Share of Income Gains by Quintile - Great Depression til Now

I'm not convinced. You have to look at each person's context, because your family's values will take you a long way (or hold you back).

And the US seems to have lower mobility than other rich nations: http://voices.washingtonpost.com/ezra-klein/2010/08/research...

Your observation is a known flaw with this line of thinking. In fact, it's such a powerful rejoinder I'm really surprised the NYT didn't address it.

If I remember correctly, movement among quintiles in the US is such that the average person moves through many. Yes, there are the permanently wealthy, and the permanently poor, but they are the exceptions rather than the rule. So when people say "the rich get richer" what they really mean is that the income segment defined by that qunintile, over all, got richer. Individual people, however, move around a lot, as anybody who has participated in the economy in the last couple of decades can attest.

I know I'm not sourcing my statement. Apologies. I'm simply relying on several rebuttals to this type of graph I've read over the years. Hopefully somebody else will be able to provide some more substance and move the discussion along.

EDIT: Random Google link: http://www.urban.org/publications/306775.html

These studies of relative mobility have produced remarkably consistent results, with regard to both the degree of mobility and the extent of changes in mobility over time.[5] Mobility in the United States is substantial according to this evidence. Large proportions of the population move into a new income quintile, with estimates ranging from about 25 to 40 percent in a single year. As one would expect, the mobility rate is even higher over longer periods—about 45 percent over a 5-year period and about 60 percent over both 9-year and 17-year periods.

The other issue is the that level of consumption of everyone in every household income quintile in the United States has steadily been going up (in a way not fully reflected in the consumer price index or other gauges of consumer behavior), so almost everyone has more stuff, more space, and more comfort and health than people in the "same" income quintile did in my childhood. There may indeed be some structural, societal problems caused by uneven income distribution (what I have liked about the United States and Taiwan, the two countries I have lived in the longest, is that they have tended to have better Gini coefficients

https://www.cia.gov/library/publications/the-world-factbook/...

http://hdrstats.undp.org/en/indicators/161.html

than some other countries around the world), but there will ALWAYS be some people who make more money than some other people living in the same country, and the main issue is to help each country and all the people living in each country gain prosperity over time, which has been the general worldwide trend.

http://www.theworldeconomy.org/

http://www.economist.com/node/18679001

To reply to a question in another comment below:

So the working class has been taken to the slaughterhouse?

No. Americans of all income levels still enjoy unparalleled prosperity compared to most people around the world, and the high rates of voluntary immigration into the United States even from countries that are themselves prosperous show that something about the overall mix of living conditions here isn't "slaughtering" people but rather meeting many people's aspirations on balance, in some way that makes moving far away from home an appealing idea.

This analysis also ignores actual purchasing power (non-core inflation). Wages may have stagnated, but purchasing power for non-core goods has soared.

Free trade is a powerful cause of both wage stagnation and purchasing power. Sure, eliminate free trade and the working class will see wages go up; but they'll spend those wages on $4000 plasma TVs and $50,000 economy cars.

You are introducing an additional variable that doesn't make any sense to include. Even if mobility is greater now than it was (something of which I am skeptical), the fact remains that the top quintile is still only ever 20% of the population. If one new person moves into the top quintile, that means someone else has moved out.

"Most people's earning potential goes up over time." This is generally true, but it goes up like compound interest. If you start high, it tends to get massively high by the time you retire. If you start in the middle range, the results are much less impressive. If you stay poor for very long after being done with school, your gains tend to be miniscule.