Sylvia Nasar (May 18, 1992): Rich and Poor Likely to Remain So https://www.nytimes.com/1992/05/18/business/rich-and-poor-likely-to-remain-so.html?searchResultPosition=305: "In the continuing debate over the distribution of wealth and income—the richest 1 percent of American families control more wealth than the bottom 90 percent—one school of thought says findings like this, however extreme, do not present a true picture.... Even if the raw numbers are accurate, these economists say, the portrait fails to capture the amazing fluidity and flux of American society, the hardscrabble beginnings of many a millionaire, from Bobby Bonilla to Ross Perot. And the richest person in America these days is not a Rockefeller or a du Pont but William Gates, founder of the Microsoft Corporation, the leading software company. But... rags-to-riches remains the economic exception, not the rule.... If anything, economists say, the climb out of poverty has become harder in the last decade or two...

...'Someone whose parents are poor has a lower expected income, on average, than someone whose parents are rich', said Gary Solon, a University of Michigan economist. 'It's not that you inherit the same position, but there's a substantial correlation'. A child whose father is in the bottom 5 percent of earners, for instance, has only 1 chance in 20 of making it into the top 20 percent of families, according to a coming article in The American Economic Review by Professor Solon.... 'All you have to do is look at L.A. to decide that there are lots of people who think their permanent prospects are pretty crummy', said David M. Cutler, an economist at Harvard University.... Apart from changes in income and wealth that reflect the normal lifetime pattern... most Americans do not move a great many rungs up or down....

Much of this short-term turnover may be illusory... a large fraction of year-to-year changes... reflects reporting error, timing of income like capital gains, episodes of illness or unemployment and other transitory effects... In the 1980's, it became easier for those in the middle class to become rich... harder for the rich to fall... harder to climb out of poverty...


#noted #2019-10-07

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