Only 4% of Americans make it from the bottom to the top in income

A recent report from Pew suggests the rags-to-riches story is uncommon in American life:

While the U.S. is known as the land of opportunity — where everyone has an equal chance to succeed — one’s family’s socioeconomic status can impede success. A report from Pew’s Economic Mobility Project, a study assessing the health and status of the American dream, found that people raised in low-­income families often stay in the same economic bracket as their parents. Those raised in higher-income families stay up.

While 84 percent of Americans have higher family incomes than their parents, only 4 percent of those in lower-income families leaped to the top. The rags-to-riches story, the report said, happens in movies, but rarely in reality.

This isn’t the first source to argue this.

However, I wonder if this 4% really differs from what is displayed in American culture. How many books, movies, magazines, songs, and more suggest a rags-to-riches story? Many people have heard the name of Horatio Alger and his writings but how many American stories really follow this theme? How much does it differ from other cultures? If 84% of Americans do indeed have higher incomes than their parents, couldn’t there be some truth in cultural stories that depict “moving up” but not becoming fabulously wealthy? There would be ways to do a comprehensive study of American stories and media output to see how prevalent the “rags to riches” story really is but it would take a lot of work and simply counting numbers doesn’t easily translate into the impact a small amount of stories could have.

US exurban population grew 60% between 2000 and 2010

The fastest growing area in the United States between 2000 and 2010 were exurbs:

Between 2000 and 2010, the total U.S. population grew about 10 percent, from 281 million to 309 million. Over that same time, the exurban population grew by more than 60 percent, from about 16 million to almost 26 million people, according to the analysis. As this chart shows, rates of growth are significantly higher in exurban areas than in more urban or densely populated areas.

A new interactive map from the Urban Institute shows how the growth rates in exurban areas have been higher – and in some cases much higher – than the growth rates in their corresponding metropolitan areas. The map is based on an analysis by U.S. Census Bureau researchers Todd Gardner and Matthew Marlay, who looked at census data from 2000 and 2010, and American Community Survey data from 2005 through 2009. Their data is also available in a sortable table.

The exurbs of Las Vegas, for example, saw an average annual growth rate of 17.2 percent between 2000 and 2010, while the metropolitan area as a whole had an average growth rate of just 3.6 percent. Phoenix’s exurban growth rate was 14.7 percent during that time, compared to its metro-wide rate of 2.6 percent. Omaha’s exurban rate of 11.9 percent also outpaced its metro-wide rate of 1.2 percent. Ninety-six of the 98 most populous metropolitan areas saw higher growth rates in the exurbs than in the metro areas as a whole between 2000 and 2010…

But it wasn’t all just pre-crash exurban booming. Some metro areas continued to see their exurban populations grow between 2007 and 2010, after the crash and through the recession. From 2007 to 2010, metropolitan areas grew about 2.4 percent, while exurban areas grew by 13 percent. Some exurbs even out-performed their pre-recession selves. “In 22 of the largest 100 metros, the average annual growth rate in the exurbs from 2007 to 2010 was higher than that of the previous seven years,” the researchers write.

As you might expect, the majority of the fastest growing exurban areas were in the South and West.

By definition, the exurbs are on the metropolitan fringe. However, once they reach a certain population or development moves past them, they are no longer really the exurbs as further out communities then take up the label. How long does the “average” exurb last before it simply becomes a suburb? I suspect this might differ city by city as they expand at different rates. For example, the cities of the Northeast and Midwest have a longer history and much of their explosive growth has already concluded.

The world of McDonalds, McQuarks, and McMansions

Wired has a few recent pieces that are related to McMansions. First, an “Alt Text” piece parodies other “theoretical particles” that might follow the recent Higgs-Boson news:

McQuark

This subatomic particle is found in all McDonald’s food, and is the reason that all the menu offerings — including the burgers, shakes and dipping sauces — taste “McDonaldy,” as if they were all just carved out of a big lump of McSubstance. Currently, the McQuark is the universe’s only trademarked subatomic particle, although Motorola, maker of the Photon smartphone, is attempting to gain traction against Apple’s battery of lawsuits by patenting actual photons.

Wired‘s Matt Simon follows up and defines McMansions:

The most widely used of these pejoratives is McMansions. These are the quickly produced cookie-cutter homes that some say lack taste.

It would be interesting to hear more from McDonald’s about how they feel about the expanding usage of such terms, particularly McMansion. According to Wikipedia, McDonalds was not too happy about the term “McJobs”:

The term “McJob” was added to Merriam-Webster’s Collegiate Dictionary in 2003, over the objections of McDonald’s. In an open letter to Merriam-Webster, Cantalupo denounced the definition as a “slap in the face” to all restaurant employees, and stated that “a more appropriate definition of a ‘McJob’ might be ‘teaches responsibility.'” Merriam-Webster responded that “[they stood] by the accuracy and appropriateness of [their] definition.”

On 20 March 2007, the BBC reported that the UK arm of McDonald’s planned a public petition to have the OED’s definition of “McJob” changed. Lorraine Homer from McDonald’s stated that the company feels the definition is “out of date and inaccurate”. McDonald’s UK CEO, Peter Beresford, described the term as “demeaning to the hard work and dedication displayed by the 67,000 McDonald’s employees throughout the UK”. The company would prefer the definition to be rewritten to “reflect a job that is stimulating, rewarding … and offers skills that last a lifetime.”…

According to Jim Cantalupo, former CEO of McDonald’s, the perception of fast-food work being boring and mindless is inaccurate, and over 1,000 of the men and women who now own McDonald’s franchises began behind the counter.Because McDonald’s has over 400,000 employees and high turnover, Cantalupo’s contention has been criticized as being invalid, working to highlight the exception rather than the rule.

In 2006, McDonald’s undertook an advertising campaign in the United Kingdom to challenge the perceptions of the McJob. The campaign, developed by Barkers Advertising and supported by research conducted by Adrian Furnham, professor of psychology at University College London, highlighted the benefits of working for the organization, stating that they were “Not bad for a McJob”. So confident were McDonald’s of their claims that they ran the campaign on the giant screens of London’s Piccadilly Circus.

Instead of trying to change or block the definition, why doesn’t McDonald’s try to introduce its version of a “Mc-” term that it can then work to define? Of course, such things can be quickly turned around on the Internet but McDonald’s has plenty of resources and reach. I’m sure they could develop a positive version and there are still plenty of people going to their restaurants…

Signs of the “demographic train wreck” in retirement colonies in Florida

One commentator suggests the expansion of retirement in Florida hints at larger demographic changes in the United States:

“There is a demographic train wreck coming that we are not really addressing nationally or in Florida,” says Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness.Over the next 20 years, the number of adults over 62 in the U.S. will double to 80 million, as the largest generation in American history retires. A demographic model that once looked like a pyramid, with a relatively small number of seniors with lots of younger people to support them, now more closely resembles a bobble-head doll. Right now in the U.S., four working age adults support each retiree. In 20 years, that ratio will slip to three to one nationally — and two to one in Florida…

Yet after years of stagnant population growth, Florida is adding new residents again, especially in those areas where it is growing gray. According to projections from Florida’s Office of Economic and Demographic Research, more than half of the five million migrants expected to flow into the state over the next 18 years will be 60 or older. This elderly population boom, fueled by the retirement of the Baby Boomers, the biggest generation in U.S. history, will profoundly change the face of Florida from a state that is simply very old, to a state with one of the oldest populations on the planet.

If it seems like there are a lot of wrinkled faces crowding the aisles at the Publix grocery store in Boca Raton now, just wait. By 2030, one in four Floridians will be older than 65, up from one in six today, with the 85-plus set the fastest-growing group, according to projections…

“Basically you are asking a bunch of old retired rich white people to vote for school bonds that benefit immigrant Latino kids,” says Jennifer Hochschild, a Harvard University professor who studies the intersection of politics, immigration and education. “This is a potential political disaster.”

It will be fascinating to see how this plays out. Currently, it sounds like developers have figured out there is quite a market for such retirement communities. I have wondered why these haven’t seem to have caught on in the same scalein more northern, even considering the weather.

Should retirees have the right or make the possibly wrong choice for the larger society by moving into more isolated communities of people their own age? I’m sure there are class and race differences present here as well – not everyone has the resources to move to Florida in their golden years. What happens when all of these older residents can no longer live in these communities and require more care?

Summer break widens achievement gap

Summer break may be welcomed by children but research shows that it contributes greatly to the achievement gap between students of different backgrounds:

Consider, first, the evidence for the summer fade effect. Taken together, a variety of studies indicate that students’ academic skills atrophy during the summer months by an amount equivalent to what they learn in a third of a school year, according to a review by Harris Cooper, a professor of education at Duke University, and several co-authors.

This deterioration, furthermore, varies substantially by income and race, and its impact persists even past childhood. Barbara Heyns, a sociologist at New York University who studied Atlanta schoolchildren in the late 1970s, found that although academic gains during the school year were not substantially correlated with income, summer decline was.

Subsequent studies have replicated the finding. Karl Alexander, Doris Entwisle and Linda Olson of Johns Hopkins University, for example, found that the summer fade can largely explain why the gap in skills between children on either side of the socioeconomic divide widens as students progress through elementary school. Children from all backgrounds learn at similar rates during the school year, but each summer students of high socioeconomic status continue to learn while those of low socioeconomic status fall behind.

The impact is felt even years later. The learning differences that begin in grade school “substantially account” for differences by socioeconomic status in high-school graduation rates and in four-year college attendance, Alexander and his co-authors report.

This article adds some more information:

Many low-income kids actually make great progress in school from August to June, only to see much of it wiped away by an idle summer, he says. “We need to get over ourselves a little bit over our idyllic view of what summer is and what it’s supposed to be,” he adds.

A 2007 study by Johns Hopkins University researchers found that by the time students enter high school, “summer learning loss” accounts for roughly two-thirds of the nation’s achievement gap in reading between poor and middle-class students.

If the evidence is clear, how long until more districts go to reduced summer breaks or year-round school? Overcoming the culture of summer break could be difficult to do. Also, might we have a situation where wealthier districts continue summer break while less well-off districts try to combat this summer achievement decline?

Robert Shiller suggests economists should be more connected to sociology, other disciplines

Economist Robert Shiller suggests the field of economics should be more connected to other social sciences like sociology:

Unlike many economists who seem unaware that their discipline has lost much of its credibility in recent years, Shiller is appropriately distraught at the seeming disconnect between economics and real-world social concerns.

“My own university, Yale, used to have a department of sociology, economics, and Government,” Shiller told me. “And in 1927 they split them into three departments. I think that was a momentous institutional change — it allowed economics to be cut off from other disciplines. Now they’re in separate buildings. You have to walk some distance. It’s utterly amazing to me how rarely economists quote the greats in psychology or sociology. Maybe they’re read them, but they’re not in their active mind.”

Shiller makes a powerful case that, while recent scandals make it easy to forget, financial innovation has done a lot of social good. As as an example he cites the creation of insurance. Because of it, almost everyone — not just the rich — can bounce back after an accident, fire, theft, or other calamity. In the past, such hardships could financially ruin a family forever.

Some interesting history here. Compared to the natural sciences, the social sciences have a relatively short history. It was only in the early 1900s that disciplines like sociology began to emerge in their own right.

From a sociologist’s point of view, it seems incomplete to only examine financial principles and transactions without the broader understanding of social motivations, interactions, and life. I wonder if sociologists wouldn’t argue that sociology encompasses more of the other social sciences than economics or psychology do, harkening back to Comte’s idea of sociology as the “queen of the sciences.”

Size of new Canadian homes has dropped 400 square feet since peak

While American new home size picked up in 2011, new homes in Canada have dropped in size over recent years:

Gone are the days of the McMansion, with the homeowner’s dream of a plus-sized home replaced by pint-sized living.

According to the Canadian Home Building Association, the average house size has dropped in the past decade from a mid 2000 peak of 2,300 square feet, down to 1,900 square feet, a decrease that is expected to continue.

Catalysts for the change in residential housing are varied – a choice of location over space or a move away from home-oriented leisure activities serving as but two examples – but for the most part, it comes down to the simple factor of the economics of sustainable living…

McMansions simply aren’t environmentally or monetarily sustainable.

It would be interesting to look more into why Canadian home sizes have dropped so much while American home sizes dropped a little but then picked up again. Is there a stronger cultural stigma attached to larger homes? Is there simply not enough demand in the market for the larger homes or are builders leading the way here?

I would also note that 1,900 square feet is still a decent sized home.

 

“The Queen of Versailles” is not about a McMansion

More reviews are coming out of the new documentary The Queen of Versailles (and critics are liking it according to RottenTomatoes.com) but I would still argue with some of the depictions of the 90,000 square foot house at the center of the film. Here is an example: the Jewish Daily Forward has a headline titled “The Biggest McMansion of Them All.” I’ve argued this before: a 90,000 square foot home is far, far beyond McMansion territory. This is the land of the ultra-rich. Take this information from the same Jewish Daily Forward story:

David Siegel, 76, is the billionaire founder of Westgate Resorts, which he claims is “the largest privately owned time-share company in the world.” Jackie, 31 years his junior, is David’s surgically enhanced wife, and mother to seven of his 13 children. They live in a 26,000-square-foot home in Orlando, Fla., with a household staff of 19. They believe the house is too small…

All went well until the credit crunch of 2008. The Siegels’ problems weren’t caused by the house — though it did become a burden. Rather, David’s company ran into trouble as lending dried up. Typically, Westgate customers borrowed money from the company to pay for their vacation time-shares. The company, in turn, borrowed from the banks at lower interest rates. When the banks stopped lending, the bottom fell out.

Added to that difficulty was the burden of the PH Towers Westgate, a new 52-story high-rise luxury resort in Las Vegas, which drained Siegel’s corporate resources as well as $400 million of his own money. Finally, in November of 2011, Siegel was forced to sell…

Originally, the project was going to be a look at how the wealthy live and, of course, at the Siegel’s house-in-progress. It was very much in line with Greenfield’s previous work as a documentarian and photographer.

I’m looking forward to seeing this film at some point but it is difficult to draw conclusions about McMansions and American excess from one ultra-wealthy couple. Thus far, it sounds like reviewers and others see this film as a metaphor for the American economic crisis of the last five years or so and I’m not sure you can stretch it that far. As a view into the life of the elite, it may be fascinating but it would be difficult to describe this as a “typical” experience that explains the logic behind all McMansions and excessive consumption.

New movie to feature “nonviolent conflict resolution specialist teaching sociology”

It is relatively rare to find television shows or movies that feature sociologists. Here is a new one: the upcoming movie Hit & Run features one of the lead characters as a sociology instructor.

Charlie Bronson (Dax Shepard) is trying to live a quiet, respectable life in a small California town in Hit & Run. He’s doing right by his girlfriend (Kristen Bell), a nonviolent conflict resolution specialist teaching sociology at a local college, sharing a tender moment in bed as the film opens. But, things go south really quickly.

You see, Charlie’s actually in the witness protection program for testifying about a botched robbery turned homicide he witnessed in Los Angeles. Now his girlfriend’s been offered the opportunity of a lifetime in LA and, rather than lose her, Charlie decides to risk everything to get her there. The couple quickly picks up a few tails in pursuit, including Charlie’s assigned marshal (Tom Arnold), Bell’s jealous ex (Michael Rosenbaum), the cons Charlie ratted out (Bradley Cooper, Ryan Hansen and Joy Bryant), and a pair of local law enforcement caught up in the swing of it.

I wonder how much the film plays up the irony of a “nonviolent conflict resolution specialist” teaching sociology getting involved in exciting car chases…

“It is the privileged Americans who are marrying, and marrying helps them stay privileged”

A New York Times article looks at how marriage affects inequality. Here are some of the interesting tidbits:

Estimates vary widely, but scholars have said that changes in marriage patterns — as opposed to changes in individual earnings — may account for as much as 40 percent of the growth in certain measures of inequality. Long a nation of economic extremes, the United States is also becoming a society of family haves and family have-nots, with marriage and its rewards evermore confined to the fortunate classes.

“It is the privileged Americans who are marrying, and marrying helps them stay privileged,” said Andrew Cherlin, a sociologist at Johns Hopkins University.

About 41 percent of births in the United States occur outside marriage, up sharply from 17 percent three decades ago. But equally sharp are the educational divides, according to an analysis by Child Trends, a Washington research group. Less than 10 percent of the births to college-educated women occur outside marriage, while for women with high school degrees or less the figure is nearly 60 percent…

Sara McLanahan, a Princeton sociologist, warns that family structure increasingly consigns children to “diverging destinies.”

I’ve tackled this before (see here) but this is still interesting: marriage can have powerful economic effects.

The normative implications of such findings are interesting to consider. Should we pursue pro-marriage policies in the face of record number of adult Americans living alone? If we don’t want to have the government promoting such things, how do you close this gap working with other social levers?

This reminds me of the recent discussion-provoking cover story from The Atlantic titled “Why Women Still Can’t Have It All.”  Marriage was not the primary focus of the story though it certainly plays a role in what both men and women can accomplish. Also, it is tied to a factor not discussed in the story: as Slaughter suggests, the women may be limited by the system but the interest couples have in both working might also be related to a desire to have two incomes. Indeed, having a certain standard of living in certain metropolitan areas generally requires two incomes unless one partner is in a lucrative job. Being married increases the purchasing power of a family which is no small feat.