American income generational growth has fallen precipitously / by kevin murray

A working paper as issued by the National Bureau of Economic Research, performed a detail study on "absolute income mobility", that is, "the fraction of children who earn more than their parents", of which the study combined historical data from the census with de-identified tax records, showing that as reported by the, that children making more money than their parents of those born in 1940 was 92%, of those born in 1950 it dropped to 79%, for those born in 1960 it further dropped to 62%, for those born in 1970 it slightly dropped to 61%, and for those born in 1980 it further dropped to just 50%.   This indicates that in the last two generations, somehow, in this, the richest nation in the world, that the children of previous generations which had been increasing their income at an exceedingly high rate vis-a-vis their parents, have seen that for those born in 1980, that this has now become essentially a coin flip.


Though the United States in the ensuing years, has continued to grow its GDP, that rate of annual GDP growth, has gotten slower, which means that though the pie has gotten bigger in aggregate, the rate being slower, correlates also to an overall slower income growth rate.  Additionally, as reflected by the massive drop in percentage of those of the present generation earning more than their parents, is the fact, that today's income distribution is far different than it was in earlier generations, so that the rich are far richer than they were in previous years, meaning that much of the wealth of America has become more concentrated into fewer and fewer hands, which is why succeeding generations from more equitable times are not able to so readily out earn their parents as was previously the case.   


This indicates, that the American income generational growth, in a nation that still grows its GDP, albeit at slower rates than previous generations, has over the ensuing decades, created an America that has never had so few that have so much, while keeping the poor in their place, and eviscerating the great middle class of America, so that, the American dream of each succeeding generation of Americans, having the opportunity to stand on the shoulders of their parent's generation and to therefore, out earn those that birthed them, has been devastated.


Further, to the point, the recent precipitous drop in those making more money than their parents, is so steep, that should GDP growth slow even further, and if taxation of the rich, along with their gross overcompensation is not appropriately rectified, than we can count on future generations routinely earning less than their forefathers.  So that, this country will devolve into having basically a nobility of the rich and privileged, with a continued massive underclass, serviced by that government, of which that government, itself, because it cannot get its own house in order, routinely runs massive deficits, and taxes not the rich appropriately in order to pay for services so needed, but instead through regressive taxes of all sorts, essentially taxes the middle class and the upper middle class to pay for it, with the end result, that the children of these newest generations are not only stuck with massive unpaid national deficits, but are often not going to progress any further than their parents before them, in fact, they will fall behind.