Data on Income Mobility

Mark Perry has some interesting statistics about income mobility. I suggest you read his entire post here.

MP:A common misperception is that the top or bottom income quintiles, or the top or bottom X% by income, are static, closed, private clubs with very little turnover – once you get into a top or bottom quintile, or a certain income percent, you stay there for life, making it difficult for people to move to a different group. But reality is very different – people move up and down the income quintiles and percentage groups throughout their careers and lives. The top or bottom 1/5/10%, just like the top or bottom quintiles, are never the same people from year to year, there is constant turnover as we move up and down the quintiles.


9 Responses to “Data on Income Mobility”

  1. 1 Lauren Swartz June 16, 2009 at 9:02 AM

    While I don’t disagree that there may be a great deal of movement within and between the upper and lower eschelons of the American classes I think the real concern ought to be the distance people from the lowest rank are able to travel. Does someone in the bottom 1/5/10% really have a chance to become part of the top 1/5/10%? Or even the top 50/60%? Or is the mobility mentioned in the post really a reflection of small changes in their status: from the bottom 10% to the bottom 12%? How much of a “real” increase is a 100% increase in income for someone in the lowest 1%?

  2. 2 James Dugger June 17, 2009 at 4:07 PM

    I always felt it was more difficult for the bottom to move up to the top than vice versa. There are certain advantages to being in the top percentile. As stated in the previous comment, an 100% increase in the lower is not the same as an 100% incrase in the top. Also, I would like to see where those who actually moved up are at currently in this current economic environment.

    Are these statistic just based on income, or does it include Available Credit? I know I’ve personally moved lower in the past year and a half with hours being cut, job loss, worse benefits, etc…

    I must say though, part of the beauty of our country is the fact we CAN move up, or down, and it’s all based upon us. I’m glad there is something that shows it does happen. I would like to know though, from year to year, if it’s the same people moving up and down while there are others who are fixed in place. (For Example, the top 3 Billionaires switch places from year to year, but they still seem pretty fixed in place.)

  3. 3 Dave Stevenson June 21, 2009 at 7:36 PM

    This is an interesting article, but a bit hard to believe in the statistics fully. If you take the top 2% of Americans as far as wealth is concerned, then I doubt that the top 2% are moving down at all. But if you look strictly at the income, not wealth, then maybe since it would be based on gross earnings for that year alone.

    Maybe the misperception is due to the fact that we never hear of anyone falling from their wealth, unless it’s someone like Madoff.

    I agree that this country is the best place to provide the opportunity for us to rise from the bottom, after all, isn’t that the general definition of the American dream?

  4. 4 Dave Stevenson June 21, 2009 at 7:43 PM

    I find it a bit hard to swallow those statistics, unless they are strictly referring to income, and not wealth. I guess you could have some movement at the top if you are only looking at single year gross earnings, and not overall wealth. Then yes, technically I could make 500 million in one year and be in the top % of earners, and then not make another dime for the rest of my life and drop right out.
    But when it comes to wealth, true wealth, I don’t think there is much movement at the top. You never hear of a riches to rags story, unless it’s one like Madoff.

    I do feel that this the best place for the bottom to rise, being the definition of the American dream and all.

  5. 5 Dave Stevenson June 21, 2009 at 7:43 PM

    I apologize for the double post – received an error message from the first one, and then tried to remember what I typed and sent it again.

  6. 6 Amanda Smith June 27, 2009 at 1:42 PM

    I wonder if unemployment has anything to do with those statistics. If they were counting the wealth of the unemployed, then it would make much more sense to say that the bottom of the wealth percentage rises more than the top falls. Especially now, since the government is so dedicated to creating jobs for those who have none.

  7. 7 Tanisha/ Econ 100 July 9, 2009 at 11:57 AM

    I agree with Amanda. That unemployment may have something to do with these statistics. With no jobs, there is no money, which puts you in the lower percentile. However, when these people get jobs, they will slowly move up. And the lucky few will eventually make it to the top percentile. And the people in the top percentile will most likely stay there unless they are hit with some sort of disaster.

  8. 8 Alejandro Cortez August 3, 2009 at 4:13 PM

    The data presented in this blog is interesting but it does not mention that while that the movement did affect the top and bottom strata, their positions in the economy probably did not change much at all. Someone in the top percentile may drop down, but they still have more money than most other Americans. Those at the bottom might move up into a higher bracket, but how much more did their income increase? How drastic were the rises and falls? These questions should be answered if the data in the blog is to be considered as an accurate reflection of the American economic landscape.

  9. 9 Jessica Tsai August 4, 2009 at 12:53 AM

    I find it hard to believe everything this article discusses. While there may be some movement for the bottom quintiles, it seems as though the article undermines the true difficulty of moving up income classes, especially in this economy. I do not doubt that moving from middle class to say upper middle class is very possible, but from my studies in wealth and poverty as well as poverty and population, statistics of income mobility are far more disturbing than this article makes them out to be. Moreover, while there may be mobility even for those in lower quintiles, is this even significant compared to a movement in the upper quintiles? For those living in poverty, is any small percentage of increase really going to improve living standards by a large enough amount? I do have to acknowledge the fact that compared to other countries, America does hold a higher degree of income mobility, but when speaking in terms of this mobility, comparing rates of increase or decrease in different classes hardly seems fair when those in the lower classes, no matter how great their increase is, will still find it nearly impossible to escalate or even compare to the top quintiles.

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