The Rich--A Changing Group

Robert Frank writes:

Researchers and journalists (myself included) often refer to the rich as a
fixed group. There are the “the rich” who keep getting richer, with ever-rising
shares of the nation’s income and wealth. And then there are “the rest,” who
aren’t getting much of either.

At a time when the American Dream is supposedly dead for most Americans,
while Wall Streeters seen as permanently ensconced in government-backed
luxury, the chances of moving up or down would appear slim.

But the rich and poor may be far more fluid than the conventional
wisdom would have us believe. What is most surprising is the churn at the top of
the income ladder.

A Census Bureau study shows that from 2004 to 2007, about a
third of the households in the highest income quintile (the top 20%) moved down to another income group. In the same period, a third of those in the lowest income group moved to a higher group.

This isn’t to say Horatio Alger is the norm, and America ranks below
many other developed countries when it comes to intergenerational mobility, or
the chances of rising higher than your folks did. And wealth mobility, which
measures accumulated assets over a lifetime, is more persistent than income
mobility. The period of 2004 to 2007 also is selective, since the country was
prospering from the real-estate bubble...

“One of the most enduring economic myths in our society is that the
rich keep getting richer, while the poor keep getting poorer,” he writes. “It isn’t true.”

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