NCPA - National Center for Policy Analysis


June 15, 2009

There is little reason to believe that reducing income inequality would improve the welfare of the poor. Instead, our focus should be on advocating measures that will advance the absolute well-being of the working poor, say Jeffrey M. Jones, a research fellow at the Hoover Institution, and Daniel Heil, a graduate student at Pepperdine University.

How much income mobility exists in America?  Research consistently affirms that there is substantial upward income mobility in the United States, with the lowest income earners typically showing the strongest results:

  • From 1996-2005, the Treasury found that more than 55 percent of taxpayers moved to a different income quintile; more than half the people in the lowest fifth of earners moved to a higher quintile over this period.
  • The study also reveals that income mobility has increased, not decreased, during the past 20 years.
  • For example, 47.3 percent of those in the lowest income quintile in 1987 saw their incomes increase by at least 100 percent by 1996; that number jumped to 53.5 percent from 1996 to 2005.

Marriage and family also significantly enhance income mobility, say Jones and Heil:

  • Married couples tend to have larger, sustained incomes, in part because of the prevalence of multiple earners in those families.
  • Family poverty is largely a single-parent phenomenon -- for 2007 show that 24.5 percent of all single-parent families lived below the poverty line, compared to only 4.9 percent of married-couple families.

Finally, income mobility is due to persistence in work.  Persistence also applies to the long run as incomes rise as workers age, say Jones and Heil.

Sensible, time-tested steps that produce upward income mobility point to one conclusion: there are no shortcuts.  The goals are to work, invest, partner, learn and to focus on personal responsibility, say Jones and Heil.

Source: Jeffrey M. Jones and Daniel Heil, "The Politics of Envy," Hoover Institution/Hoover Digest, No. 2, Spring 2009.

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