Thursday, May 10, 2012

Over A Decade, A Third Of Americans In Bottom Half Income Percentile Are Upwardly Mobile

From The New York Times (via Yahoo Finance), "Memo to Would-Be Members of the 1%: Move to the Northeast or Mid-Atlantic" by By Catherine Rampell:
Reaching for the American dream? Your best chances are probably in New York, New Jersey or Maryland.

Those states are best at helping Americans move up the income ladder, both in absolute terms and relative to their peers, according to a groundbreaking new study from the Economic Mobility Project at the Pew Center on the States.
[Researchers] examined how each individual’s earnings had changed exactly one decade after the initial income number was collected.

Across the country, the income of the typical American rose by about 17 percent in inflation-adjusted terms during that time. There was great variation among the states, though.

In a handful of states, including New York, Utah and Massachusetts, residents’ incomes rose at least 20 percent over the course of a decade. On the other hand, in Alabama and South Carolina, average incomes rose only 12 percent after adjusting for inflation.
For example, a person who started out in the 20th percentile would have to climb to at least the 30th percentile after a decade in order to be considered “upwardly mobile” in this study.

Across the country, about a third of Americans who started in the bottom half in income were able to move up that much.

At the more upwardly mobile end, in Connecticut, 40 percent of the state’s residents who started in the bottom half moved up at least 10 percentiles over the course of a decade.

At the other extreme, in North and South Carolina only about a quarter — 26 percent — of people who started at the bottom were able to lift themselves up that much.
The Executive Summary of the Pew State Mobility Report is available.

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