From the first link, there are two critically important, overwhelmingly positive notes IMO:
¦ Eighty-four percent of Americans have higher family incomes than their parents had at the same age, and across all levels of the income distribution, this generation is doing better than the one that came before it.
¦ Ninety-three percent of Americans whose parents were in the bottom fifth of the income ladder and 88 percent of those whose parents were in the middle quintile exceed their parents’ family income as adults.
Not only are the vast majority of people doing better than their parents, this effect is even stronger at the bottom of the distribution. That seems pretty damn good to me.
End notes in the study confirm sensible treatment of the comparisons: Measures of family income are adjusted for family size and inflation. Measures of earnings are adjusted for inflation. Measures of wealth are adjusted for inflation and age.
1) You have a fine point that it doesn't make sense to compare the percentage of (people who might have children + people who might not have children) to (30-year-olds of a previous era who went on to have children). In isolation, an absolute number like "50%" only has meaning if we assume that there are no significant differences in earnings between parents and non-parents.
2) Others are pointing out that the message of the graph is not the absolute percentage, but the trend line. The graph purports to show that the chance of greater earnings of (30-year-old maybe parents) vs (their own definitely parents at age 30) has decreased relatively linearly from 90% to 50% over the last 50 years. This could be explained by a demographic change in who has children over the same time frame, but it's not absurd to assume that the dynamics have remained constant even though the differences between the groups are unknown.
3) I'd be wondering more about how they accounted for inflation, since the manner in which this is done would drastically effect the results. I think the question essentially boils down to "at a given decile of earnings, does the average person today have a better life than the average person 30 years ago?" I don't know how one could answer this rigorously.
This doesn't contradict Roberts. The chart at the top of your linked article shows that even for Gen X, poor people generally out earn their parents, and rich people are far less likely to out earn their parents.
Roberts just elides the fact that historically, an even higher percentage of poor and middle class people would out earn their parents.
So his statistics are not wrong, he just presents them in a certain light.
> About half earn more, about half earn less. Wouldn't that imply that the average earnings are about the same?
Actually no, though this is a fairly standard misunderstanding of statistics. For an easy counter-example imagine generation one being [0, 100] and generation two being [1, 2]. Average wealth goes down, while every element is higher than 50% of the previous generation.
Measuring real growth properly is useful for addressing a host of questions. For example, existing studies use measured inflation to calculate the real income of children relative to their parents. Chetty et al. (2017) find that 50% of children born in 1984 achieved higher incomes than their parents at age 30. Adjusting for missing growth would raise the real income of children about 17% relative to their parents, increasing the fraction of those who do better than their parents by a meaningful amount. Thus, to the extent that inflation is overstated due to imputed values, a larger fraction of children appear to be better off economically than their parents. This improvement in economic welfare can shine a bit more positive light on current conditions, despite the gloom of slower productivity growth.
Yeah, agree with you that if they used percentages - it would have been much easier to see - disagree with you about what their data is implying. Think it clearly shows that those with less adverse experiences have more success in life.
Took another look at their data visualizations, and yeah, look at 2013, for the people with no adverse experiences, it looks like at least 40% make $45k more, while those with multiple adverse experiences it looks something like 15%.
And, in 2021, it's harder to see (because looks like people's income rises as they get older), but it looks like for no-adverse experiences, good 50% are making over $60k, while maybe 30% for multiple adverse experiences.
... and actually, do agree with one aspect, it is interesting that the older they get, the less the differences in income and other life attributes are. Maybe it just means that for people who had difficult childhoods, it takes more time to get past all the early obstacles, and live a more stable life.
You're comparing yourself to the wrong baseline. The opportunities now are different than they were 30 years ago. You also might be comparing yourself to a specific data point (your dad), vs statistically.
> I'm a 90th percentile earner. Will 95+ percentile earner in a few years time. Yet it feels like I am not as well off as I should be.
You should correct your attitude then, don't you think? You are a 90%ile earner. I don't know what "should" implies, but put it in terms of where you "are". You'll be happier.
Interesting. Milliennials are a bit behind but it's essentially rounding errors. Did not expect that. It's another example of narratives the media pushes being different from reality. However I wonder if there's any good data on a milliennial's PPP vs. their parents. That definitely has to be the real difference especially since there's plenty of data on how the average income hasn't scaled with productivity for ~50 years.
You're only referring to income compared to parents at the same age.
And this a weighted average of incomes roughly 27 years ago (the weight is the distribution of ages at which children are born).
The sample of people today includes only those people who's parents were in the united states 27 or so years ago. Call this group A. Call the complement (either immigrants or children of immigrants) B. Call the historical reference group C. Wages of A U B are roughly equal to those of C. Wages(A) > C. This implies wages(B) < C. If wages of A U B have not increased, but the wages of A have, this implies the wages of B must be lower than the historical average. Simple arithmetic.
So basically, the story is that Murph Jr. makes 60% more (Chained CPI adjusted) than Murph Sr. did at the same age. But the average of Murph Jr. and Jose (a recent immigrant) is lower than Murph Sr.'s (Chained CPI adjusted) wage.
Also, while Sully Jr. might make less than Sully Sr. did, the study asserts that the average of Sully Jr. and Sally Jr. (not to mention Tyrone Jr. and Poonam Jr. - remember how non-white males are also allowed to have good jobs these days) is up 60%.
> "ones grandfather's income quintile is a better predictor of ones owns than ones fathers's"
Wouldn't this actually meant that the average of one's parents, grandparent's, and great-grandparent's income quintiles is a better predictor than one's parents alone? (Unless these studies only looked at personal income of male relatives instead of household income?) The income of the grandfather is still a single point subject to fluctuations.
What the linked article says...
"Eighty-four percent of Americans have higher family incomes than their parents did."
...the question is "incomes" just raw income or did they adjust it? Clearly people will have more dollar bills, but that dollar bill doesn't go as far.
I certainly know I'm not better off than my parents, I'm most definitely worse, but I still have a higher number on my paycheck.
From the article: "The study looks at people who were 35–40 in 1987 and then looks at how they were doing 20 years later, when they are 55–60. The median income of the people in the top 20% in 1987 ended up 5% lower twenty years later. The people in the middle 20% ended up with median income that was 27% higher. And if you started in the bottom 20%, your income doubled. If you were in the top 1% in 1987, 20 years later, median income was 29% lower."
Interesting read, but supposedly when we're talking about changes in social mobility we really care about the change in the percentage of people that are richer than their parents? Indeed towards the end of the article the author says:
> There is one study of progress over time that follows parents and children that is gloomy and that is “The Fading American Dream: Trends in Absolute Mobility Since 1940” by Raj Chetty, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, Jimmy Narang (Chetty et al) They find that if you were born in 1940, you had a 92% chance of surpassing your parents income. But if you were born in 1984, the number is a depressing 50%. Chetty et al control for age — this is for parents and children when they are both 30. This does suggest that the American dream is dead or at least dying — half of the children do better than their parents but half do worse, suggesting no progress over time.
The author then says that we should measure income differently by using a non-standard measure of inflation. But if we had just used that non-standard measure on the wage data of Piketty et al., we would've arrived at the same conclusion anyway?
the point you're trying to make here is completely tangential to the point being discussed in the article. the fact being reported on is that public knowledge about the size of the income and wealth gap is heavily flawed and most of the survey respondents used in the study believed things that were not true.
the fact that the population size (and correspondingly, the GDP) is larger today than it was 40 years ago has nothing to do with this.
"However, because US income inequalities have increased substantially, the consequences of the "birth lottery" - the parents to whom a child is born - are larger today than in the past. US wealth is increasingly concentrated in the top 10% of American families, so children of the remaining 90% are more likely to be born at lower starting incomes today than the same children in the past. Even if they are equally mobile and climb the same distance up the US socioeconomic ladder as children born 25 years earlier, the bottom 90% of the ladder is worth less now, so they gain less income value from their climb ... especially when compared to the top 10%."
And, those who fall from the top quintile are likely starting at the 80% point and not the 95% point.
You left out one of the biggest causes of this. For many people in that 56%, the year they end up in the top 10% is the year their last surviving parent passes away. Inheritance is a big one-time windfall for many people.
The other misleading thing is it looks at 44 years of longitudinal data, and doesn't make corrections for differences between the early years and later years. Income has become more polar in the last 40 years, so the current numbers are a fair bit worse than the average numbers of the last 4.4 decades.
"50% of people today make more than their parents."
"90% of people 60 years ago made more than their parents."
If yes, what is the problem that you have with this study again?
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