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2006-04-27 Home Front: Culture Wars

America's Rags-to-Riches Deam an lllusion, Says Study

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Posted by Fred 2006-04-27 00:00|| || Front Page|| [4 views since 2007-05-07] Top

#1 Very true Fred. I was very poor as a child and decided early on that physical labor sucked. I got an education and now am solidly middle class and have a great and prosperous life. A lot of people stay in the same strata that they were born in. But in America, the opportunity to move up is always there. Get an education. Get a job. Be productive and you will do well. Otherwise, no one is gonna help you be lazy.

Posted by DarthVader 2006-04-27 00:30|| 2006-04-27 00:30|| Front Page Top

#2 "Consider a rich and poor family in the United States and a similar pair of families in Denmark, and ask how much of the difference in the parents' incomes would be transmitted, on average, to their grandchildren,"

I'll call this for what it is, Bullshit.

You make a study of inter-generational economic outcomes and 'prove' that in Denmark the opportunity for a poor kid to get rich are greater becuase less money is passed down through the generations.

It does no such thing. All it does is identify a factor at work in determining the outcome. Without knowing the other factors at work and their relative importance. It's impossible to draw any conclusions from this piece of data.

More poor Danes get rich cos more of them buy lottery tickets. It's impossible to refute this statement from the evidence presented.

Posted by phil_b">phil_b 2006-04-27 00:32|| http://autonomousoperation.blogspot.com/]">[http://autonomousoperation.blogspot.com/] 2006-04-27 00:32|| Front Page Top

#3 Article: The research was based on a panel of over 4,000 children, whose parents' income were observed in 1968, and whose income as adults was reviewed again in 1995, 1996, 1997 and 1999.

This is the crucial part. The thing with many social science studies is that they're more socialist than scientific. Is the sample representative of the population at large? Or is it not? The most accurate way to track these things with be with the help of IRS data, with the names blanked out.

Posted by Zhang Fei 2006-04-27 00:34|| http://timurileng.blogspot.com]">[http://timurileng.blogspot.com] 2006-04-27 00:34|| Front Page Top

#4 Good call Zhang. Maybe the sample was offspring of Berkley faculty.

Posted by phil_b">phil_b 2006-04-27 00:48|| http://autonomousoperation.blogspot.com/]">[http://autonomousoperation.blogspot.com/] 2006-04-27 00:48|| Front Page Top

#5 phil_b: Good call Zhang. Maybe the sample was offspring of Berkley faculty.

Well - I have many questions. Did they control for race? Are they comparing welfare recipients in the Bronx with the Rockefellers? Or are they comparing the working poor with the Rockefellers?

Posted by Zhang Fei 2006-04-27 00:51|| http://timurileng.blogspot.com]">[http://timurileng.blogspot.com] 2006-04-27 00:51|| Front Page Top

#6 These types of articles have been seen and debunked on the Net since forever. All America needs to know is that a low-income to middle-class American is a rich man, a milionaire, or better by the standards of many nations, espec in the Third World, and are still better off than those in dev or major non-American nations, includ those where national personal income levels are allegedly roughly par. At last check, 18 of the world's top 25 Billionaires have American citizenship andor permanent residences in America - ditto for the majority of world's top 25 millionaires.

Posted by JosephMendiola 2006-04-27 01:06|| 2006-04-27 01:06|| Front Page Top

#7 So is he saying that rich, smart, Europeans immigrate to the US, leaving room for other Europeans to move up?

Posted by Penguin 2006-04-27 02:40|| 2006-04-27 02:40|| Front Page Top

#8 The one thing they hammered into me was to get an education.

There's more to it than that. You can have 4 advanced degrees in 4 different fields, but what matters is what comes after. In America, it's easier to actually do something with that education and it's easier to succeed if you've got the right stuff, with a little bit of luck thrown in. This is not by accident. The underlying conditions are such that this is possible in the US, and less so in other places.

Compare to Europe. Education is basically free. You can study what you want, for however long you want. But the difference is that even if you have the advanced degrees and all the right stuff, your chances of success are less than that of your counterpart in the US, whatever the field. (Anyone who discovers the reason why this is so, will achieve a greater level of wisdom. It's not difficult actually. It has to do with government, i.e. less of it, and non-socialist economics.)

I've found that degrees from prestigious universities such as Harvard, Princeton, et al, do not impress in Europe. And it's not because they're American. It is because having the right connections is still the most prevalent way of landing a job in Europe. It doesn't matter that you're smarter than Einstein. If you don't know anybody, you're out of luck, or at least, it's that much harder for you. (That's a bit of an exaggeration. If you're a European smarter than Einstein, than you get snapped up by American firms and universities to do research. But the slightly-less-smarter-than-Einsteins who don't happen to know any bigshots, are out of luck.) To be fair, obviously connections also matter in the US, but it's not to the same extent.

You don't have to look very far to see yet another big difference between the US and Europe. The French government took the necessary measures to relax the labour market rigidities that are the cause of so much pain in France and all over Europe. And what happened? Supposedly intelligent, well educated students rioted in the streets and basically guaranteed that they will remain underemployed for decades to come.

One last thing. Can you picture a place in this world that allows you to go to law school, pass with flying colours, graduate top of the class, but won't allow you to actually practice law? ...or medecine? ...nursing? Such a place exists...in Europe. Gives whole new meaning to the term closed shop. Can you imagine graduating top of the class in the US and unable to practice law? That's one of those underlying conditions that allow people to succeed in the US.

God, you can write a book on this topic.

Posted by rafael 2006-04-27 02:45|| 2006-04-27 02:45|| Front Page Top

#9 So is he saying that rich, smart, Europeans immigrate to the US, leaving room for other Europeans to move up?

I'm not sure if that was snarkiness on your part, but that's exactly what is happening. Smart, industrious, inventive Europeans naturally gravitate to the place where their talents can be put to good use, and where they have a reasonable chance of being well rewarded for their efforts.

The rich stay behind though, because there's more serfs to be had in Europe than in the US. But that's the uglier side of my theory, and we don't wanna go there.

Posted by rafael 2006-04-27 02:52|| 2006-04-27 02:52|| Front Page Top

#10 Any controls in this "study" for marrying into money?

How about IQ testing on the kids in 1968? Was that factored in?

How about regional differences? Gender differences? Overall performance of the economies involved? Movement across national borders? Short-term economic trends at the sampling times?

Did anyone do a meta-analysis of the statistical significance, or of long term benefit to society, of any small percentage of people making it to the top 5% vs an even greater number making it from poor to middle or upper middle class?

What percentage in the society during that time period stayed stagnant or declined in their economic status?

This "study" is another object example of how social science with an agenda is almost never real science.

Posted by no mo uro 2006-04-27 06:24|| 2006-04-27 06:24|| Front Page Top

#11 Can you picture a place in this world that allows you to go to law school, pass with flying colours, graduate top of the class, but won't allow you to actually practice law? ...or medecine? ...nursing? Such a place exists...in Europe. Gives whole new meaning to the term closed shop. Can you imagine graduating top of the class in the US and unable to practice law?

It's the same reason why people with great personal wealth (Barbara Streisand, Ted Kennedy, Warren Buffet) often favor steeply progressive income taxes and punitive estate taxes: "I got mine, and I don't want you new-money peasants spoiling the exclusivity at the country club!"

Posted by Mike 2006-04-27 06:42|| 2006-04-27 06:42|| Front Page Top

#12 The likelihood that a child born into a poor family will make it into the top five percent is just one percent

Note the "top five percent". No mention of the odds of making it into the top FIFTY percent, or even of just improving your lot in general. It's always been the case that it's very difficult to make it to the upper 1/20th of wealth from humble beginnings; the question is whether you can improve your condition.

And, frankly, I wonder what the odds of a poor kid in Denmark getting into the top five percent. Or France, or Germany, or...

Posted by Rob Crawford">Rob Crawford 2006-04-27 07:16|| http://www.kloognome.com/]">[http://www.kloognome.com/] 2006-04-27 07:16|| Front Page Top

#13 I suggest an experiment. We could have two big countries, say as big as continents, so rich in resources they can export food to the rest of the world, both made up of many different ethnic groups. Then one could be run under the American system. The other would be run under a system dedicated to equality, taking from each according to his ability and giving to each according to his needs. Let's start the experiment in 1900 and see how it turns out 100 years later.

Posted by Nimble Spemble 2006-04-27 07:31|| 2006-04-27 07:31|| Front Page Top

#14 I am a banker and live in Rednecklandistan. One day I was visiting with one of my customers about our lives as he was making a deposit. He is an immigrant from India and owns a convenience store in town. He was shocked when I mentioned that I had a BS in agriculture and asked how I landed a job in banking. My only response was that I was arrogant enough to ask for the job and willing to learn. He was an engineer and come to the US for more opportunity. "Yes" he said, "that IS how it works here."

Posted by whitecollar redneck 2006-04-27 07:53|| 2006-04-27 07:53|| Front Page Top

#15 Hmmmmm - Statistics, and Denmark, and something smells fishy? Between Twain and Shakespeare, there's a lot to be said about this research.

Posted by Omaique Angarong6414 2006-04-27 08:47|| 2006-04-27 08:47|| Front Page Top

#16 #14, yup - and we're the better for it, too.

Posted by lotp 2006-04-27 09:03|| 2006-04-27 09:03|| Front Page Top

#17 lol, OA6414! Soooo true. You all have already bashed this to death, but here's my comments on this "study":

(1) like someone else mentioned...was this sample normalized for population, race, gender, IQ, etc.?
(2) note that it's comparing our top 5% to Europe's top 5%. That's comparing really rich, industrious workers (U.S.) to probably just the "ruling class" in Europe (politicos).
(3) What is the top 5% of the US (I imagine it's millionaires on up) vs. top 5% of Denmark (much lower, I'd imagine, but just guessing)?
(4) How much (in total $ or Euros) was passed down from generation to generation? I imagine the US total is a LOT higher than the Euro version because of taxes, etc.
(5) I'm assuming this was normalized for this but who knows? What is the rate of inflation for the 2 countries over these last 30+ years? From here on (longer term effects, as well as the Islamization of Europe) will flip these results, even if they were true. If inflation is 6-8%/year in Europe vs. 3% or so in U.S., it's gonna get harder to become "rich" in Europe (especially as socialism calls for more Euros in the future).
(6) Just what is exactly the definition of "poor"? Is it the poverty level? If so, I'd still argue (like Joe did) that it's easier to live in the US (even at the poverty level) than it is in Europe (at the poverty level).

Just a few questions of this so-called "study."

Posted by BA 2006-04-27 11:14|| 2006-04-27 11:14|| Front Page Top

#18 I'm just fascinated that they removed immigrants and their children from this study. I'm not buying the "they weren't in the original study" reason either. Why?

Lots of immigrants, legal or illegal, come here poor or relatively so. Forget about how they are compared to "back home", they generally aren't raking in the cash compared to many of the native born Americans at first. Their kids make it up a rung or two, and their grandchildren go a little further in this country. That isn't the case in much of the world, and the authors know it.

Can't have something like that disproving their pet theories, can we?

Posted by Desert Blondie 2006-04-27 11:32|| http://azjetsetchick.blogspot.com]">[http://azjetsetchick.blogspot.com] 2006-04-27 11:32|| Front Page Top

#19 I think I espoused these rules to grow up and make a decent (and maybe good) living in the U.S.:
1) Finish High School
2) Dont have kids in High School
3) Dont get involved with drugs, gangs and criminal activity.
4) Go to College or some Technical training school (Stay away from Liberal arts degrees)
Note: there are so many ways and avenues to attend and fund college they cannot be stated in this space. Suffice to say that if you have the ambition to attend post-High School education there is a way to pay for it. Additionally, the less well off you are the MORE FREE money (grants, scholarships, etc.) you are apt to find for education.
5) Invest your money or in other words pay yourself first (IRA, Savings, etc)
6) Buy a house and reap some tax benefits (IT IS LEGAL).
Caveat: you can break all these rules and still turn your life around and many will cheer for your success.

Posted by Cyber Sarge 2006-04-27 11:55|| 2006-04-27 11:55|| Front Page Top

#20 "On average, 47 percent of poor families remain poor. But within this, 32 percent of whites stay poor while the figure for blacks is 63 percent."

As Fred points out, you can cherry pick the particular quantiles to make it sound like we live in a hopeless society. But even this guy's data say that 53% of the poor become not poor, 68% among whites, and 37% among blacks. (If he examined blacks who grew up in 2-parent families, I wonder what the figures would be?)

Posted by Perfesser 2006-04-27 15:29|| 2006-04-27 15:29|| Front Page Top

#21 "but the chances of living a rags-to-riches life are a lot lower than elsewhere in the world,"

And just what did the current Governor of Kalifornia carry with him as he stepped into this country?

Posted by Snavigum Uleack8674 2006-04-27 16:01|| 2006-04-27 16:01|| Front Page Top

#22 I forget where I heard it, but only 5% of the population is perpetually poor. Most people move in and out of affluence.

Posted by Cyber Sarge 2006-04-27 17:31|| 2006-04-27 17:31|| Front Page Top

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