I just finished reading Thomas Frank’s One Market Under God – a diatribe about the way in which 1990s business writers (particularly the prophets of the new economy) tried to assert that the changes in business practices then (casualisation, outsourcing etc) were inevitable and could not and should not be challenged. I found the book somewhat irritating because it was hectoring and repetitious but one or two of the footnotes were interesting.
The paper Family Income Mobility– How Much Is There and Has It Changed? [a PDF] by Peter Gottschalk and Sheldon Danziger was particularly interesting as it provides empirical evidence for what is generally just “folk wisdom” (at least in left wing circles). It concludes that in the US:
“even though there is substantial income mobility, the extent of mobility has not increased over this period. As a result, the gaps between those at the top and those at the bottom have widened and remained at least as persistent as they were in the 1970s.”
Also (based on earlier research not available online)
“The fact that the US has a less-regulated, more decentralized labor market than the Nordic countries or Germany has not generated greater economic mobility here, either in earnings or family income. Likewise, the more extensive systems of social protection in the European countries have yielded lower poverty and lower family income inequality, but not at the cost of lower mobility.”
It seems from the data provided that 80% of people who were in the highest quintile of earnings in 1968-70 remained there in 1989-91 while of those who started in the lowest quintile, 31% remained there and 25.4% only rose to the next highest (the actual argument is a little more complex so if you want to really dig into the figures I recommend you look at the PDF).
I also ran across an international comparison of poverty and income inequality which included some interesting charts of how much inequality there was in a number of nations including several European countries, Canada and the US, in the 1980s and 1990s and how much difference taxes made to reducing inequality.
