May 25th Wall St. Journal tells of a new Report on economic mobility
in the USA.
The news isn't good.
May 25, 2007
Not Your Father's Pay:
Why Wages Today Are Weaker
By GREG IP
May 25, 2007; Page A2
American men in their 30s today are worse off than their fathers'
generation, a reversal from just a decade ago, when sons generally
were better off than their fathers, a new study finds.
The study, the first in a series on economic mobility undertaken by
several prominent think tanks, also says the typical American
family's income has lagged far behind productivity growth since 2000,
a departure from most of the post-World War II period.
The findings suggest "the up escalator that has historically ensured
that each generation would do better than the last may not be working
very well," says the study, which is scheduled for release today. The
study was written principally by John Morton of the Pew Charitable
Trusts, which is leading the series, called the Economic Mobility
Project, and Isabel Sawhill of the Brookings Institution. Other
participating think tanks are the Heritage Foundation, American
Enterprise Institute and the Urban Institute. (See the study.1)
In 2004, the median income for a man in his 30s, a good predictor of
his lifetime earnings, was $35,010, the study says, 12% less than for
men in their 30s in 1974 -- their fathers' generation -- adjusted for
inflation. A decade ago, median income for men in their 30s was
$32,901, 5% higher than 30 years earlier. Ms. Sawhill said she isn't
sure why men's wages have stagnated. "It seems there's been some
slowdown in economic growth, it's possible that the movement of women
into the labor force has affected male earnings, and it's possible
that men are not working as hard as they used to."
The study suggests that absolute mobility -- the rate at which an
entire generation's lot improves relative to previous generations --
has declined. But within a particular generation, individuals can
still get ahead if relative mobility, the rate at which the rich and
poor trade places, remains high. Poor fathers may have rich sons, and
vice versa.
MORE
2 • Full text of the mobility report (PDF)3
• Juggle Blog: Better off than your parents?4
The report also found that between 1947 and 1974, productivity, or
output per hour, and median family income, adjusted for inflation,
both roughly doubled. Between 1974 and 2000, productivity rose 56%
while income rose 29%. Between 2000 and 2005, productivity rose 16%
while median income fell 2%, challenging "the notion that a rising
tide will lift all boats," the report says.
Ms. Sawhill said several factors could explain the divergence: a
growing share of income going to the highest-paid workers, or to
profits; an increased share of labor compensation going toward
benefits such as health care; or a decline in the number of wage
earners in the typical family.
Write to Greg Ip at [EMAIL PROTECTED]
URL for this article:
http://online.wsj.com/article/SB118005313993514160.html
Hyperlinks in this Article:
(1) http://www.economicmobility.org/assets/pdfs/EMP American Dream
Report.pdf
(2) http://blogs.wsj.com/juggle/2007/05/25/are-you-better-off-than-
your-parents/
(3) http://www.economicmobility.org/assets/pdfs/EMP American Dream
Report.pdf
(4) http://blogs.wsj.com/juggle/2007/05/25/are-you-better-off-than-
your-parents/
(5) mailto:[EMAIL PROTECTED]
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