Upward Mobility Is Alive and Well in America

Studies show the vast majority of adults have higher income than their parents did

By Phil Gramm and John Early. Excerpts:

"Analysts for the Pew Charitable Trusts in 2012 quantified the economic advancement of American families. They compared the inflation-adjusted income of parents with that of their children some 30 years later. (The parents in the study were 41 years old on average and the children 45 when their incomes were measured.)

Measured by inflation-adjusted household income, 93% of children who grew up the bottom income quintile were better off than their parents. Of children in the middle three-fifths, 86% grew up to live in families with higher incomes than their parents. Even among those in the top income quintile, 70% were better off."

"Over the 35 years of the study, real median family income rose by 89%. This American cornucopia was spread across the entire income distribution—with the exception of the prime work-age adults in the bottom quintile who dropped out of the workforce as government transfer payments exploded beginning in the mid-1960s."

"the share of adult children who grow up to live in a household in the same income quintile as their parents is surprisingly small. The chart shows that for the middle three quintiles, only 22.6% to 24.4% of children remain in their parents’ quintile"

"On average, 39% of those children as adults rose to a higher quintile and 37% fell to a lower one."

"Of children reared in the top quintile, 62% fell to one of the lower quintiles, including more than 9% to the bottom quintile."

"63% of children who grew up in bottom quintile families rose to a higher quintile, 6.1% rising all the way to the top quintile."

"The share of the bottom quintile who worked fell from 68% in the parents’ generation to 36% in the children’s generation."

"To rise out of the bottom quintile, children’s inflation-adjusted income had to increase by more than the growth of the income ceiling for the bottom quintile during the years between generations—35% in Mr. Strain’s study. Children reared in any other quintile had to see their real income as adults rise on average by roughly 50% above their parents’ income simply to avoid falling into a lower quintile than their parents. The climb to a higher quintile is steeper still."

"When the income of the children is compared with the inflation-adjusted income of their parents using the real income quintiles of their childhood in 1982-86 rather than the income quintiles of 2013-17, measured mobility is dramatically greater. Only 28% of children reared in the bottom quintile had adult incomes that would put them in the bottom childhood quintile, and 26% rose all the way to the childhood top quintile, which required a minimum income of only $111,416 (in 2016 dollars) for a family of four in 1982-86. A family of four with that income in 2013-17 would have been in the middle quintile based on 2013-17 income distribution."

"Many of today’s middle-income adults have a real standard of living that would have put them in the top quintile in their parents’ era."