Conservative media figures have begun to claim that income inequality isn't a problem in America because people can move up and down the income ladder. In fact, income mobility in this country has declined in recent decades and is lower here than in many developed European countries.
Conservatives Argue That Income Mobility Negates The Problem Of Inequality ...
Limbaugh Falsely Claims Inequality Isn't Rising And Says, "You Know, People Move In And Out Of These Financial Categories Constantly." From Rush Limbaugh's radio show:
LIMBAUGH: Five states have lower unemployment than Iowa's 5.7 percent rate. New Hampshire is one of them. New Hampshire is also a state where the economy and particularly jobs are not number one at the top of the list.
Now, some people might say, "Well, that's no good. For crying out loud, that is the issue with everybody around the country.' Jobs. There's so many myths. The income gap getting wider -- it isn't. The rich getting richer -- they aren't. You know, people move in and out of all these financial categories constantly. They're all fluid. But you've got the first two states here that do not fit the mold of what the presidential campaign is going to focus on, and that's the economy. So ObamaCare is an issue. Government size, government reach have been issues in Iowa. But the economy isn't. Well, how relative is that, then? [Premiere Radio Networks, The Rush Limbaugh Show, 1/3/12]
Click here for the truth about the increase in income inequality.
Fox's Gutfeld: "There's So Much Income Mobility In This Country, We've Replaced Income Mobility With Income Inequality." From Fox News' The Five:
KIMBERLY GUILFOYLE (co-host): Pew did a survey kind of about the conflict between the rich and the poor. And three in 10 Americans, 30 percent, say there are very strong conflicts between poor people and rich people. And further, 46 percent, a plurality, believe that most rich people are wealthy mainly because they know the right people or they were born into very wealthy families. So, you know -- but a lot of them, 43 percent, have a favorable view of people who [unintelligible]
DANA PERINO (co-host): They want to be them.
GREG GUTFELD (co-host): The weird thing about this conflict -- and it's a new conflict because the race card isn't working anymore -- is now the rich card. And they're tr-- it's a phenomenon that's endemic in capitalism, and that in when new people arrive to your country, they have less than the people that are already here. That's capitalism. And then they move -- as they move out, new people move in.
BOB BECKEL (co-host): If -- I'm sorry. Go ahead. Go ahead.
ERIC BOLLING (co-host): No, I'm just -- I'm trying to figure out how Obama is all of a sudden the guy for the, you know, the 99 percent. He's got a quarter of a billion dollars in the coffer already, he hangs out with millionaires and billionaires, he spends 10 days in Hawaii, 14 days in Martha's Vineyard, 15 days a couple of months ago -- back. Please.
GUILFOYLE: Seventy-three fundraisers.
BOLLING: He's of the 1 percent or the 99?
BECKEL: You know, you actually need money to run campaigns, it may surprise you, particularly this time around. But if you read that Pew research report, what it says is that the middle class is rebelling. It became a big issue. It jumped 20 points, and it jumped particularly among independents and Democrats who believe that the rich get an unfair advantage in the capitalist system.
GUTFELD: Because the media and the Democrats are pushing class warfare.
BECKEL: Well, good. That's fine, if it's working.
GUTFELD: Even if it's not true?
PERINO: But working for what, to achieve what?
BECKEL: It is true.
GUTFELD: Even if there's so much income mobility in this country, we've replaced income mobility with income inequality.
BECKEL: The most people believe what is true, and that is that hedge fund operators and others get an advantage over the average person. [Fox News, The Five, 1/12/12]
O'Reilly Uses Sports Salaries To Explain Income Inequality; Dick Morris Touts "Upward Mobility" As Contrast To Inequality. From Fox News' The O'Reilly Factor:
DICK MORRIS (Fox News political analyst): In 1980 before Reagan took office, those -- the top one percent was making less than 10 percent of the income. Now, they are making close to 40 percent of the income. I'm sorry they were making about 20 percent of the income. Now they are making close to 40 percent.
BILL O'REILLY (host): It's doubled. But -- but the world has changed since 1980. It's a global economy now.
Look, all you have to do is look at professional sports and how the salaries for the superstars are now off the charts Peyton Manning, for example, I mean somebody who can bring in fans and who can win games --
O'REILLY: -- is much more valuable in 2011 than they were in 1980 because -- wait, wait, because of television, worldwide cable, Internet, all of these things make very few people very valuable. And -- and this is not getting across. The economics of capitalism have changed with the technology that makes success so pervasive.
MORRIS: But there's a very -- I agree with that but there is a very important point that's lost in this. They divide the country into the top fifth, middle, middle, middle and bottom fifth. And the liberal groups say the top fifth has gotten richer and the bottom fifth has dropped or stayed the same. But it's a new bottom fifth.
They did a study in 1990 where they took the people that were in the bottom fifth. And said where were they 10 years later. Only 16 percent of them was still in the bottom fifth; 18 percent were in the top fifth.
O'REILLY: Yes, capitalism gives people the opportunity.
MORRIS: And the rest were in the individual upward mobility.
MORRIS: The poor are getting poorer but they are poor, they are new immigrants.
O'REILLY: Now, is this going to be a problem, this so-called income distribution which we shattered but people are still going to respond to it for the Republican Party which throws in with the top one percent? They throw in with them. [Fox News, The O'Reilly Factor, 10/26/11, transcript via Nexis]
... Or That Mobility In America Is Higher Than In Other Comparable Economies ...
Hoover Institution Fellow Shelby Steele In WSJ: "America Has More Social Mobility Than Any Heterogeneous Society In History." From a Wall Street Journal op-ed by Shelby Steele, senior fellow at Stanford University's Hoover Institution:
How can the GOP combat the president's cultural charisma? It will have to make vivid the yawning gulf between Obama the flattering icon and Obama the confused and often overwhelmed president. Applaud the exceptionalism he represents, but deny him the right to ride on it as a kind of affirmative action.
Lastly, there must be a Republican message of social exceptionalism. America has more social mobility than any heterogeneous society in history. Isn't there a great Republican opportunity to be had in urging minorities to at last move out of their long era of protest -- in which militancy toward the very society they struggled to join was the way ahead? Aren't Republicans uniquely positioned to offer minorities a liberation from both dependency and militancy? [The Wall Street Journal, 5/25/11]
... Or Admit That Mobility Has Declined, But Blame It On Obama
Big Government: "Three Years Into America's Managerial State Experiment, The Middle Class Is In Revolt Over Loss Of Upward Mobility." From Andrew Breitbart's Big Government:
C.S. Lewis remarked that every increase in man's power over nature can turn out to mean an increase in the power of some men over others, with nature as its instrument. He stated:
"Given technological progress, we need to fight hard to retain our clarity about the nature and rights of human beings. We hear of human "autonomy" and of man's "control of his own destiny." But the autonomy is enjoyed by a select (or self-selected) few, and the control is exercised by a shrinking elite."
Three years into America's managerial state experiment, the middle class is in revolt over loss of upward mobility.
They see the stimulus programs as rewarding the elites and pacifying the poor. The middle class already had healthcare through employment and was looking for infrastructure to actually drive on. After $4 trillion in deficit spending there is no million-man construction cycle building new inter-state freeways, hydro-electric dams or Keystone XL Pipeline. What there has been is Goldman Sachs bail-outs and Solyndra et al crony capitalism. The middle class has continued to be punished with loss of their life savings as real estate prices continue to fall.
Over the last 30 years since Ronald Reagan refocused nation state competition onto the market; communism and fascism have gone into the dust bowl of history, while the U.S. economy grew from $2.8 trillion to over $15 trillion. The Obama Administration sought to transition Reagan's successful laissez-faire state into the European managerial market state, at just the wrong time. The middle class may see America as failing; but they see Europe as a failure. American families cringe when they watch television stories of endless platoons of German and French VIBs -- very important bureaucrats -- dutifully shoveling subsidies to rioting Portuguese, Italian, Greeks, and Spanish socialists. Having seen the future of the European managerial state; American families want a return Reagan's worldview of the laissez-faire market state as the vehicle of middle class upward mobility. [Big Government, 11/24/11]
Wash. Times' Kuhner: "The Engine Of Prosperity And Upward Mobility" Has Been "Savaged By Bureaucratic Sadism." From a column by Jeffrey Kuhner in The Washington Times:
In addition, his administration's anti-business regulations -- discouraging offshore oil drilling, sanctioning Boeing for building a big plant in South Carolina, onerous labor and environmental mandates -- and virulent class warfare have undermined economic growth. His cynical decision to delay the Keystone XL pipeline has cost more than 20,000 jobs. The private sector -- the engine of prosperity and upward mobility -- has been savaged by bureaucratic sadism. If Mr. Obama truly cared for working Americans, he would end his experiment in European-style socialism. [The Washington Times, 12/8/11]
Reality: Family Income Has Become More Likely To Depend On Starting Position; Mobility Hasn't Offset Rising Inequality
Boston Fed Economist: In Four Decades Concluding In 2006, "Family Income Mobility Across The Income Distribution Decreased" And "Families' Later-Year Incomes Increasingly Depended On Their Starting Place." From a working paper by Katharine Bradbury, senior economist and policy adviser at the Federal Reserve Bank of Boston:
Overall, the evidence indicates that over the 1969-to-2006 time span, family income mobility across the distribution decreased, families' later-year incomes increasingly depended on their starting place, and the distribution of families' lifetime incomes became less equal. [Federal Reserve Bank of Boston, 10/20/11]
Boston Fed Economist: "A Family's Position At End Of A Period In The 2000s" Is "More Correlated With Its Start Position Than Was The Case 20 Years Ago." From the Boston Fed:
Long-term income adjusted for family size is considerably more unequally distributed among families for periods ending in the 2000s than for periods ending in the 1970s and '80s. That is, family income mobility has been insufficient to stem increases in inequality of long-term income. Furthermore, other mobility measures indicate that a family's position at end of a period in the 2000s was less likely to have been produced by a random process and more correlated with its start position than was the case 20 years earlier. [Federal Reserve Bank of Boston, 10/20/11]
Boston Fed Economist: Mobility "Has Not Been Sufficient To Offset The Considerable Rise In Short-Term Inequality." From the Boston Fed:
[A] key reason for studying mobility trends is a concern with lifetime income inequality. Although the calculations reported here track individuals over 10 years (far less than a lifetime), the distribution of long-term income (family income averaged over 10 years, or even 16 years) was much more unequal in recent periods than in the 1970s. The trend has been visibly steep, regardless of the inequality measure or income measure employed. Thus, whether the declines in measured mobility are significantly different from zero or not, mobility levels and trends have not been sufficient to offset the considerable rise in short-term inequality. [Federal Reserve Bank of Boston, 10/20/11]
Boston Fed Economist: Comparison Of Mobility Trends Before And After Taxes And Transfers "Suggests" That Changes To These Policies Since 1981 Have Exacerbated Mobility Declines. From the Boston Fed paper:
By and large, different mobility measures and income measures yield similar pictures of mobility trends. Most mobility measures indicate that family income mobility was lower in more recent periods (the 1990s into the early 2000s) than in earlier periods. Comparing 1977-1987 or 1981-1991, when many of the measures peaked, with the most recent period (1995-2005), mobility declined to a statistically significant degree according to most measures, both overall and for individuals beginning near the top or bottom of the income distribution. However, comparing periods ending in the most recent 10 or so years (1985-1995 through 1995-2005), depending on the mobility measure employed, trends are difficult to discern, except that mobility was lower in the last period (1995-2005 or 1996-2006) than in the period immediately 2before (1993-2003 or 1994-2004). Comparing these post-government trends with results based on pre-government income suggests that the redistributive impact of the U.S. tax and transfer system may have contributed more positively to mobility in the 1970s than it has since 1981 [Federal Reserve Bank of Boston, 10/20/11]
Studies Show Mobility Is Lower In The United States Than In Many European Nations
Pew Economic Mobility Project: Americans "Less Mobile Than Many Of Their European Counterparts." From the Economic Mobility Project, a project of the Pew Charitable Trusts:
In the Economic Mobility Project's latest public opinion poll, nearly 7 in 10 Americans said they had already achieved, or expected to achieve, the American Dream at some point in their lives. The promise of upward mobility, regardless of one's starting point, sustains American optimism even in the face of national economic hardship.
However, several studies investigating economic mobility across a range of countries have found that Americans are less mobile than many of their European counterparts. Comparing rates of relative mobility across countries -- a measure of how likely a child's rank on the income distribution will mirror that of his or her parents' -- shows that Americans are more likely than citizens of several other nations to be stuck in the same position economically as their parents. [Pew Charitable Trusts, accessed 1/13/12]
Pew: Link Between Parents' Education And Children's Outcomes "Is Generally The Strongest In The United States." From the Economic Mobility Project:
In all countries, parental education predicts a range of childhood outcomes across the life course, but the degree varies across countries. The connection between parents' education and children's outcomes is generally the strongest in the United States for all categories measured. [Pew Charitable Trusts, accessed 1/13/12]
Pew: Better Policies Needed To Address Mobility, "Especially In The United States, Where The Relationship Between Parental Socioeconomic Advantage And Child Outcomes Is The Strongest." From the Economic Mobility Project:
Differences in mobility-relevant children's outcomes according to family background are established at very early ages -- as early as outcomes can be measured. Policies and institutions influence the magnitude of these initial gaps, since the strength of the relationship between family background and children's outcomes differs by country. However, within each country, once gaps were set, they did not decrease as children aged. The [Cross-National Research on Intergenerational Transmission of Advantage] studies demonstrate the need to develop more effective policies to narrow socioeconomic gaps and better realize the equality of opportunity that is so fundamental to economic mobility -- especially in the United States, where the relationship between parental socioeconomic advantage and child outcomes is the strongest. [Pew Charitable Trusts, accessed 1/13/12]
Brookings Scholar Sawhill: "I Don't Think You'll Find Too Many People Who Will Argue" With Idea That "U.S. Does Not Have As Much Mobility As Most Other Advanced Countries." From The New York Times:
"It's becoming conventional wisdom that the U.S. does not have as much mobility as most other advanced countries," said Isabel V. Sawhill, an economist at the Brookings Institution. "I don't think you'll find too many people who will argue with that." [The New York Times, 1/5/12]