kenberg, on 2018-August-06, 12:07, said:
Yes. But there is intentionally rigged and rigged where it's just that nobody looks very closely/ In the specific case where only 1% of those born into the 1% grow into the 1%, I expect that it's a matter of when. Possibly only 1% of the babies of 1 %ers become 1 %ers when they are 30, but ive them a chance. As mentioned I was off to do some stuff and so I did not read it all in detail. It seems almost certain that a study that shows that only 1% of the children of 1%ers become 1%ers is not looking at the right comparisons. We all know of examples of people who have come a long way from not much, and we know of some going in the other direction as well. It happens both ways, fairly often. But the kids of Jeff Bezos are more likely to become mega-rich than my grandkids are (too late for my kids) and certainly more likely than kids growing up in public housing.
Becoming a 1%er is hard, even if you're born into a 1% family. It requires incredible good luck and hard work. What can Jeff Bezos do to ensure that his kids become as uber-successful as he has been? He can give them some shares of Amazon.com, but the rest is mostly on their own. Yes, they have a leg up on the competition -- he can send them to the best schools, and help them get good jobs when they graduate. I'll bet most of the children of 1%ers are in the top 10-20%, but they're not all in the top 1%.
The article is mostly talking about the middle class -- the paragraph about the 1% was just an extreme example of the more general phenomenon it's discussing. What the article says is that upward mobility opportunities today are not the same as they were in previous generations. It used to be normal for children to do better than their parents. The economy was improving, and a rising tide lifts all boats. Many people born in the first half of the 20th century didn't go to college, and it was quite common to hear their children say that they're the first ones in their families to get a higher education, which allowed them to get better jobs and make more money than their parents.
But since then, things have slowed down. If you're in the
second generation to go to college, it's not as easy to do better than your parents -- they already made the quantum leap from lower class to middle class. Most of the 1% are pretty old, like Warren Buffett -- there are only a handful of Mark Zuckerbergs, making huge bucks from new technologies.
My paternal grandfather (a first-generation American) started a successful business, all his sons all eventually became executives at the business (and my mother's brother was his IT manager, and later became a salesman), and my father took over the helm when my grandfather retired. Grandpa did reasonably well, but my father and uncles were much better off -- they all moved out to very nice homes in the suburbs. When I was a teenager we moved to an even nicer town, where we bought a house with a pool and tennis court; my high school was one of the few around in the 1970's that had their own computer and taught programming (most other schools on Long Island had cooperative arrangements with a vocational school).
I got to go to the most prestigious engineering college, and my father was able to pay for it without me having to get any financial aid (I got a federal student loan because it was cheap -- I think I paid it off in less than 10 years). I live a comfortable life, but I'm pretty sure I don't make nearly as much as my father did. But I haven't really tried -- I've been happy being an individual contributor in all my jobs, I haven't tried to get into management or start my own business. I don't have a family to support, I have a very modest lifestyle, so I don't
need much money (I actually took a small pay cut, including losing company-provided medical insurance, to come work for BBO). I think I was a little spoiled, and I've always been lazy -- it would take lots more effort than I'm willing to exert to do as well as my father did, despite the opportunities that are potentially available to me.
Wow, I finally got to use anecdotes from my own life to illustrate a point, like Ken usually does!