Class war rhetoric is in the air again. Yes, the top 20 percent today earns more than the top 20 percent earned in 1970, while the share received by the other quintiles has fallen. There’s just one problem, however: Comparing quintiles across time doesn’t tell us what happens to actual people. To check in with reality take a look at this chart from the Pew Economic Mobility Project:
This chart shows what happens when you compare the incomes of parents (1967-71) with those of their children (1995-2002): The children of all earners except those in the top 20 percent saw their incomes improve over those of their parents. The children of earners starting in the bottom 20 percent saw the biggest increase over their parents incomes.
At Cafe Hayek, Russ Roberts has much more on income mobility in his post “There’s No Their There,” April 13, 2011.