>I'm arguing for the same thing you are. But income inequality isn't itself a problem if their is mobility between the income groups

I'm not sure how you can't be arguing the same thing I am. The income inequality is what creates the immobility. This is demonstrated by other developed countries where there is less income inequality and greater social mobility, as others have pointed out. Can you elaborate?

Are you sure the income inequality creates the immobility and isn't just linked to the immobility in other ways? The demonstration of other countries implies the latter, but even that is really hard to prove.

Yes, because history. There are no historical examples where wealth was held by the few and social mobility increased broadly. Only when resources are more evenly distributed among social classes has that ever happened.

>Yes, because history. There are no historical examples where wealth was held by the few and social mobility increased broadly

Uh... The industrial revolution.

You seem to be confusing wealth inequality with income inequality which might be muddying your arguments.

The graphed figure is not wealth, but income. The (great-)grandparent poster is suggesting that as long as people bounce between income levels, i.e., they have some higher paying years and some lower paying years, it has a smoothing effect on the net income inequality.

> There may be lack of mobility along with income inequality, but they article doesn't demonstrate it.

The article doesn't demonstrate it because that is not the goal of the article. But it is happening nonetheless:

https://phys.org/news/2017-04-upward-mobility-fallen-sharply...

US ranks very low on income mobility. Some people get bumped when they sell a business, but even selling a home will not put most people into the 420+K income range of the top 1% let alone the top 0.1% which at $1,600,000/year excludes even many lottery winners.

PS: Don't forget the median US home is only worth $188,900, which means 1/2 of them are worth less than that.

I disagree for two reasons.

1) What is mobility? The ability to move out of the lowest income group? How easily does that happen? If it's quick and easy, why doesn't everyone do it? And what about the reverse? How easy it for a person to move from a median income back into the lowest income. I think the idea of mobility is used as a reinforcement for the protestant work ethic / American dream sort of delusion that says "poor people can just work harder and save more and they won't be poor any more". But we have an enormous amount of evidence that points to that not being the case.

2) Also, you haven't provided an argument for why income inequality isn't a problem. If the lowest earners have extremely limited access to housing, healthcare or education, such as is the case in the U.S. I think that's a problem.

> How easy it for a person to move from a median income back into the lowest income.

Many people do when they retire. Or when they take time off between jobs (intentionally or not).

That's not what's happening though. First off, social mobility is declining, so let's get that out of the way:

http://www.businessinsider.com/social-mobility-is-on-the-dec...

Second, I think it's still a problem if the income of 90-98% of the country stagnates for decades, while the top earners get higher and higher income. Of course that affects inequality.

I'm also not sure it matters that much if the players at the top switch around if they have increasingly larger leverage on society.

For instance, we're seeing CEOs get rewarded larger and larger amounts of money every year, even if the companies lose money, like in this absurd case:

https://techcrunch.com/2018/02/22/snap-ceo-evan-spiegel-got-...

Where's that money coming from? The employees' potential salary increases? The retail investors' money? It seems to me that the rich keep siphoning off money from everyone else, and that's not sustainable.

They also get larger and larger amounts of money even when they get kicked out of the company for failing. This doesn't make sense to me at all. And I think the excuse that they need such amounts of money or otherwise they wouldn't take the job or something is utter BS. I'd more likely believe the board is giving them the money so the CEO doesn't sue the company, or better yet because the CEO was the one writing their checks before that, or something along those lines.

And this is just the corporate world. The US Congress seems to get crazier every year and listening more and more to corporations and their interests, and less and less to the people and solving real problems in the country (healthcare, infrastructure, etc).

It's like the whole American society is on the brink of collapse, and everyone just doesn't know it yet. Eventually, people will "suddenly" start to violently riot because of all this stuff added together, and it won't be pretty.

I think it's easy to explain why wages have stagnated. The time wages started to stagnate coincides with women's lib, immigration policy changes, and free trade changes. Women's lib dropped an extra 40% more people into the labor pool. Of course that's going to put downward pressure on wages. We changed our legal immigration policy to favor more poor people while simultaneously changing our illegal immigration enforcement policy to keep tons of illegal aliens in the country pushing wages down for the American poor. Trade policy has gutted a huge portion of the country in favor of the already wealthy elites on the coast.

The big economic question of the day should be asking how we've managed to keep wages at only the "stagnation" level rather than precipitously falling in the face of so much downward pressure.

Under that theory, by 1960s there shouldn't be almost any jobs left, since the population grew 25x since the foundation of the country.

You're arguing against a straw man. It's possible to support social and economic policies while recognizing that they have both positive and negative aspects to them.

What I'm saying is that having more workers is not by itself sufficient explanation. The US always had more workers YoY.

Do you believe that illegal immigrants have the same income distribution as the general population in the US?

No. Can you clarify the connection?

If you dump a bunch of people into the low end of income pool it's going to move the distribution curve.

And yet, despite massive immigration (from low income countries) for centuries, the US is one of the countries with highest salaries.

Sure, once the people here today have had a century of assimilation I suspect they will not impact the income distribution curve.

If you were happy with the income equality from a century ago, I'm willing to adopt the welfare and tax systems of that time so all the incentives are the same.

Your explanation presumes fixed demand.

No it doesn't. Here's at least three alternative presumptions:

1. Demand is not perfectly elastic

2. Demand is perfectly elastic, but supply was increased more on the lower end of the income range which reshapes the income distribution.

3. Trade policy reduced demand in the middle of the income range.

One thing I've never understood- in a fair society in which people are not artificially limited, wouldn't we expect social mobility to decrease over time as successive generations "sort" themselves into the spots allowed by their genetics?

Let's say we've got a feudal society with dumb nobility that rules over a smart peasantry by force. If that society becomes free, we'll expect smart peasants to move up and dumb noblemen to move down across the first few generations... but once they've moved, they've moved. Ergo, declining social mobility.

> "sort" themselves into the spots allowed by their genetics

There's an extreme amount of assumption baked into that.

1. Genetics is the only factor that determines merit for wealth?

2. Genetics merits extreme differences in income/wealth?

1. No of course not, but if it's a factor at all we'd expect to see the pattern I described.

2. We're talking about social mobility, not the level of inequality.

I tried multiple times to try to refute all of the assumptions made in this post, but I gave up.

1) One does not have to be intelligent to be wealthy.

2) Those born wealthy do not have to be intelligent to remain wealthy - they just need not be a consumeristic imbecile.

3) Genetics has such a small impact, if any, on social mobility - quite the opposite. If I am born a Kennedy I am more likely to never fall below my birthright social class because of my family lineage.

4) You contradict yourself. You say the nobility rules by force, then immediately follow that with "If that society becomes free" - how exactly would that society magically free?

1. Of course not, I referenced unintelligent wealthy people ("dumb nobility") in my post.

2. 70% of rich families lose their wealth by the second generation, 90% by the third. [A]

3. IQ is a greater predictor of income than parental SES. Someone in the 95th percentile for IQ has a higher EV for earnings than someone born into the 95th percentile for wealth.

4. A number of revolutions have happened. If you don't believe that modern France or Japan are freer than their feudal predecessors then I agree that we are probably not on the same page.

A. http://time.com/money/3925308/rich-families-lose-wealth/

I would not use the Time article as a reliable source, it cites the 70/90% figures a study by the "Williams Group wealth consultancy", which of course is trying to sell its services to wealthy clients.

I've seen the statistic quoted in so many places, yet have never found a link to the actually study. No info on sample size; we don't even have a definition of 'wealth' used in the study.

The sample size is 2000 families over 20 years. Better submarine piece here [1].

[1] https://www.wsj.com/articles/SB10001424127887324662404578334...

Other comments have brought additional evidence about declining wage mobility. I'll add that the article's stats about the impact of race demonstrate lack of mobility. Working while black seems to mean a 20% pay cut, regardless of education.

As an American, I've always based a lot of national pride on our history as a (relative, for some groups) meritocracy with a lot of mobility. It's really sad to see rapid erosion of this over the last 20y.

Most opportunities for mobility were linked to America being a nation of rapid growth, not because of the kindness of some national ethos. As our growth opportunities slow, you can be sure the haves will do everything in their power to prevent loss of ground to the have-nots.

Meritocracy in the U.S. is a myth in civilian life. The military almost approximates meritocracy but it is by design not egalitarian or democratic. Without extreme discipline, again found in militarism, meritocracy results in the formation of elites who define what the metrics are for merit, they quickly become corrupt with nepotism, lowering the ladder for family and friends to the exclusion of people with actual merit, and it becomes incompetent.

https://www.theatlantic.com/entertainment/archive/2017/06/th...