Sent: March 23, 2011 8:30 P.M.
Subject: Americans Move Up and Down the Income Ladder
In an opinion “Myths
about the rich and poor in the U.S.” Steven R. Cunningham puts some
interesting info about Americans both moving up the income scales and
moving down them as well. Mr. Cunningham is director of research and
education at the American Institute for Economic Research.
Mr. Cunningham points out there are lots of misconceptions about the differences between wealth and income. He notes for example that “households of people ages 70-74 have the highest average wealth of any age group in America, but less than half the income of those in the 35-44 age bracket.”
After noting that income distribution data is little more than a snapshot in time that tells very little about the movement within our economy he notes:
“Yet, economic mobility is a characteristic that helps differentiate the United States from many other countries. Between 2004 and 2007, for example, roughly a third of the households in the lowest income group moved up to a higher income group, according to the Census Bureau, while roughly a third of the households in the highest income group moved down.
Another study, conducted in 2007 by the U.S. Treasury, examined income tax returns from 1996 and 2005. Over the period, the median income of the study group rose by 24 percent. Almost 58 percent of those in the lowest income group in 1996 moved to a higher group by 2005. About a fourth of them rose to middle- or upper-middle-class incomes; more than 5 percent made it into the highest income group -- in 10 years. The only group experiencing a decline in income was the richest 1 percent. This is hardly what most people have been led to believe.
While this may seem like an economic version of "musical chairs," it tells us that mobility among economic groups is high and chronic poverty is rare.
Is U.S. income growth stagnant? Are the rich getting richer and the poor getting poorer? Neither is true.
The power of the American economy is that it provides opportunity. The income mobility numbers make this abundantly clear. “ (My emphasis.)
Yes economic opportunity. That should be among our most cherished rights. It is why people from all over the world move here. Many risk their lives to come here illegally. This opportunity offered in few other places and none like it is here has become misunderstood and many are willing to abandon it. That opportunity has driven innovation, competition, incredible hard work and a resulting society that has made us the envy of the world.
It is important to remember the ability to move up or down it as noted above. There is nothing better.