Our senior economist Alan Reynolds is once again in print with the Wall St. Journal. Check out his thoughts on the perseverance of the American Dream here.
Here's a paragraph:
To repeat, there is no evidence that it has become harder to get ahead through hard work at school and on the job. Efforts to claim otherwise appear intended to make any gaps between rich and poor appear unfair, determined by chance of birth rather than personal effort. Such efforts require both a denial that progress has been widespread and an exaggeration of income differences. To deny progress, the Times series claims that "for most workers, the only time in the last three decades when the rise in hourly pay beat inflation was during the speculative bubble of the 90's." Could anyone really believe most workers have rarely had a real raise in three decades? Real income per household member rose to $22,966 in 2003 from $16,420 in 1983 (in 2003 dollars)--a 40% gain.
Ignoring other very real statistics, such as the net worth of the average African-American family is $5,000, a Latino family's is $9,000, and a white family's is $88,000.
ReplyDeleteNo, he's absolutely right. White people just work harder. There are no institutional barriers whatsoever.
You guys are both out to lunch on this one.
ReplyDeleteFirst, I doubt whether either of you has anything approaching the authority Alan brings to the table in this discussion.
Second, I, too, have been a corporate guy and have observed that hard work does very often pay off. People notice and the rise begins. Tlaloc, given the fact that you post to this blog more than any of us, I suspect your output may be lacking.
Finally, I've had the chance during the last few years of my life to get to know some high powered executive types. Generally speaking, I think they earn their pay. Their work lives are parceled out in 5-10 minute segments and includes a lot of social stuff you'd often just rather not deal with.
As far as institutional barriers, I think the real issue is education and family background. If you want some method of redress there, I suspect you should include the white kid who grew up in a trailer park. He's got no connections, no family history of education, etc.
JFE, I'd like to know the source of your figures. You may well be right, but I'd like to know how these numbers were arrived at.
ReplyDeleteAlso, I'd be curious to know how you respond to the following assertions:
To stay out of poverty in America, it's necessary to do three simple things, social scientists have found: finish high school, don't have kids until you marry, and wait until you are at least 20 to marry. Do those three things, and the odds against your becoming impoverished are less than one in ten. Nearly 80 percent of everyone who fails to do those three things winds up poor. (Steven Malanga, "The Myth of the Working Poor", City Journal Autumn 2004).
Do you dispute these assertions? Are not the three things to do to avoid poverty chiefly matters of personal, and not social, responsibility?
Source. Should be the 2000 Census. Might be the 2003 HHS poverty stats. I'll have to double check.
ReplyDeleteYou can check my archives (http://lospunditos.blogspot.com) for some posts on poverty. They should be among the first.
As to your proposed dilemma, I would have to say that it ignores a myriad of other systems at work. The number one indicator of whether or not one will be poor is if their parents were poor. "Impoverished" is a subjective phrase. For example, the federal poverty guidelines list a single earner's income as $9,000 to qualify as poor. This ignores cost of living requirements. For example, in Santa Clara County, California, in 2003, the minimum necessary income to make ends meet for a single person was $24,000. The average 2002 U.S. college graduate made $18,000 in 2003.
Marriage helps lift people out of poverty because with childless expenses, dual-income families require less to live on. In 2003, for a childless, married couple in Santa Clara County required only $36,000 to make ends meet. That means two college grads (the over 20s), making the average grad salary, meets minimum income standards. Now consider that only 25% of Americans will graduate college before the age of 36.
Speaking as one of those who made that average income his first year out of college, it's not much of a life, even at twice the federal poverty limit for a single person. No health insurance, for starters.
Personal responsibility arguments always ignore the fact that no person exists in a vacuum or a microcosm. There are myriad systems at work in people's lives. See one of my back posts for info on how federal poverty lines are calculated (here's a hint, they're about 9 months out of date by the time they're released and there's no variation for cost of living in different states or counties).