“Having a college degree makes a person more than three times more likely to rise from the bottom of the family income ladder all the way to the top, and makes a person more than four times more likely to rise from the bottom of the family wealth ladder to the top.”
Pew Research has been researching social mobility for years; here is what they found. The children of wealthy families have a very large likelihood of themselves being wealthy themselves; conversely – the children of poor families tend to remain poor. The social mobility in America is so bad that only 4% of those who were born to families in the bottom 20% of wealth actually make it to the top 20% of income. Social mobility is so bad that 70% of Americans are below the median income.
And while 84% of Americans are making more money than their parents … this doesn’t factor in cuts in social services and increases in cost of living. So you can make more money today … but have a lower quality of living due to the overall higher costs of living in the modern age. The study showcases just how important a college degree is in pulling oneself out of poverty … but make no mistake about it – this increasing gap between poor and rich is the result of “trickle down economics” aka “laissez-faire economics” aka “horse and sparrow economics“.
Pew Research have four key findings HERE:
- Eighty-four percent of Americans have higher family incomes than their parents did.
- Those born at the top and bottom of the income ladder are likely to stay there as adults. More than 40 percent of Americans raised in the bottom quintile of the family income ladder remain stuck there as adults, and 70 percent remain below the middle.
- African Americans are more likely to be stuck at the bottom and fall from the middle of the economic ladder across a generation.
- A four-year college degree promotes upward mobility from the bottom and prevents downward mobility from the middle and the top.
Economix points this out HERE:
The median family in the top socioeconomic class today (i.e., the family at the 90th percentile) is worth $629,853, compared to $495,510 in the last generation. That’s a 27 percent increase in the size of the median fortune in the top income stratum.
In other words, compared to the last generation, wealth has been become more concentrated in the hands (and bank accounts and houses) of the richest Americans. Exactly why is debatable. The global markets for labor and capital have changed, of course. And the lower tax rate on capital gains — which disproportionately helps richer people, who have more capital to invest — has helped the richest amass ever higher net worths.
Another chart from Pew below shows mobility at the polar ends of the socioeconomic status are much less likely to change. If you were born poor – you are more than 500% more likely to be poor than someone who was born into the top 20%. If you won the sperm lottery – congratulations … your prospects look good.
Basically – the American Dream is dead. We’ve written about this in “If Americans want to live the American dream, they should go to Denmark”; you should read it.
Pew Research has written about social mobility at the state level; they found “liberal leaning states” had better social mobility. You can read about that HERE:
In the United States, there is a stronger link between parental education and children’s economic, educational, and socio-emotional outcomes than in any other country investigated.
So having absorbed all of this … consider the policies that are being proposed by various politicians. Understanding how important education is to oneself lifting themselves out of poverty … how can anyone justify significant cuts in early childhood education programs and Pell Grants for lower income college students?
As we have written about HERE – we know that unintelligent students of privilege are more likely to complete college than poor, intelligent students. It’s all just one big sham.
So – why did the Republican party vote to cut $46 billion a year out of Pell Grants and other mandatory spending? (source) The Republicans have nominated a candidate in Mitt Romney whose so-called “solutions” to put all Americans on a path towards a 21st century education is more like something out of the 19th century. As we have written HERE:
Here is what Mitt is proposing relative to Americans going to college:
#1 – Get as much education as you can afford. He literally said “the best thing I can do for you is to tell you to shop around.” If you’re poor – sorry. Try Pell Grants maybe? (See #2)
#2 – Draconian cuts to Pell Grants for poor students who can’t afford college. He strongly embraced the House GOP budget plan which has about $17 Billion a year in cuts from the Pell Grant program (source). Pell Grants are considered part of the “European entitlement society” which he very much wants to avoid. No more Pell Grants – sorry. (See #3)
#3 – Join the military. And as he puts it “YEAH, WE’LL GIVE YOU HELP.”
#4 – Go to war with Iran. If you can make it through four full years of our next war to annex Iran as America’s 51st state … then ”YEAH, WE’LL GIVE YOU HELP.”
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