that this was written more than two decades ago, which shows how long this kind of argument has been around.

The basic critique is that while an individual might not be in the top 1% of incomes each and every year, their incomes over any given time period still cluster in a relatively normal distribution around their mean lifetime income. What this means is that while someone might not be in the 1% every year for 10 years, it's not like they are going from the 1% to poverty and then back to the 1% again later. Vastly more likely is that they are going from the 1% to the 3% or maybe to the 10th percentile and then back to the 1%.

Additionally, much of the mobility between quintiles takes place by people at the margins of these quintiles, which also overstates US economic mobility.

This would probably be the most relevant quote:


Basically, there is movement around the edges and for some true economic mobility, but much like your gut and personal experience probably tells you people who start poor tend to stay poor and people who start rich tend to stay rich.

I figured most of what you said was largely true. Just because people leave the one percent doesn't usually mean they plummet to the 80%.

Some of the other findings were crazy though. 73% of us will be in the top 20% at some point? How wealthy does one have to be to be in the top 20%?

 

[Atreus21]

Nothing is holding you back from becoming rich; except your drug addicted, tattoo getting, iPhone using, TV watching, abortion getting ass.

There is truth in this.

 

[Newell Steamer]

There is truth in this.

Yup, because we all know that $35K a year is more than enough to live life (rent, insurance, gas, food, etc.),.. and, anyone that does any (or usually all) of the things above, is the real reason they can't get by.

So, when someone complains that wages are too low, they are basically saying they spent all their money on the shit above.

 

[fskimospy]

I figured most of what you said was largely true. Just because people leave the one percent doesn't usually mean they plummet to the 80%.

Some of the other findings were crazy though. 73% of us will be in the top 20% at some point? How wealthy does one have to be to be in the top 20%?

You need about two income earners making $60k. One thing to note is that their data goes back to 1970 when quintiles were much more compressed. They didn't start to really diverge until the 1980's.

 

[senseamp]

http://www.nytimes.com/2014/04/23/u...le-class-is-no-longer-the-worlds-richest.html

The American middle class, long the most affluent in the world, has lost that distinction.

While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.

After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.

US is turning into an oligarchy. Study in the OP is flawed, because it looks at income, not wealth.
If I sit on decade worth of capital gains and I sell it in one year, all of the sudden, I got a 1% er income that year, when in reality is it could be a one time windfall that doesn't make me a 1%er in terms of wealth. Authors would then say, see, he was a 1%er for at least a year, upward mobility FTW.

 

[fskimospy]

http://www.nytimes.com/2014/04/23/u...le-class-is-no-longer-the-worlds-richest.html

US is turning into an oligarchy. Study in the OP is flawed, because it looks at income, not wealth.
If I sit on decade worth of capital gains and I sell it in one year, all of the sudden, I got a 1% er income that year, when in reality is it could be a one time windfall that doesn't make me a 1%er in terms of wealth. Authors would then say, see, he was a 1%er for at least a year, upward mobility FTW.

Yeap. One-time events like selling investments to buy a house, getting an insurance payout, etc, etc, are not the same as enduring income levels.

 

[cabri]

Yup, because we all know that $35K a year is more than enough to live life (rent, insurance, gas, food, etc.),.. and, anyone that does any (or usually all) of the things above, is the real reason they can't get by.

So, when someone complains that wages are too low, they are basically saying they spent all their money on the shit above.

And what is keeping a person working at minimum wage?

That person themselves!

 

[fskimospy]

And what is keeping a person working at minimum wage?

That person themselves!

Everyone just needs to get a good paying job, then we'll all be rich!

 

[mrjminer]

I can the courtroom now. "Temporary Affluenza"

 

[Zaap]

I love the left's plan for everyone getting rich: flood the country with illegal labor willing to do everything for peanuts on the dollar. Pretend that has no effect on wages or anything else. Advocate for the government to become huge and overly powerful and hopelessly in debt so that they are a dependent lapdog to those with tons of money...

...somehow get from that that this same entity you've empowered beyond all reason and chained to indebtedness to people with money, will turn around and take the money from those its beholden to, and give it to poor people, making them rich.


Wait for your big master plan to come true- the first parts coming about fairly rapidly (insanely over-powerful government, hopelessly indebted to wealthy people, legions of poor people encouraged to flood in and stretch resources to breaking and lower wages to peanuts...) but somehow the big master-stroke part of the plan- the government making everyone rich, hmmm.... somehow everyone has to wait 40 years, no 50 years, no 60, no indefinitely for that genius part of the plan to happen.


Nice to know the left has figured out such a clever end run around all that old fashioned hard work and responsibility stuff for making it in this world! Now just another 100 years and the big master payoff should start to happen.... maybe.

 

[fskimospy]

I love the left's plan for everyone getting rich: flood the country with illegal labor willing to do everything for peanuts on the dollar. Pretend that has no effect on wages or anything else. Advocate for the government to become huge and overly powerful and hopelessly in debt so that they are a dependent lapdog to those with tons of money...

...somehow get from that that this same entity you've empowered beyond all reason and chained to indebtedness to people with money, will turn around and take the money from those its beholden to, and give it to poor people, making them rich.


Wait for your big master plan to come true- the first parts coming about fairly rapidly (insanely over-powerful government, hopelessly indebted to wealthy people, legions of poor people encouraged to flood in and stretch resources to breaking and lower wages to peanuts...) but somehow the big master-stroke part of the plan- the government making everyone rich, hmmm.... somehow everyone has to wait 40 years, no 50 years, no 60, no indefinitely for that genius part of the plan to happen.


Nice to know the left has figured out such a clever end run around all that old fashioned hard work and responsibility stuff for making it in this world! Now just another 100 years and the big master payoff should start to happen.... maybe.

What evidence is this insane rant based on?

 

[Londo_Jowo]

I don't understand how some people seem to think hard work and sacrifice will not produce success. My life proves that hard work and sacrifice can produce success. Serving 12 years in the military gave me the basic skills to become a field service rep working on much larger industrial equipment similar to what I worked on in the Navy. After 18 years of traveling/working away from home for 10.5 to 11 months a year I landed a supervisor's position in a repair shop. 5 years later I was promoted to a Technical Manager. After being in my current position for 1 1/2 years I will be interviewing this week for a systems specialist position which should include as much as a 10-15% raise.

I've made into the 15% in 35 years having a high school education, hands on experience, and self taught skills. There are currently 8 people following the same path (military service/field service rep) I did with the company, all are making between $55k to $65k* after having 2 to 5 years of employment.

*base salary, overtime and overseas/offshore bonus can bring this yearly amount to the $85k to $95k range.

 

[BoberFett]

Nothing is holding you back from becoming rich; except your drug addicted, tattoo getting, iPhone using, TV watching, abortion getting ass.

Actually those will get you rich if you're one of the lucky few to make it to the inner circle of left-wing driven Hollywood hype.

Those things will however hurt your chances of becoming a well adjusted member of the middle class.

But don't let me spoil your left-wing masturbatory fantasy.

Everyone just needs to get a good paying job, then we'll all be rich!

And why do left wing nutters always frame the debate as being one of two extremes? Either you're poor or you get rich, and if you don't get rich, it's the fault of the rich? Why isn't becoming average enough? No, the left always insists on claiming the system is a problem because we won't all get rich. Well no shit, Sherlock.

 

[fskimospy]

And why do left wing nutters always frame the debate as being one of two extremes? Either you're poor or you get rich, and if you don't get rich, it's the fault of the rich? Why isn't becoming average enough? No, the left always insists on claiming the system is a problem because we won't all get rich. Well no shit, Sherlock.

Actually I don't think I've ever claimed anything remotely close to that. I thought it was clear that my comment was deliberate hyperbole that showed how silly the statement I quoted was.

 

[senseamp]

That's next step for rigth-wingers, now that it's obvious to everyone that trickle down isn't going to work, is to get Americans to accept growing inequality and a new oligarchy as OK.

 

[Kadarin]

That's next step for rigth-wingers, now that it's obvious to everyone that trickle down isn't going to work, is to get Americans to accept growing inequality and a new oligarchy as OK.

Expect to see a subtle campaign promoting the concept that ideas within the Constitution are somehow "un-American".

 

[BoberFett]

Actually I don't think I've ever claimed anything remotely close to that. I thought it was clear that my comment was deliberate hyperbole that showed how silly the statement I quoted was.

That may be, but there's always the undertone of seriousness to such comments. That somehow if we don't all get rich through hard work, then clearly the system is broken and hard work doesn't accomplish anything. Many seem to believe that.

Certainly the economy has been going through serious changes the last few decades, with the value of labor going down quickly while the supply of labor (globally) increased far faster than the demand for goods produced by said labor. But why disparage hard work?

 

[BoberFett]

That's next step for rigth-wingers, now that it's obvious to everyone that trickle down isn't going to work, is to get Americans to accept growing inequality and a new oligarchy as OK.

Expect to see a subtle campaign promoting the concept that ideas within the Constitution are somehow "un-American".

The "liberal" circle jerks in this forum get tiresome.

 

[fskimospy]

That may be, but there's always the undertone of seriousness to such comments. That somehow if we don't all get rich through hard work, then clearly the system is broken and hard work doesn't accomplish anything. Many seem to believe that.

Certainly the economy has been going through serious changes the last few decades, with the value of labor going down quickly while the supply of labor (globally) increased far faster than the demand for goods produced by said labor. But why disparage hard work?

I don't believe that everyone needs to get rich through hard work, as life is filled with unfortunate occurrences. Our system seems to have a lot more fundamental problems than that though.

I know it is something that everyone is talking about, but Capital in the 21st Century is a pretty compelling read.

 

[berzerker60]

That may be, but there's always the undertone of seriousness to such comments. That somehow if we don't all get rich through hard work, then clearly the system is broken and hard work doesn't accomplish anything. Many seem to believe that.

Certainly the economy has been going through serious changes the last few decades, with the value of labor going down quickly while the supply of labor (globally) increased far faster than the demand for goods produced by said labor. But why disparage hard work?

I don't think the point is to disparage hard work, but rather to break people of the 'just world fallacy' that says that hard work leads to success, and therefore unsuccessful people must not be working hard. It's the second half of that argument that's so toxic, even though the first half is largely true. Most of the time, hard work is vital for success, and absolutely should be celebrated - but there are lots of people who work hard and fail / are poor, and plenty of the super 'successful' (measured in terms of money, for example) who basically inherited their success while working no harder than anyone else.

Because that's the narrative that the powerful depend on to keep their grip on power even when by any meritocratic method they wouldn't be nearly so disproportionately rich/powerful - it keeps the poorer people divided against themselves and shuts down arguments that maybe we ought to be promoting equal opportunity, rather than giving some people enormous advantages.

 

[BoberFett]

I agree fully on that. Hard work is not guarantee. Even in the face of hard work and making all the right choices, people can still fall down through no fault of their own. But there seems to be an attitude that because hard work is not a guarantee, that we should dismantle capitlism.

And while the right wing (including both R and some D) attempts to maintain the false narrative that failure must indicate poor choices or laziness, the left also seems to be attempting to build a false narrative that there is actually no such thing as merit, and that anyone who has more than their "fair share" (whatever that nebulous amount may be) is merely due to luck or corruption, and couldn't possibly be due to hard work and making the right choices. Therefore we need to punish that person, and redistribute what they didn't earn.