Soc 1010

Chapter 9
http://www.pewtrusts.org/en/multimedia/video/2011/economic-mobility-and-the-american-dream 
Economic Mobility and the American Dream 

JLG

Female Speaker:   Economic mobility is the ability to move up and down the income ladder during one's lifetime and across generations.  

Having an understanding of economic mobility is therefore having an understanding of the health and status of the American dream.  

There are two ways of measuring economic mobility.  The first is absolute, which looks at upward and downward changes in income over time.  

[Clock ticking.]  

When we look at absolute mobility in the United States, we see a glass that is half full.  This is because the vast majority of Americans have higher incomes and inflation-adjusted dollars than their parents did at the same age.  That's true across the income distribution.  

In terms of absolute mobility, the American dream is doing quite well.  

The second measure of economic mobility is relative, which is concerned with a person's rank within the income distribution as a whole.  By this measure, we see a glass half empty, because Americans -- especially those at the bottom and top of the income ladder -- are unlikely to experience relative mobility.  

[1:06]

Of those whose parents were in the bottom fifth of the income distribution, about 40% remain in the bottom themselves as adults.  Similarly, of those whose parents were in the top fifth of the income distribution, about 40% remain in the top themselves.  We call this phenomenon stickiness of the ends, because those at the ends of the income distribution are stuck there across generations.  

By this measure of mobility, the American dream is struggling.  

This means that a person can experience absolute mobility -- having more income, but not upward relative mobility -- not moving out of the bottom.  For example, if a family grows richer over time, but at a slower rate than many other families, they can experience upward absolute mobility at the same time they experience downward relative mobility.  

[1:56]

This is kind of like an escalator.  If everyone is moving up, everyone experiences upward absolute mobility.  But if people don't change positions on the escalator as it's moving, those who began at the bottom remain at the bottom, even as they grow richer.  

Now imagine a second escalator.  People are moving up, experiencing upward absolute mobility.  A person gets on at the bottom and begins walking up the stairs, passing people on the escalator ahead of him.  He is experiencing upward absolute mobility and upward relative mobility.  

PEW's Economic Project believes that both measures of mobility -- absolute and relative -- are important for having a complete picture of economic mobility in America.  Neither perspective should be taken in isolation from the other.  The project has identified a series of factors, including education, savings, and neighborhood poverty, that influence economic mobility.  To learn more about these indicators, and to read our reports, visit economicmobility.org

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