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Social Class Rotation


Daniel W.

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I was discussing with my friend about how the welfare system was messing up our country, and I mentioned that it used to be that the social classes would rotate roughly every three generations.  Someone else who was listening in angrily responded and said that what I had said was a complete lie.  He also wanted to know where I had heard that.

 

That being said, does anyone know where I can find the sources that Stefan used on this topic?

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I'm not exactly certain what you are talking about. Do you mean economic mobility?

 

The basic idea is that you don't want to measure the percentage of people who are in certain income brackets over time, but rather that you want to measure the change in income of individuals and families over time. The reason is because the percentages might give the illusion that the same people are stuck in that income bracket, while it is more likely the case that they have moved up and have been replaced.

 

For instance, people who make close to minimum wage tend to move up to the next income bracket within a couple of years. But if you look at the percentages, it would seem like there had been no improvement. Yet,what is really happening is that minimum wage workers who move up the ladder are replaced by new entry level workers.

 

There is also falling down the ladder, which happens a lot in the top 5%. Very few people at the top are able to hold onto their wealth. Of course, the impression we get is that the top 1-5% are the same people, yet it changes yearly.

 

I'm recalling most of this off the top of my head from a bunch of lectures I heard a while ago, but I think it may be what you are looking for.

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My great great great grandfather on my dad's side was the superintendent of the Black Diamond coal mines in Black Diamond, WA and one of the signers of the Washington State Constitution. He had a fortune that he left in a massive will to many people. None of it remains even to my grandfather's generation and my father, even when he was working hard and making a lot of money, would probably barely be considered middle class.

 

My great grandfather on my mom's side was the 1st cousin of Josef Tito Broz, the communist dictator of Yugoslavia. My grandfather moved with some of his family to the US when he was like 6 and Tito stayed behind, basically becoming the equivalent of Emperor in Yugoslavia. His grandchildren muse about now at Serbian nationalist gatherings without a whole lot of say.

 

Short of the implementation of a caste system, it's really hard to make any argument that income brackets don't change over generations.

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I think he means when Stefan talks about a wealthy family, then the kids don't ever have to work and lose the concept of personal finance and long term budgeting and lose the wealth inherited from the parents, until their children in turn are raised in poverty and work their way back up. Lather, rinse, repeat.

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I think I remember the Stef quote. It's "shirt tales to shirt tales in three generations.". My understanding of that quote is that a person works hard all his life, and makes a large amount of money, then the children spend, and then it falls onto the grandchildren to make their own way in the world. 

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Rags to riches a popular fiction meme in the late 19th and early 20th centuries. I'm looking at you Horatio Alger. 

 

https://en.wikipedia.org/wiki/Horatio_Alger_myth

 

Riches to rags was an inevitable followup from the progressivist backlash to undermine capitalism. However, the massive growth of the middle class during the industrial revolution is undeniable, and that is Horatio Alger's milieu.

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