While people in America can and do move up, claiming that there is such widespread movement of people across income brackets is simply false.The relevant bits from an article by Paul Krugman, who makes the point nicely: "Last week The Wall Street Journal cited -- not for the first time -- two old studies purporting to show that people who are currently in the bottom 20 percent of the income distribution are not only unlikely to stay there; after 10 or 15 years they are more likely to be in the top 20 percent than in the bottom. Never mind that both studies were ridiculed by serious experts for their obvious (and obviously intentional) procedural errors as soon as they came out. As Kevin Murphy of the University of Chicago put it, those people who supposedly went from the bottom to the top were basically guys who worked part time in the college bookstore, then had real jobs by the time they were 30. The reality -- documented by a number of other studies that The Journal for some reason chose not to mention -- is that while most Americans will move up or down the income distribution over the course of a decade, most won't move very far. In fact, even in America your parents' social class, though it doesn't determine your own, affects it strongly."You can find the complete article (Krugman discusses proposed tax cuts) at: http://www.nytimes.com/library/opinion/krugman/082000krug.html(Sorry but I'm not sure how to inclue it as a hyper link.)
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ra