Strange column in the Isthmus this week by conservative columnist Larry Kaufmann, who says people are wrong to think about inequality as a problem when the great purring engine of American productivity is lifting all boats. (Not a mixed metaphor — in the world of this column the engine is so awesomely strong that it actually lifts up millions of boats on some kind of mechanized platform.) Oh, and also, Occupy Madison is a bunch of smelly hippies who should shut up already. Kaufmann:
So is the American dream still alive? In terms of absolute mobility, the answer is yes. Between 1968 and 2006, 81% of children had a higher inflation-adjusted family income than their parents did…”
Now, let’s be fair — 81% is pretty good! And that figure doesn’t sound so implausible: after all, America is a richer country than it was in 1968, so why wouldn’t most individual Americans be richer?
Still, I wanted to check up. So I went to the source; Kaufmann ascribes it only to the Pew Economic Mobility Project, which publishes a lot of papers, but after a few misses I found the 81% figure in “Family Structure and the Economic Mobility of Children,” whose lead author is UW-Madison economist Thomas DeLiere.
And the 81% number is right there on page 11. But there’s a footnote, reminding us that these numbers are “adjusted for family size.” That is: for the purposes of this computation, a family with four children counts as lower-income than a family with two children and the same household income; the bigger family has to divvy up those dollars between more people. Without this adjustment, the proportion of children whose household income as adults exceeds the income of their childhood household drops to 66%.
That’s still a large majority! But there’s more — you’ve still got to ask why household incomes went up so much between 1968 and 2006. Another paper from the Economics Mobility Project reveals of a big chunk of the reason; the proportion of women in the workforce went from 40% to 60% over that period. Median individual income for men actually dropped over this period. (And no, the figures in DeLiere’s paper aren’t adjusted for this; I asked him.)
So yes: almost all present adults have more money than their parents did. And how did they accomplish this? By having one or two kids instead of three or four, and by sending both parents to work outside the home. Now it can’t be denied that a society in which most familes have two income-earning parents, and the business-hours care of young children is outsourced to daycare and preschool, is more productive from the economic point of view. And I, who grew up with a single sibling and two working parents and went to plenty of preschool, find it downright wholesome. But it is not the kind of development political conservatives typically celebrate.
Further reading: My guess is that Kaufmann learned about the EMP study from research manager Scott Winship’s article on the research in National Review, since he quotes Winship: “The finding of pervasive upward absolute mobility flies in the face of liberal accounts of a stagnant middle class.” Winship’s piece is longer, better written, and more careful than Kaufmann’s; he doesn’t dodge the fact that the flow of women into the workforce drives a great deal of household income growth, but he doesn’t place a lot of importance on this. Winship is a Ph.D. economist who does this stuff for a living, so his view must be given a lot of weight. But I can’t make out what the argument is from the single paragraph in NR. Is he saying that men’s earnings are decreasing because they’re voluntarily taking on fewer hours of work?
Winship also emphasizes the finding that children in Canada and Western Europe have an easier time moving out of poverty than Americans do. This part is absent from Kaufmann’s piece. Maybe he didn’t have the space. Maybe it’s because a comparison with higher-tax economies would make some trouble for his confident conclusion: “the punitive redistribution policies favored by Occupy Madison will divert capital away from productive initiatives that enhance growth and earnings opportunities for all, while doing nothing to build the stable families and “bottom-up” capabilities that are particularly important for helping the poorest Americans escape poverty.”
When the Isthmus is running a more doctrinaire GOP line on poverty than the National Review, the alternative press has arrived at a very strange place indeed.