There is More Income Mobility than You Think
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…
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. (NYT)
It’s also worth noting that these findings refute the idea that the very wealthy remain that way throughout their lives as the result of some kind of locked-in caste system.
According to the research here http://taxfoundation.org/article/income-mobility-and-persistence-millionaires-1999-2007, only 6% of earners were millionaires throughout all 9 years of the study. Roughly half were millionaires for only one year.
Seems like, according to all measures, wealth is more transient than we are being led to believe.
Many social scientists pay much attention on inequality, but I think this problem has been gone too far in overlapping the real issue: mobility. If a society can ensure that everyone has equal change to be successful, we then have no reason to blame them for being rich. Apparently, we are heading to a intensive global competition not a communism society.
Agreed. An equal opportunity is prerequisite.
Actually we can read a article published in 2013 by Dr. Xie, a sociologist at Univ. of Michigan. He also demonstrates that social mobility in the U.S. is not as stagnant as many people imagine.
Agreed. Equal opportunity is the prerequisite.
It may be driven by the strong consumption power.
Only if everyone has equal opportunity.
73% is a huge number– even more than I would have guessed. This seems to directly contradict the dominant narrative of inequality one hears everywhere nowadays!
Exactly.
You stressed the mobility of the top 20 percent
What is the household income of the 20th percentile probably $75,000 which does not give much room for a family to save
It is the ever-growing amount of wealth owned by the top 10 percent , not the top 20 percent, as you referred to
Actually it is the top 5 percent or more accurately one percent that has accrued most of the income gains
The social income transfers you wrote about helps level the playing field a bit more but that growth is not organic or natural through people utilizing their talents
Rather it is unnatural inorganic growth through coerced wealth transfers
Don Levit
Does anyone know if Hirschl’s mobility statistics strictly deal with regular income, or do they include one-time windfalls such as, say, inheriting a home? Not opposing the overall point, just curious.