One thing to be aware of is that the range of incomes in many countries is much more compact than the US. If you define social mobility by the ability to move from the bottom segment to the top, it requires a much smaller change in income in most industrialized countries than in the US.
For example, for the average person in Denmark to go from the bottom 10% to the top 10% of income requires earning a mere $40k more income. In the US, you would have to earn $90k more income. Consequently, it takes considerably more effort in the US to increase one's income in the US to the point where it would count as "social mobility" than in many countries even though you would be much better off in the lesser quintiles in absolute terms.
In short, there are many countries where moving from $20k to $40k is considered "socially mobile" but also others where moving from $20k to $60k income is not because the top bracket is $80k. Most people would probably prefer to live in the latter country. It may be a little harder to reach the $80k than $40k to meet the definition of "socially mobile", but in absolute terms they are far better off with $60k of income regardless of the definition of social mobility.
True and to the point, as far as it goes. But I think you discount the importance of relative change a bit too much.
Imagine a country with a fiery economy: within a generation, real incomes will triple or quadruple, and at an equal factor across all income groups. Let's say also this country also has an incredibly rigid caste system, where you can predict that a person falls will fall within the same single percentile as their parents with 100% accuracy.
Your absolute measure fails to capture a situation that I think you'd agree shows very little income mobility, while the one you're criticizing succeeds at it. What I think you're getting at is that people can be much better off despite lack of intergenerational income mobility. Sure.
But people are looking for a measure that will capture the fact that some societies have parental income that's much more predictive of children income than other societies. It's an interesting reality that many people find problematic, and it has a real impact on other social systems--race, class, geographic mobility, educational outcomes, and elite networks--that are very interesting to analyze and potentially useful to understand.
> In short, there are many countries where moving from $20k to $40k is considered "socially mobile" but also others where moving from $20k to $60k income is not because the top bracket is $80k. Most people would probably prefer to live in the latter country.
I don't think that's actually true. Having the rich be a lot richer has a lot of sociological impacts, particularly within a democracy.
Is there data on this? I'm having trouble finding it. Do we think that, say, more people move from US -> France than the opposite every year? I'd bet money on the reverse.
It sounds like you're looking to feed confirmation bias. Picking a country that most Americans love to hate isn't really going to give you accurate results. Try comparing the U.S. to Germany and Switzerland, or the U.S. to the Scandinavian countries.
Also, keep in mind that statistics on emigration only show you how many people moved between the countries. It doesn't show you whether people in Germany are more likely to be curious about the U.S. than vice versa, or whether the people are happier and have more freedom.
I am a European living in the U.S., and I agree the U.S. is a terrific country to be in if you are making a lot of money. But most people don't. The poor here are far worse off (and the rich are far better off--indeed, that is the definition of inequality.)
I picked France at random from the set of rich Western European countries. It was just the first one that popped into my head. /shrug/
I would predict the same outcome for England, Germany, Switzerland or Sweden.
Too your second point we were talking about where people would prefer to live not how happy they were or how free they were. Perhaps people would prefer to live someplace where they are less happy or free if it came with other benefits. Who knows.
Looking at net immigration rates is, I think, the best way to determine where people prefer to live.
> Looking at net immigration rates is, I think, the best way to determine where people prefer to live.
I don't think it is. I would prefer to live in the U.S. because my family lives here, but it has been tremendously difficult for me to get here, and has taken many years. Similarly, it's quite hard to just move to Germany or Sweden if you have no connection to those countries.
I wasn't calling Sweden or Germany poor. That would quite obviously be a silly thing to say.
The US, Sweden & Germany are all pretty rich and they all fairly restrictive in terms of how difficult it is to legally migrate to them. I thought that was what you means when you said "it has been tremendously difficult for me to get here" and "it's quite hard to just move to Germany or Sweden if you have no connection to those countries."
You seem to equate riches with inequality. Just because a country is richer doesn't mean there is more inequality. In fact, many of the poor countries have startling inequality in comparison.
Now compare Western Europe and the U.S.: They're capitalist, but it's hard to find "empirical" evidence that unbounded Darwinian capitalism is superior in this part of the world, since most of these countries top the U.S. in nearly every measure of human development--life expectancy, literacy, economic freedom, social mobility, and so on.
And yes, I'm nearly certain, more people move from Western Europe to the US than vice versa. Perhaps all of those measures of human development aren't all they're cracked up to be in comparison to other things?
Or, perhaps, it's easier for someone of means to emigrate to a country where they can earn more money than it is for someone with few means to emigrate to a country where they would be better off.
When I say better off, I'm talking about quality of life, not money. Surely many of the American poor would want to live in Sweden if they knew how high the quality of life is for low-income earners in comparison to theirs -- but because they are poor they have very little chance of ever getting emigrating to Europe.
Conversely, someone who's fairly successful in Sweden might realize that they could be earning much more money in the United States--because of the income inequality--and thus might want to emigrate to the U.S. Chances are they'd have a much better chance of getting there, too.
I live in the U.S., but grew up in Europe. If I didn't have skills that were highly sought after, I wouldn't want to live here. (FWIW, the bigger reason I do live here is that I have immediate family in the states.) I'll bet you that's the case for most people emigrating here from Western Europe.
So you're saying that the net positive migration from countries like Sweden to countries like the US is due to the fact that generally only relatively successful people have the ability to immigrate? And that if all classes of society were able to move freely that the net migration would be in the other direction?
I'm willing to admit that this is possible, but at this point that sounds like a hypothesis than anything approaching a definitive statement about how reality actually works.
> So you're saying that the net positive migration from countries like Sweden to countries like the US is due to the fact that generally only relatively successful people have the ability to immigrate? And that if all classes of society were able to move freely that the net migration would be in the other direction?
Yes.
> Do you have any evidence to support this claim?
I don't. Just a lot of anecdotal evidence from a life spent living in different European countries and U.S. states, talking to people and learning about their lives.
I do think that logic follows that a society with both a high standard of living and high equality would be a more attractive target for a low-income earner than one with a high standard of living but high inequality, but I am unsure if this means that, for example, Americans would actually want to emigrate to Sweden if they didn't know much about it. There are still a lot of misconceptions about what "socialism" means in Europe, how much freedom the U.S. has and Europe doesn't, and so on.
(I think that this is part of the reason that, if true, the U.S. sees more traffic from Europe: The entire Western world grows up with American movies, TV, songs, etc., but many Americans don't know very much about Europe other than that they used to be the HQ of nazis and other socialists. But yes, it's just speculation.)
No really. All I'm saying is that if you could perhaps clarify the point you were trying to make it would make it easier for me to respond intelligently. Your wording was just a bit confusing?
Actually, the studies adjust the incomes for purchasing power parity, so it is not just nominal income. Costs of living and similar are built into the relative income quintiles and deciles when comparing between countries.
The US also has a wider income range because of the enormous differences in cost of living within the country itself, in large part due to its size, which skews the result. The top quintile in one region of the US may be the middle quintile in another.
Yes, after reading the article I'm not sure how they correct for the stark differences between places. Are the quintiles done locally or nationally? If they're done locally, then people who migrate are a problem for the statistics: it's very easy to move from bottom quintile to top quintile, just move from Palo Alto to rural Oklahoma. Or by excluding people who migrate, perhaps there are skewed effects.
But if the quintiles are national quintiles, not local quintiles, variation due to location still throws things off. The group of people in the 3rd national quintile living in Silicon Valley probably have quite different statistics than the group of folks in the 3rd national quintile living in a mid-size town.
One of the criticisms of the study is just this point. A lot of the "upward mobility" is people moving to more expensive areas where they get somewhat higher pay but the cost of living is much higher. They may well be worse off, but in $USD terms they have moved up.
Costs of living and similar are built into the relative income quintiles
One way to break a correlation that uses an inflation index is to look at or carve out asset inflation. Once you correct for asset inflation (which is NPV'd income), only then will you have properly adjusted income measures.
"America is the wealthiest nation on Earth, but its people are mainly poor, and poor Americans are urged to hate themselves. To quote the American humorist Kin Hubbard, “It ain’t no disgrace to be poor, but it might as well be.” It is in fact a crime for an American to be poor, even though America is a nation of poor. Every other nation has folk traditions of men who were poor but extremely wise and virtuous, and therefore more estimable than anyone with power and gold. No such tales are told by the American poor. They mock themselves and glorify their betters. The meanest eating or drinking establishment, owned by a man who is himself poor, is very likely to have a sign on its wall asking this cruel question: “if you’re so smart, why ain’t you rich?” There will also be an American flag no larger than a child’s hand—glued to a lollipop stick and flying from the cash register.
Americans, like human beings everywhere, believe many things that are obviously untrue. Their most destructive untruth is that it is very easy for any American to make money. They will not acknowledge how in fact hard money is to come by, and, therefore, those who have no money blame and blame and blame themselves. This inward blame has been a treasure for the rich and powerful, who have had to do less for their poor, publicly and privately, than any other ruling class since, say Napoleonic times. Many novelties have come from America. The most startling of these, a thing without precedent, is a mass of undignified poor. They do not love one another because they do not love themselves."
I didn't claim most people are rich. Rich people have a lot more influence over our "democratic" system, and they seem to be the ones that want to preserve the status quo of massive inequality.
Big takeaway: the USA is about as socially mobile as it was a generation ago. But that's only because the USA has never been as socially mobile as it imagines itself: some or most European countries have exceeded it in mobility for a long period of time.
"Most likely...The correlation between vast wealth accruing to a tiny elite and the ability of people to move between the rest of the rungs of the income ladder may be small—at least for now."
And there's the crux of the matter. Even if that correlation remains small, the top rung of that ladder is so far out of reach of everyone else, -and- incorporates an insanely disproportionate amount of money, power, and influence, that it will likely remain forever out of reach, while allowing for policies that markedly worsen the lives of those on lower rungs.
Which speaks nothing of policy changes today, and what effect it will have on the future. Nor what disruption will come about to ensure that that trend continues (we are given no data points in that post other than those two, and we had both the PC revolution and the internet in between 1982 and 2011 to massively shake up entire industries).
More to the point, it speaks nothing on how conditions for those not among the elite have changed in that time, and how they will change over time.
From the paper:
For example, if one defines mobility based on relative positions in the income distribution – e.g., a child’s prospects of rising from the bottom to the top quintile – then intergenerational mobility has remained unchanged in recent decades. If instead one defines mobility based on the probability that a child from a low-income family (e.g., the bottom 20%) reaches a fixed upper income threshold (e.g.,
$100,000), then mobility has increased because of the increase in inequality. However, the increase in inequality has also magnified the difference in expected incomes between children born to low (e.g., bottom-quintile) vs. high (top-quintile) income families. In this sense, mobility has fallen because a child’s income depends more heavily on her parents’ position in the income distribution
today than in the past.
For example, for the average person in Denmark to go from the bottom 10% to the top 10% of income requires earning a mere $40k more income. In the US, you would have to earn $90k more income. Consequently, it takes considerably more effort in the US to increase one's income in the US to the point where it would count as "social mobility" than in many countries even though you would be much better off in the lesser quintiles in absolute terms.
In short, there are many countries where moving from $20k to $40k is considered "socially mobile" but also others where moving from $20k to $60k income is not because the top bracket is $80k. Most people would probably prefer to live in the latter country. It may be a little harder to reach the $80k than $40k to meet the definition of "socially mobile", but in absolute terms they are far better off with $60k of income regardless of the definition of social mobility.