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Politics "Under democracy, one party always devotes its chief energies to trying to prove that the other party is unfit to rule -and both commonly succeed, and are right." -H.L. Menken

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Old 04-27-2006, 03:59 AM   #1
CptSternn
 
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America's rags-to-riches dream an illusion

http://news.**********/s/nm/20060426/...BhBHNlYwM5NjQ-

WASHINGTON (Reuters) - America may still think of itself as the land of opportunity, but the chances of living a rags-to-riches life are a lot lower than elsewhere in the world, according to a new study published on Wednesday.

The likelihood that a child born into a poor family will make it into the top five percent is just one percent, according to "Understanding Mobility in America," a study by economist Tom Hertz from American University.

By contrast, a child born rich had a 22 percent chance of being rich as an adult, he said.

"In other words, the chances of getting rich are about 20 times higher if you are born rich than if you are born in a low-income family," he told an audience at the Center for American Progress, a liberal think-tank sponsoring the work.

He also found the United States had one of the lowest levels of inter-generational mobility in the wealthy world, on a par with Britain but way behind most of Europe.

"Consider a rich and poor family in the United States and a similar pair of families in Denmark, and ask how much of the difference in the parents' incomes would be transmitted, on average, to their grandchildren," Hertz said.

"In the United States this would be 22 percent; in Denmark it would be two percent," he said.

The research was based on a panel of over 4,000 children, whose parents' income were observed in 1968, and whose income as adults was reviewed again in 1995, 1996, 1997 and 1999.

The survey did not include immigrants, who were not captured in the original data pool. Millions of immigrants work in the U.S, many illegally, earnings much higher salaries than they could get back home.

Several other experts invited to review his work endorsed the general findings, although they were reticent about accompanying policy recommendations.

"This debunks the myth of America as the land of opportunity, but it doesn't tell us what to do to fix it," said Bhashkar Mazumder, a senior economist at the Federal Reserve Bank of Cleveland who has researched this field.

Recent studies have highlighted growing income inequality in the United States, but Americans remain highly optimistic about the odds for economic improvement in their own lifetime.

A survey for the New York Times last year found that 80 percent of those polled believed that it was possible to start out poor, work hard and become rich, compared with less than 60 percent back in 1983.

This contradiction, implying that while people think they are going to make it, the reality is very different, has been seized by critics of President Bush to pound the White House over tax cuts they say favor the rich.

Hertz examined channels transmitting income across generations and identified education as the single largest factor, explaining 30 percent of the income-correlation, in an argument to boost public access to universities.

Breaking the survey down by race spotlighted this as the next most powerful force to explain why the poor stay poor.

On average, 47 percent of poor families remain poor. But within this, 32 percent of whites stay poor while the figure for blacks is 63 percent.

It works the other way as well, with only 3 percent of blacks making it from the bottom quarter of the income ladder to the top quarter, versus 14 percent of whites.

"Part of the reason mobility is so low in America is that race still makes a difference in economic life," he said.



Now, before anyone accuses me of bashing the US, I'd like some serious discussion on this. I mean, yes, I obviously supoprt the articles findings, but would like to know from others personal experiences, has anyone here who was raised in the states say this article is wrong? I mean, out of all my mates in the states, and all the people I knew and still know there, it's pretty much correct.

I don't know of anyone who has moved above the tax bracket they (their parents) were born into. In fact, most people I know are actually in a bracket lower than their parents. Has anyone here moved above their parents level of monetery value? Know of people who did? Is that just an execption to the rule?
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Old 04-27-2006, 04:23 AM   #2
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When you say "tax bracket" do you mean income?
I know my sister is earning more money at this stage of her life/career than my father was at the same stage. I, however, am a waster and am probably earning less.
But are you only interested in the experiences memebrs who are citizens of the USA?
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Old 04-27-2006, 07:02 AM   #3
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Sternn's 'Everyone Thinks I Know What The Fuck I'm Talking About' dream an illusion...
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Old 04-27-2006, 07:06 AM   #4
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That is so very true. In fact, my husband and I are a tax bracket below my parents right now because we're both still in school. Neither of my parents went to college (but my mother is currently back in school right now), so I don't know whether or not the current hardship will end up paying off later or not. Time will tell. But even if I do end up making more money than my parents once I graduate, I'll still be behind, essentially, for a while because of all the student loans I'll have to pay off.

Add to all this the fact that everything is so much more expensive now than when our parents were young. For example, my mother was telling my husband and I that we need to look into buying a house. She said that she and my father had already bought their house by the time they were our ages, and when she told me what she paid for it I nearly fainted. What she paid about $85,000 for back then is now worth about $750,000. With the current state of the economy, there's no way my husband and I see a house in our near future, which also means we don't get the nifty tax write-off my parents had when they were our ages.

My point is....it's hard enough to keep up let alone get ahead at all.
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Old 04-28-2006, 05:43 AM   #5
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Yeah, see, I went back to my high school reuinion a few years back, and found most everyone was either still living in towne, doing the same thing, or were dead. Not one person I knew had 'made it' or had even moved out of the area. There were a few people that didn't come, but only like a dozen, and even their relatives didn't know where they were. But out of a class of 700+, even if those few did leave the area, cut ties to their families, make a million, thats a small percent.
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