Wednesday, January 18, 2012

A short note on relative income mobility 

Megan McArdle makes what ought to be an obvious point about relative, as opposed to absolute, income inequality, of which the left has been making a big deal of late.

I've said before that I don't care about income inequality per se, and that focusing on it seems more like institutionalized envy than sound policy. I care about the absolute condition of the poor--do they have the basics of a decent life? And I care about whether income inequality itself produces some sort of structural advantage in the political system. (I'm skeptical). But I don't care whether Bill Gates lives in a giant robot house that cost eighteen-squintillion dollars. What I care about is whether some kid is growing up in a roach infested shack with no heat--something that has basically nothing to do with the size of Gates' fortune.

On the other hand, income mobility is a very important issue. Regardless of how far the top is from the bottom, children born in America should have an equal chance to move from the latter to the former. This is especially important given that so many of the highest-paid jobs are also the most pleasant.

Many people apparently agree with me: the issue of income mobility has become more prominent in policy debates over the last few years. And yet I submit that this agreement is entirely theoretical. How many of the people reading this blog would actually tolerate a one-in-five chance that their children would end up poor?

Because that's what income mobility actually means. It doesn't just mean giving a lift to the folks at the bottom--superior health care, better K-12 education. Everyone in the country cannot be above average. For the poor to have a better shot at ending up in the top quintiles, the folks in the top few quintiles have to run the risk of ending up in the lowest.

Precisely. But, as Megan points out at length (read it all), almost no American parents in the top half -- including those who consider themselves to the left -- are willing to countenance any government policy that raises the odds that their children will slip down a quintile or two. All of which explains why "class warfare" so rarely actually works in American politics.


By Anonymous Anonymous, at Thu Jan 19, 02:39:00 AM:

Every time I see Megan McArdle's name of think of this disastrous discussion:


It gets funny near the end.  

By Anonymous Anonymous, at Thu Jan 19, 11:56:00 AM:

Megans wrong on this. Liberal parents don't seem to mind affirmative action, which certainly does increase the odds of the (white or asian) offspring slipping down a quintile or two.  

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