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The article makes some interesting points but there seems to be a flawed use of statistics. Particularly the part about "the percentage likelihood that a bottom

The article makes some interesting points but there seems to be a flawed use of statistics. Particularly the part about "the percentage likelihood that a bottom 10 percenter will ever make it to the top 10 percent. For 99 out of 100 people, rags never lead to riches." Well, what would you expect? There's going to be a pure mathematical limit to that sort of movement, nevermind issues of income mobility. To take an absurd example, say there's a 50/50 chance of going from rags to riches. That would mean half of the bottom 10%, 5% of the population would move up to the top 10% of the population. And somehow the middle 80% don't manage that feat. You would expect the probability of going from the bottom to the very top would be low. Instead, the article tries to paint a negative picture. It points out there's a 32% chance a child born in the bottom 10% will stay in the bottom 10%, when you could just as well point out that child has a 68% chance of moving out of the bottom 10%. Bringing in statistics about how many of them move from that percentile to the highest percentile obscures rather than clarifies the issue of income mobility. Then there's his universal welfare idea, which at $250,000 per person and a quick back-of-the-envelope calculation would only cost about 56 trillion dollars. Plus another 2 trillion or so per year with population growth. That said it's worth reading, the “individual development accounts” idea is definitely interesting.

nazgulnarsil 17y ago
trying to paint those statistics as negative is hilarious on the articles part. we have insane mobility compared to any other society at any time in human history.
- eru 17y ago
  While our situation is quite good (and in absolute term probably the best ever), I doubt that we (=US 2010?) have "insane mobility" --- measured in actual turnover between quantiles of wealth from one generation to the next. Does anybody have some sources? (I'd guess it would be interesting to look at societies in great turmoil (e.g. England after 1066, French Revolution, Communist revolution in China) or societies with more equality of wealth than the US (e.g. Scandinavian countries). They may well have more mobility (at least in a purely technical sense).)
  - guelo 17y ago
    You are right, mobility in the US is not what conservatives think it is. Sources: http://www.americanprogress.org/issues/2006/04/b1579981.html http://www.americanprogress.org/issues/2006/04/b1579981.html "By international standards, the United States has an unusually low level of intergenerational mobility: our parents’ income is highly predictive of our incomes as adults. Intergenerational mobility in the United States is lower than in France, Germany, Sweden, Canada, Finland, Norway and Denmark. Among high-income countries for which comparable estimates are available, only the United Kingdom had a lower rate of mobility than the United States. From The Economist, http://www.brendan-nyhan.com/blog/2005/01/the_economist_o.html http://www.brendan-nyhan.com/blog/2005/01/the_economist_o.ht... "would-be Horatio Algers are finding it no easier to climb from rags to riches, while the children of the privileged have a greater chance of staying at the top of the social heap."
    - nazgulnarsil 17y ago
      who mentioned national lines? I don't regard imaginary lines with much respect. we're talking worldwide here.
      - gjm11 17y ago
        Who mentioned national lines? (1) The original article, which was talking about, e.g., the chances of moving out of the top or bottom 10% by wealth of US society. (2) The person you were replying to (you can tell he was talking about the US by, e.g., comparing his figures for the $250k proposal to the US population, though I think he misunderstood the proposal). (3) The two people who replied to you. Or, in other words, apparently everyone else in this thread apart from you. How is one supposed to tell that "we have insane mobility compared to any other society at any time in human history" was meant to mean everyone, worldwide? Indeed, how can that possibly be true (what do you think is the mobility rate out of the poorest 10% of the world population?), or make sense (given that it requires that you regard, say, the US, China, Afghanistan and Burundi as parts of a single "society")?
        17y ago
- pln 17y ago
  Untrue, compared to both previous decades in the US, and other nations today.
gjm11 17y ago
I think your comment on the $250k proposal is wrong. The US has a population of, let's say, 300M. In any year, let's say 1/60 of that many -- 5M -- are just turning 18, which is when Bowles proposes handing out the money. (He's not proposing to give that much to everyone all at once.) So the annual cost is $250k times 5M, or about $1T. There's no $56T up-front cost. Now, $1T/year is an awful lot: it's about 1/4 of what the US government currently spends in a typical year. It's about what the US government currently spends on "defense". It's hard to see where the money could come from. On the other hand, it would completely obliterate poverty in the US. On the other other hand, it's very convenient for a lot of people that there is poverty in the US; without poverty, no one would work for very low salaries, which means a lot of things that are currently cheap would become more expensive. (You can generally recognize countries with less income inequality because low-end goods and services cost more.) On the other other other hand, it does seem like it would make entrepreneurship much more widely accessible. Bowles is a very smart guy. The idea may be crazy, but it's unlikely to be stupid.
- timwiseman 17y ago
  No, the idea is not stupid, but I think you are making some unfounded assumptions. it would completely obliterate poverty in the US. Not really, it would do little to help people in poverty already past 18 (unless they had children who were both just about to turn 18 and those children were generous...). Even for those that benefitted from this, to assume they would not go back to poverty you have to assume they will use it wisely (and possibly have some luck too.) If they go to college or start a business with that money, then they probably will move up and sustain themselves at least in the middle class. Probably. On the other hand, I bet a large percentage would spend it quickly and have relatively little to show for it at the end. Even those who start a business/go to college are not gaurunteed to stay in the middle class, they just have a good shot. Many businesses fail, and then those founders would be left with little but that experience. Many people with degrees are unemployed right now. I am not saying it is a bad idea necessarily, and I am certainly not about to dismiss it as stupid, but I do not think it will come close to wiping out poverty.
  - isleyaardvark 17y ago
yummyfajitas 17y ago
Additionally, he is making the implicit assumption that low parental income causes low adult income, and therefore hard work doesn't matter. But that's nonsense. It's also equally possible that some heritable (not necessarily genetic) trait causes both low parental and low child income. One plausible alternative explanation: lazy parents tend to have lazy children and lazy people tend to be poor. This causes a correlation between parent and child income, in spite of the fact that hard work is the way out of poverty.
- jbooth 17y ago
  I'm sure your plausible alternative explanation feels great to say to yourself, but that's just not how it works. If you're born in a poor family you have 10 million things going against you from day 1: quality of educational opportunity, access to credit or a buffer if you have a bad run of luck, spare capacity to actually try and get better at things because you're not trying to put dinner on the table constantly, neighborhood cultural factors, etc etc etc. Hard work matters -- but your baseline is probably more important.
  - yummyfajitas 17y ago
    Do you have evidence that my plausible alternative hypothesis is not how it works, or are you just guessing? In any case, I don't believe my alternate hypothesis is a complete explanation. All I'm doing is showing why Bowles' statistics don't prove his case at all. All they do is prove that whatever factor causes low income (which may well be hard work) is hereditary. Incidentally, one of your hypothesis is demonstrably false. 90% of the poor do have "spare capacity to actually try and get better at things because [they are] not trying to put dinner on the table constantly...". 80% of the poor (people below the poverty line) don't work at all (and are not looking for work) and 90% don't work full time (at least 27 weeks/year). So at least 90% of the poor do have spare capacity to improve their lot. http://www.bls.gov/cps/cpswp2007.pdf http://www.bls.gov/cps/cpswp2007.pdf
    - jbooth 17y ago
      Yeah, there's a metric ton of research, saying that your alternative hypothesis is far from a complete picture of the story. Pick your field : psychology, sociology, economics -- there's stuff about poverty in every discipline. There's also a lot of research out there about why you would prefer that line of reasoning you expressed, and would argue it in order to feel good about yourself.

nazgulnarsil 17y ago

trying to paint those statistics as negative is hilarious on the articles part. we have insane mobility compared to any other society at any time in human history.

eru 17y ago
While our situation is quite good (and in absolute term probably the best ever), I doubt that we (=US 2010?) have "insane mobility" --- measured in actual turnover between quantiles of wealth from one generation to the next. Does anybody have some sources? (I'd guess it would be interesting to look at societies in great turmoil (e.g. England after 1066, French Revolution, Communist revolution in China) or societies with more equality of wealth than the US (e.g. Scandinavian countries). They may well have more mobility (at least in a purely technical sense).)
- guelo 17y ago
  You are right, mobility in the US is not what conservatives think it is. Sources: http://www.americanprogress.org/issues/2006/04/b1579981.html http://www.americanprogress.org/issues/2006/04/b1579981.html "By international standards, the United States has an unusually low level of intergenerational mobility: our parents’ income is highly predictive of our incomes as adults. Intergenerational mobility in the United States is lower than in France, Germany, Sweden, Canada, Finland, Norway and Denmark. Among high-income countries for which comparable estimates are available, only the United Kingdom had a lower rate of mobility than the United States. From The Economist, http://www.brendan-nyhan.com/blog/2005/01/the_economist_o.html http://www.brendan-nyhan.com/blog/2005/01/the_economist_o.ht... "would-be Horatio Algers are finding it no easier to climb from rags to riches, while the children of the privileged have a greater chance of staying at the top of the social heap."
  - nazgulnarsil 17y ago
    who mentioned national lines? I don't regard imaginary lines with much respect. we're talking worldwide here.
    - gjm11 17y ago
      Who mentioned national lines? (1) The original article, which was talking about, e.g., the chances of moving out of the top or bottom 10% by wealth of US society. (2) The person you were replying to (you can tell he was talking about the US by, e.g., comparing his figures for the $250k proposal to the US population, though I think he misunderstood the proposal). (3) The two people who replied to you. Or, in other words, apparently everyone else in this thread apart from you. How is one supposed to tell that "we have insane mobility compared to any other society at any time in human history" was meant to mean everyone, worldwide? Indeed, how can that possibly be true (what do you think is the mobility rate out of the poorest 10% of the world population?), or make sense (given that it requires that you regard, say, the US, China, Afghanistan and Burundi as parts of a single "society")?
      - 17y ago
pln 17y ago
Untrue, compared to both previous decades in the US, and other nations today.

gjm11 17y ago

I think your comment on the $250k proposal is wrong. The US has a population of, let's say, 300M. In any year, let's say 1/60 of that many -- 5M -- are just turning 18, which is when Bowles proposes handing out the money. (He's not proposing to give that much to everyone all at once.) So the annual cost is $250k times 5M, or about $1T. There's no $56T up-front cost. Now, $1T/year is an awful lot: it's about 1/4 of what the US government currently spends in a typical year. It's about what the US government currently spends on "defense". It's hard to see where the money could come from. On the other hand, it would completely obliterate poverty in the US. On the other other hand, it's very convenient for a lot of people that there is poverty in the US; without poverty, no one would work for very low salaries, which means a lot of things that are currently cheap would become more expensive. (You can generally recognize countries with less income inequality because low-end goods and services cost more.) On the other other other hand, it does seem like it would make entrepreneurship much more widely accessible. Bowles is a very smart guy. The idea may be crazy, but it's unlikely to be stupid.

timwiseman 17y ago
No, the idea is not stupid, but I think you are making some unfounded assumptions. it would completely obliterate poverty in the US. Not really, it would do little to help people in poverty already past 18 (unless they had children who were both just about to turn 18 and those children were generous...). Even for those that benefitted from this, to assume they would not go back to poverty you have to assume they will use it wisely (and possibly have some luck too.) If they go to college or start a business with that money, then they probably will move up and sustain themselves at least in the middle class. Probably. On the other hand, I bet a large percentage would spend it quickly and have relatively little to show for it at the end. Even those who start a business/go to college are not gaurunteed to stay in the middle class, they just have a good shot. Many businesses fail, and then those founders would be left with little but that experience. Many people with degrees are unemployed right now. I am not saying it is a bad idea necessarily, and I am certainly not about to dismiss it as stupid, but I do not think it will come close to wiping out poverty.
- isleyaardvark 17y ago

yummyfajitas 17y ago

Additionally, he is making the implicit assumption that low parental income causes low adult income, and therefore hard work doesn't matter. But that's nonsense. It's also equally possible that some heritable (not necessarily genetic) trait causes both low parental and low child income. One plausible alternative explanation: lazy parents tend to have lazy children and lazy people tend to be poor. This causes a correlation between parent and child income, in spite of the fact that hard work is the way out of poverty.

jbooth 17y ago
I'm sure your plausible alternative explanation feels great to say to yourself, but that's just not how it works. If you're born in a poor family you have 10 million things going against you from day 1: quality of educational opportunity, access to credit or a buffer if you have a bad run of luck, spare capacity to actually try and get better at things because you're not trying to put dinner on the table constantly, neighborhood cultural factors, etc etc etc. Hard work matters -- but your baseline is probably more important.
- yummyfajitas 17y ago
  Do you have evidence that my plausible alternative hypothesis is not how it works, or are you just guessing? In any case, I don't believe my alternate hypothesis is a complete explanation. All I'm doing is showing why Bowles' statistics don't prove his case at all. All they do is prove that whatever factor causes low income (which may well be hard work) is hereditary. Incidentally, one of your hypothesis is demonstrably false. 90% of the poor do have "spare capacity to actually try and get better at things because [they are] not trying to put dinner on the table constantly...". 80% of the poor (people below the poverty line) don't work at all (and are not looking for work) and 90% don't work full time (at least 27 weeks/year). So at least 90% of the poor do have spare capacity to improve their lot. http://www.bls.gov/cps/cpswp2007.pdf http://www.bls.gov/cps/cpswp2007.pdf
  - jbooth 17y ago
    Yeah, there's a metric ton of research, saying that your alternative hypothesis is far from a complete picture of the story. Pick your field : psychology, sociology, economics -- there's stuff about poverty in every discipline. There's also a lot of research out there about why you would prefer that line of reasoning you expressed, and would argue it in order to feel good about yourself.