Research by a team from Harvard and Berkeley has just been released that finds US income mobility has remained 'constant' over the past 50 years, albeit at a lower level of mobility than that of others such as the Nordic or Germanic nations. And it's a good piece of research as far as it goes but you can be easily misled by the type of league tables that this data encourages. Because as Ron Bailey of Reason points out: mobility is like climbing a five rung ladder. It makes a huge difference how far the ladder rungs are apart - if for example, the five quintiles are separated by $1,000 each as in $20, 21, 22, 23, 24K then income mobility is high because it's trivial. Simply putting in some OT will vault you from the bottom to the top. But if it's $20,000 between as in $20, 40, 60, 80, 100k then moving from bottom to top will be harder but it will also be meaningful - your life will differ in ways that moving from the bottom to the top or back again won't be in the 1K world.
And lo and behold if that isn't what is happening in the US versus the European income mobility 'good boys'. Unfortunately we don't have perfectly comparable data, but I think Bailey's approximations and conclusions hold up very well. From Bailey's
piece:
Below is a table using 2011 Eurostat post-tax income data converted from current Euros to current dollars. I could find no U.S. income data that provided post-tax quintile thresholds so I have included 2011 pre-tax quintile thresholds on the top row and 2010 average post-tax income data in the second row. The starred figures are average post-tax U.S. incomes for households between the 96th and 99th percentiles and the top one percent respectively. Comparing these data give a rough idea of how U.S. income quintiles compare with those of other wealthy countries.
| Quintiles | 1st | 2nd | 3rd | 4th | 95% | 99% |
| U.S. cutoffs before tax | $20,000 | $38,000 | $62,000 | $102,000 | $186,000 | $368,000 |
| U.S. average after tax 2010 | $24,000 | $41,000 | $58,000 | $81,000 | $215,000* | $1,013,000* |
| Denmark | $25,000 | $32,000 | $40,000 | $50,000 | $72,000 | $115,000 |
| Germany | $17,000 | $23,000 | $29,000 | $50,000 | $57,000 | $86,000 |
| France | $19,000 | $24,000 | $31,000 | $41,000 | $68,000 | $123,000 |
| Sweden | $21,000 | $28,000 | $34,000 | $42,000 | $58,000 | $82,000 |
|
One way to think of the comparison between the U.S. and Denmark is that, in absolute terms, it takes only an increase in income of $47,000 for a Danish household to rise from the bottom quintile to that country’s top five percent. A comparable rise in the United States would mean that a household’s income has increased by $166,000 to cross the pre-tax threshold or $190,000 to achieve the average post-tax income of Americans who are between the 96th and 99th percentile of incomes. In some sense, it’s easier to appear “mobile” when you have a lot less distance to travel.
Another way to think about comparing the U.S. and Denmark is that with an increase of $47,000 an American household would rise from the bottom quintile to the middle quintile of the U.S. income distribution. In other words, a solidly middle class American income is comparable to an income that would put a Danish household in its country’s top five percent of households.
The Harvard and Berkeley researchers observed, “Scandinavian economies have much greater relative intergenerational mobility than the United States.” But they added that that “does not necessarily mean that children from low-income families in Denmark do better than those in the U.S. in absolute terms.”
That is true. One oft-cited statistic is that 16 percent of Danes born into households in the bottom quintile rise to the top quintile in their country—an income journey of $25,000 dollars. Whereas only eight percent of similarly poor Americans make to the top quintile in the U.S., an income journey of $82,000.
However, a study by economists at the U.S. Treasury Department published in the May, 2013 American Economic Review reported that 27 percent of American teenagers who were living in households with incomes in the bottom quintile in 1987 were now in households with incomes above $62,000 (fourth and fifth quintiles) by 2007. In other words, in terms of absolute income gains, poor Americans were almost twice as likely as poor Danes to make incomes found in the top Danish income quintile. The rungs of the income ladder are further apart in the U.S., but successfully climbing each one takes an American a lot farther than a Dane or a German ascending his country’s income rungs.
Inequality is often measured by the Gini coefficient in which a score of 0 indicates perfect income equality and a score of 1 means that one household gets all the income. In December, the Pew Research Center published data showing how the pre-and-post redistribution Gini coefficients of various rich countries stacked up. Below is a table with selected values.
| Gini Coefficient | Pre-redistribution | Post-redistribution |
| U.S. | 0.499 | 0.380 |
| Denmark | 0.429 | 0.252 |
| Germany | 0.492 | 0.286 |
| France | 0.505 | 0.303 |
| Sweden | 0.441 | 0.269 |
| |
Taking from the rich to give to the poor clearly shrinks the distance between income rungs. In his State of the Union address, President Obama declared, “Opportunity is who we are.” Yes, but it’s hard to see how shortening the income ladder provides more opportunity for income mobility. It just makes everyone equally less well off.
And all of this is concluded before taking into account that the US is a continental scale empire whose wide variation in regional cost of living makes the national PPP statistics ridiculously inaccurate for this type of analysis because high and low incomes are not evenly distributed across the nation. Typically 'high' incomes are presented as too high because they face far greater than typical cost of living and 'very low' incomes are in places that have very low costs and are therefore underestimated on a national basis. This is much more prevalent in a large, diverse, continental scale nation like the US than in Denmark which is about the physical and population scale of Metro Houston and where the top 20 surnames constitute 37% of the population while in the US they constitute less than 7.5%.
Inequality is simply a measure of diversity. Period. Want less inequality, get less diverse. Or if you're a lefty, scream for more diversity, more immigration and so on and then scream about the inevitable consequences of more diversity, more immigration and so on. It's a sweet gig so long as you have the press passed out drunk in your pocket. Which admittedly isn't hard to do because the average 'serious' 'mainstream' 'hard hitting' 'journalist' appears to be a sweet young ingenue from Vassar or Wellesley. I mean Ben Rhodes told us all about it when he ran the Iran scam.
As a reference, here is the 'league' table for mean disposable household income overall:
National accounts adjusted mean equivalized disposable household income (PPP) $
|
| 1 |  United States | 42,479 | 17.8% | 50,041 |
| 2 |  Switzerland | 33,730 | 31% | 44,186 |
| 3 |  Norway | 27,963 | 32% | 36,911 |
| 4 |  Australia | 24,216 | 49% | 36,081 |
| 5 |  Austria | 29,113 | 22% | 35,517 |
| 6 |  Canada | 28,120 | 23% | 34,587 |
| 7 |  Germany | 27,312 | 16% | 31,681 |
| 8 |  Denmark | 25,028 | 24% | 31,285 |
| 9 |  United Kingdom | 28,720 | 7% | 30,730 |
| 10 |  France | 25,738 | 19% | 30,628 |
| 11 |  Netherlands | 25,030 | 17% | 29,285 |
| 12 |  Belgium | 24,563 | 19% | 29,229 |
| 13 |  Spain | 25,101 | 14% | 28,615 |
| 14 |  Italy | 26,138 | 10% | 28,751 |
| 15 |  Japan | 24,393 | 15% | 28,051 |
| 16 |  Sweden | 21,866 | 27% | 27,769 |
United States
United Kingdom
Hong Kong
Canada
France
Australia
Russia
United Arab Emirates
Saudi Arabia
