The U.S. Election brought the issue of income inequality into the fore, as president-elect Donald Trump built his campaign on promises to struggling, blue-collar workers. But his proposed tax cuts (which would apply to nearly all taxpayers, and are likely to benefit the rich) would not lessen the overall pay gap.
That's according to a new report, called "Equality of Opportunity Project," which suggests that the odds of children out-earning their parents have plunged by more than 40 percent. That's due in large part to the concentration of wealth among the rich, and much less to the slowdown of economic growth that Trump's proposals seek to address.
The study, led by researchers from Stanford, Harvard, and U.C. Berkeley, is based on data from anonymous tax records, and U.S. Census Bureau numbers on the distribution of income. "If you don't have that kind of widespread economic growth across the income distribution, it's tough to grow up and earn more than your parents," explained Nathaniel Hendren, a Harvard economist and co-author of the study, in an interview with the Washington Post. "This is a distinct reason to focus on inequality."
Only half of those born in the 1980s have grown to earn more than their parents did, down from the 92 percent of children born in the 1940 who did. The odds are especially slim for those born into the middle class in the Rust Belt, particularly in Michigan and Indiana.
So is the American Dream fading? Scott Winship, a visiting fellow who studies mobility at the Foundation for Research on Economic Opportunity, argues that this interpretation is too "pessimistic." Still, he told the The Post, this research "provides really strong evidence that absolute mobility has fallen over time."