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Upward Mobility is So 1970s
Here are three telling data points which, when properly assembled, paint an unflattering picture about working in America today:
- The wealthiest 1 percent sees their income dramatically outpace others;
- Men in their 30s today earn less than their fathers did in the 1970s;
- A parents’ economic success is one of the biggest pointers to their children’s future economic success.
Those are key findings of a study that evaluates economic mobility, or the ability of a person to move up or down the economic ladder within a lifetime or from one generation to the next.
“To be sure, the apple can fall far from the tree … [but] the tree dominates the picture,” the study says. “In modern America, upward mobility is increasingly a family enterprise.”
Though the conclusions are grim, they don’t come as a great shock. What we found surprising was the source of the report: a consortium of conservative think tanks including The Heritage Foundation and the American Enterprise Institute.
The report, “Economic Mobility: Is the American Dream Alive and Well?” argues that a successful democracy needs upward mobility.
But the data demonstrates that this is not happening. In 1974, men in their 30s earned $40,000 a year (inflation-adjusted dollars) but the same group in 2004 saw their real wages decline 12 percent to $35,000 a year. ”Between 1978 and 2005, CEO pay increased from 35 times to nearly 262 times the average worker’s pay,” the study finds.
And despite dramatic increases in productivity, particularly since 2000, wages have remained relatively stagnant. Technology has certainly made it easier to be more productive at work but previous generations were rewarded with a raise.
In the past, decade Americans experienced a jobless recovery right after dot-com bust and 9/11. Now we have much higher employment but static wages across much of the non-executive part of the workforce.
This is compounded by the assertion that, among their counterparts in the industrial world, Americans are the least likely to advance based on their own merits.
Why do you think nations such as Denmark, Germany and Sweden have greater economic mobility? With unemployment rising rapidly do these statistics matter to you?
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