Rags to riches: Good news for the poor

When 30% of all children raised in the poorest families subsequently earn two, three or four income levels better than their parents, you might think this is a cause for celebration!  Is there a cause for celebration here?  Is there legitimate income mobility regardless of your family of origin?

Good News, or not?

When Pew Charitable Trust’s Economic Mobility Project entitled Pursuing the American Dream: Economic Mobility Across Generations was published (June 2012), it was the first and only data based study of how well the children of poor families are doing 40 years later.

This outstanding study of American families was initiated in 1968 with data collection from the parents and their genetic children.  The children of these families were followed as adults 40-years later through 2009.  Comparisons were made of parent and offspring income at the same ages, and were adjusted for family size and inflation to make the 40-year data span as comparable as possible.  For any organization to conduct a follow-up study 40 years later is a rare accomplishment.

What is equally startling is how the liberal spin doctors can take good news and see only the half-empty glass, rather than the half-full glass.   This is reminiscent of throwing pearls before swine, which are incapable of seeing jewels in plain sight.

Liberal spin

Allison Linn on her broom

Allison Linn on her broom

Allison Linn of MSNBC’s Economy Watch published her analysis (June 9, 2012) under the title: Rags to riches? That’s Hollywood fiction, study finds. She continues: “Just 4 percent of people who grew up in the bottom fifth of the household income ladder made it to the top fifth as adults.  According to her, this “shows the limits of American mobility”.

Somewhat surprisingly Erin Currier, PEW’s project manager, suggests that the data shows little movement up and down the economic ladder.  Pew’s report is here.

Discussion

But wait just a minute!  Do they even understand what they  are saying about earning a living?  Some children raised in the poorest fifth of American households in 1984 are able to jump to the top income level in a single generation!  That is jumping from the bottom rung of a five-step ladder to the top rung, four steps above their own parents’ income.

Linn’s additional spin is that this is just 4% of those from the poorest families.  Exactly why a liberal would demean an accomplishment of this magnitude from a poor family is a perverse irony.

What’s more, a full 30% of all children raised in the same poor homes jumped two, three, and four income levels above their parents.  This is from a five level income classification scheme, aka 20% quintiles.

This could be spun into a stellar performance! For those looking at the half-full glass, this record is not based upon wishful thinking, but is documented by the children of the poorest families in the study.

By contrast, a full 8% of the children raised in the richest families fell all the way to the bottom rung of the same income ladder.  Being born with a gold spoon in your mouth is little protection when it comes to earning a living.

Given these large jumps, even with smaller percentages, it is clear that jumping from the bottom to the top income, or falling from the top to the bottom demonstrates amazing economic mobility!

Unlike Linn’s negative spin, this information documents virtually unlimited economic mobility in America’s economy, and clearly does not discriminate against the children raised in the poorest of families.  America’s poor families must be doing something right!!

Surprise!  Surprise!

Data documentation

With the spin doctor’s propaganda aside, the documentation through actual data is presented without spin as follows:

Table 1
Children reporting income greater than their parents
BetterIncome

Table 1 shows the highest earning families in 1984 as the top 20%.  Some 70% of their children earned more than their parents at the same age 40 years later.  Among the poorest families 93% of their children reported better earnings than their parents at the same age.  Overall 84% of the offspring reported greater income than their genetic parents, when adjusted for family size and inflation.

Table 2
Offspring income distribution by family of origin earnings in 1984

Offspring incomeIn Table 2 the left column shows the poorest parents by income in 1984.  The numbers within each column show the distribution of their children’s earnings at the same age 40 years later.  The dark blue color denotes income in the lowest quintile (20%), while the lighter blue colors show offspring income in the higher income levels.

As described above, the poorest families had 4% of their children rise to the top of the earning ladder.  That is four rungs on the ladder above their parents.  This stellar performance is called just 4% by the liberal spin doctors.

The top earning parents in the right column reverse this pattern with 8% of their offspring falling to the bottom rung of the income ladder.  This could be called falling from grace, but the liberal media sees fit to avoid mentioning the rich folk’s children who don’t do so well.  In fact most of them never reach their parents high standard.

Parting thoughts

The Obama administration and his many handlers state that the American Dream is mostly illusion.  After family and school influences, an income is the front door to doing well in America.  The primary findings of this study show that income in ones family of origin is not a serious impediment to seeking the American Dream.

The documentation of income mobility, both up and down, is a refreshing departure from the distorted news coming through our liberal spin masters.  PEW’s own project manager’s statement that “there is little movement up and down the economic ladder” shows she does not understand her own data.  PEW’s data shows far more mobility than not.

Hello!!  Let’s report the good news when it is there.

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