From the Fiscal Times, questions about income mobility in the United States. Its not what it once was, and this makes the concentrationof wealth at the top even more problemtic than it would otherwise be:
Income inequality in the U.S. has been rising for the last several decades, and with it concern about the consequences. For example, to what extent does the large flow of income into the hands of financial executives give them the power to influence Congress through campaign donations? How does this have an impact on the willingness of legislators to impose regulations that would stabilize the financial system but inhibit the ability of the financial industry to make the huge profits that fund political campaigns?
If economic mobility increased along with the increase in inequality, then this would at least partially offset the worries associated with the rising concentration of income. To see how, suppose there are two types of jobs in society. One type is desirable and well paying; the other is hard, miserable work with little compensation. Suppose also that one group in society always gets the good jobs while the other gets the bad even though most people within each group are equally qualified to do both types of work. Thus, this is a highly unequal outcome. However if there is mobility – if we prevent one group from keeping the good jobs through political power or other means and instead use a lottery at the beginning of each week to see which of the qualified workers does which job – then the random allocation of jobs over time helps to solve the inequality problem.
What has happened to mobility in the U.S.? Is it any easier to move up and down the ladder than it used to be? Unfortunately, the answer is no.
