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Moving On Up

I read two articles in the WSJ about income mobility in the U.S. One article was about how middle class blacks born in the 1960's are more likely to make less money than their parents than comparable whites. And the other article was about how incomes have changed over the past decade.

In the latter study, they found that the poorest Americans increased their incomes the most while the richest declined the most. This actually reinforces similar studies from the 1970s and 1980s. The main take-away from the study is that opportunity and merit continue to drive American success, rather than luck, accidents, or privileged birth. The American Dream remains intact. Good to know. No need to increase taxes on the rich.

The former study about blacks is pretty interesting as well. It looked at children born in the late 1960's and how they have fared in the late 1990's and early 2000's. It certainly confirmed with what was found in the other study about how the poorest students were most likely to improve. But when they looked at where these children ended up by race, they found that 69% of blacks whose parents were in the middle 20% of all families had a 69% chance of earning less than their parents while whites had a 32% chance.

Why the discrepancy? The study didn't offer any definitive answers, but they did offer some conjectures. Here's the excerpt of that:

One [explanation] is that black parents have less wealth, in the form of homes or other assets, than white parents of the same income, which might affect the economic prospects of their children. Another is that marriage rates are lower for blacks than for whites, so black children may be more likely to grow up to be single parents.

Yet another theory is that in the 1960s, black women were more likely to work than white women, and thus black incomes received less of a boost as women's overall participation in the labor force rose in subsequent years.


I'm definitely happy to see the mobility studies for the country as a whole, but sad to see the differences between races. I'd be really interested to see the exact reasons behind the discrepancy. Hopefully that will change in the next decade.
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