To maintain that rising inequality is a threat to the American Dream, the president insists that it is reducing income mobility. Here the evidence is just as weak. According to Scott Winship, the gap between the middle class and the poor hasn’t grown much during the past few decades. It has been the very top of the income distribution that has gained the most. Has this diminished mobility?
Winship crunched the numbers for men born in the early 1980s, who experienced widening income inequality, and compared them to men born around 1950, and found almost no difference. “Among those raised in the bottom quarter of the family-income distribution,” he writes in the journal National Affairs, “the fraction escaping the bottom fourth of earnings as adults fell from 63 percent to 60 percent, a decline too small to be reliably different from zero.”
America does indeed have a serious mobility problem, especially in getting people out of poverty. But it has nothing to do with a small fraction of people being spectacularly rich.
Mark Zuckerberg could be stripped of all his wealth tomorrow, and it wouldn’t help anyone further down the income ladder. It wouldn’t increase wages, or reduce out-of-wedlock child rearing, or lead to less incarceration, or revive the work ethic, all of which would enhance mobility and lift more people into the middle class. It would just make Mark Zuckerberg poor.
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