Upward financial mobility still as possible?

[razz]

Found this CBC article interesting in stating that thinks have not changed as much as one might believe. People still move up in the world but it is dependent on one's geographic location.
Do you think this research reflects the truth?

http://www.cbc.ca/news/business/economic-ladder-no-harder-to-climb-today-u-s-report-finds-1.2508409

[try2bfrugal]

I think there is some weird kind of "We're number one" type mentality in the U.S. about everything from social mobility to health care, whether it is true or not. In many cases it is not. Of the developed countries, the U.S. is actually one of the least socially mobile.

I like this quote from a related type of article -

"It's clear that Americans still believe that America has exceptional mobility, and that's not true," said Long. He calling it "vexing" that "lots of people could be systematically mistaken about verifiable, factual information."

From - http://money.cnn.com/2013/12/09/news/economy/america-economic-mobility/

[Alan]

I saw this story in a different source today and nearly started this thread myself. http://www.nytimes.com/2014/01/23/business/upward-mobility-has-not-declined-study-says.html?smid=tw-share&_r=1

It makes me wonder if what's really changed is our expectations.


Do you think this research reflects the truth?


Yes, I do.

[bae]

Do you think this research reflects the truth?


"The" truth? I suspect there are multiple truths going on here.

[ApatheticNoMore]

So the study is comparing change in income rankings of generation X (born in 1971) to what would probably be generation Y although some might classify it as millenials (born in 1986). Neither of which tend to be considered as the peak of American income mobility in the popular imagination. The study does not include Baby Boomers or WWII. Though watch people think that's what the study is about ... see you kids have it no worse than the baby boomers ... maybe, but it's not that study!!! The study really didn't go back prior to born in 1971.

The 1971 reached early adulthood in the Clinton era which was relative prosperity for the last 40 years or so. The 1896 generation reached early adulthood in The Crash of 08. So it is interesting that they don't have worse outcomes due to the crash.

Also there's a tendency to assume a study is looking back, I did at first (isn't that what studies are supposed to do?), but it seems to be projecting forward, especially for the 1986 group. They are age 27/28 now. At which age it is likely possible to make predictions of lifetime income if past trends continue (not likely IMO but neither is that relevant).

Also it's income and NOT wealth.

Do I think it's the truth? Well I have no counter study to the limited info this study is giving (again not what most will likely assume it's saying), I'm not going to argue the math (if I even could ....) so :). I dont' disbelieve it. The only truly surprising point is that the crash seems to have had less effect than expected on income mobility.

Or is it supposed to be some grand subjective feeling on whether financial mobility is possible. Well ... even with Gen Y being no worse than Gen X - the article itself said mobility was not very high and less than many of other places.

Also it says this:
"Although rank-based measures of mobility remained stable, income inequality increased substantially over the period we study. Hence, the consequences of the “birth lottery” – the parents to whom a child is born – are larger today than in the past. A useful visual analogy (shown in the figure below) is to envision the income distribution as a ladder, with each percentile representing a different rung. The rungs of the ladder have grown further apart (inequality has increased), but children’s chances of climbing from lower to higher rungs have not changed (rank-based mobility has remained stable)."

So IOW it's playing the same not very good roulette odds as ever, only for much higher stakes.

I'm reminded of this article showing why generation X investments have performed so poorly (oh I believe it way too easily - because well a glance at the 201k :)). But it was comparing X to boomers in wealth acumulation. So it was both comparing different generations than the study in the news article (boomers to X versus X to Y) and comparing different measures (income versus wealth, relative ranking versus absolute totals).
http://charleshughsmith.blogspot.com/2013/05/generation-x-inconvenient-era.html