- Sep 2, 2008
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Social mobility and inequality: Upper bound | The Economist
Between 1947 and 1973, the typical American familys income roughly doubled in real terms. Between 1973 and 2007, however, it grew by only 22%and this thanks to the rise of two-worker households.
In a new poll for The Economist by YouGov, 36% of respondents said they had less opportunity than their parents did, compared with 39% who thought they had more. Half thought the next generation would have a lower standard of living, double the share that thought living standards would rise. As the country recovers, two problems cloud its future. Rates of social mobility are unlikely to grow. Inequality, however, may widen even further.
In 2004 men in their 30s earned 12% less in real terms than their fathers did at a similar age, according to Pews Economic Mobility Project.
Parental income is a better predictor of a childs future in America than in much of Europe, implying that social mobility is less powerful.
Between 1970 and 2008 the Gini coefficient, a measure of income inequality, grew from 0.39 to 0.47. In mid-2008 the typical familys income was lower than it had been in 2000. The richest 10% earned nearly half of all income, surpassing even their share in 1928, the year before the Great Crash.