Friday, November 16, 2007

Economic Mobility in the U.S.

A new study released by the Treasury Dep. is entitled, "Income Mobility in the U.S. from 1996 to 2005." It paints a rather rosy picture & should be read in balance with the new Pew study, "Economic Mobility Project" which places some of the cheery conclusions of the former into perspective . You may read the optimistic conclusions of the former at Anchor Rising.

Both reports base their findings on the same factual materials from the IRS. However, the Pew's interpretations raise questions about the hope of all having the ability to achieve the Americans dream - that of achieving even more economic sucess than their parents.

While 2/3 of American families earn more than the previous generation, this is due to the fact that families are smaller & most women are working. Moving up the economic ladder still depends on your parents' economic status.

The story is different, however, for blacks. Children born in middle-income families are far more likely than whites to slip out of it with their parents unable to pass on gains.

Male earnings have been stagnant over the past generation with only women making gains - due to the fact that more have entered the work force. About a quarter of all children are just "riding the tide" - no economic gains or losses. Five percent of Americans are falling despite the tide - their monies are more than than their parents, but their "economic position" has fallen. One-third are sinking below their parents' level.

While the overall trend looks good for whites & some blacks, one wonders what the future holds when there are no more new large numbers of women entering the work force. Can the American dream continue when segments of society do not reap the same rewards? Will there be any middle-class left in the next ten years? What will be the effect of this on our country?

I remember my son asking me six years ago (class assignment) if I had achieved the American dream. I told him that it was a good question & a hard call. While our family income was higher, that's because I was working & my mom never had. While we took some nice family vacations, we could not afford 3 wks./yr. as my parents' had. 3 kids had gone to private schools & colleges, but I'd be hard-pressed to afford all of these perks for 2. My dad had weekends and holidays off with regular hours. My husband did not. Better off? It's debatable. And can my sons, nieces & nephews hope to achieve the same? So far they have not.

Another disturbing fact is that if my family relocated to Ireland (the OTHER 3 members of my family claim citizenship there), economic mobility is easier. In fact, it's more likely in ost developed countries. There there are no worries about retirement, health care, college costs, & other social benefits. Of course, the trade-off in Eire is lousy weather.
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