AGENDA 21 RADIO

BY CHRISS STREET

The U.S. National Bureau of Economic Research found that California upward mobility has plunged to the point that over half of Millennial children will spend their lives poorer than their Baby-Boomer parents.

The National Bureau of Economic Research (NBER) funded an intergenerational income study led by Stanford University’s Ray Chetty and published in December 2016 titled: “The Fading American Dream: Trends In Absolute Income Mobility Since 1940.

Famously defined by James Truslow Adams in his 1931 book ‘The Epic of America’, “The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.”

Several prior studies had revealed that generations of Americans had much higher rates of income mobility than Europeans for the two centuries from the 1750s to the 1950s.

But Chetty found that the intergenerational odds of a 30-year old achieving the American Dream had fallen from 92 percent if born in the 1940s; to 79 percent for the 1950s; to 62 percent for the 1960s; and 61 percent for the 1970s. For Milennials born in the 1980s to Baby-Boomer parents, the odds of achieving the American Dream are just 50-50.

Chetty blamed the nation’s falling income mobility to the nation’s gross domestic product (GDP) growth falling relentlessly from a 2.5 percent growth rate per working-age family during from the 1940s to the 1970s; to a 1.5 percent growth rate per working-age family from the 1980s to the 2010s.

Chetty as a Professor of Economics living in Silicon Valley must have assumed that when he analyzed the data on a state by state basis, it would have been much easier for a Californian to achieve the American Dream.

But in an article titled ‘The Withering California Dream, by the Numbers,’ Chetty found that 30-year old Californians were less likely in every decade to achieve the American Dream including 89 percent if born in the 1940s; to 71 percent for the 1950s; to 58 percent for the 1960s; and to 57 percent for the 1970s. California Millennials born in the 1980s to Baby-Boomer parents, 51.2 percent are expected to fail in achieving the America Dream.

Chetty commented that the probability of a 30-year old Californian failing to achieve the American Dream is understated, because he omitted the children of immigrants, due to an inability to document immigrant parents’ income. The U.S. Bureau of Labor Statistics reported that many U.S. jobs held by immigrants, especially those taken by illegal aliens, pay substantially lower wages than the wages paid to natural born citizens.

The ‘Public Policy Institute of California’ estimates: “California is home to more than 10 million immigrants—about one in four of the foreign-born population nationwide. In 2015, the most current year of data, 27% of California’s population was foreign born, about twice the US percentage.”