Saturday, November 12, 2011
The Occupy protesters' rallying cry—"We are the 99%"—drives home their view of a chasm between them and the top-earning 1% of Americans. But just how set are such categories? How often do people rise to the 1% or drop back to the 99%?
The answers, researchers say, are complicated. Americans frequently move up or down in income rankings. Yet there is evidence they are doing so less often than they used to, and less than residents of Canada and Western Europe.
"Yes, the U.S. has a lot of mobility," says Sheldon Danziger, an economist at the University of Michigan. "But we also have a lot of inequality, and particularly a lot of stickiness at the top and at the bottom."
Then there is the question of how important relative mobility—a measure that compares one person's income with everyone else's—should be in looking at Americans' economic opportunities.
"Folks on the political right tend to favor an absolute measure," says Erin Currier, manager of the Pew Charitable Trusts' Economic Mobility Project, a research group. "They focus on rising tides lifting all boats. Folks on the left tend to focus on relative mobility, and equality of opportunity." ...
During George W. Bush's presidency, the Treasury Department released figures, based on tax returns, that demonstrated the complexity of the issue. According to the report, which tracked taxpayers from 1996 to 2005, just 40.3% of those in the top 1% in 1996 remained there nine years later. But most didn't fall far: 86.5% remained in the top 20%. Meanwhile, more than half of those in the bottom quintile in 1996 remained there nine years later.
For more, see here.