The United States is no longer the top country for achieving the American Dream, a Federal Reserve official claims.
“While income mobility in the United States has been relatively unchanged, it remains well below several other nations,” New York Fed President William Dudley said in a speech
about economic opportunity and income mobility.
“The probability of moving from the bottom quintile to the top quintile is 7.5 percent in the United States, as compared to 11.7 percent in Denmark and 13.5 percent in Canada — two countries with relatively high levels of intergenerational mobility.”
“So effectively the chance of achieving the American Dream is not the highest for children born in America,” said Dudley, a permanent voter on policy.
“Broadly, the economy’s potential growth rate depends on effectively investing in and taking advantage of all of the resources in the economy — in particular, we need to achieve the full potential of the human capital of all Americans,” Dudley said.
“For the United States to reach its maximum economic potential, all Americans must have the opportunity to reach their potential,” he said.
Dudley touted income mobility as a key ingredient of the American Dream. He explained the difference between income mobility and income inequality, the Free Beacon
explained. “Income mobility is a dynamic concept — the degree to which individuals or families can move up or down in the income distribution over time,” he said. “Income inequality is a static concept — how unequal are individual or family incomes at a particular point in time.”
Dudley seemingly was referring to recent research by Stanford University economist economist Raj Chetty, who claimed the ability to move up from the bottom quintile to the top quintile in America remains below several other nations, including Denmark and Canada.
Chetty, one of the world’s foremost economists and currently a visiting professor at Harvard University, also has released a major new study
that says the richest Americans live at least 10 years longer on average than the poorest, but the gap isn't as wide in many communities, especially affluent, highly educated cities, the Associated Press
reported. That research emphasizes that income plus where you live help determine life expectancy.
Chetty isn’t alone, as other academics also have supported similar theories.
Miles Corak, professor of economics at the Graduate School of Public and International Affairs at the University of Ottawa, tackled the inequality and social mobility in his study “Inequality From Generation to Generation.”
"Corak’s research showed that the family an American child is born into greatly affects that child’s future earnings. His international rankings of the countries with the worst intergenerational mobility included Chile, the U.K., Italy and the U.S. (in that order)," Newsweek
"Countries offering the best intergenerational mobility were Denmark, Norway, Finland and Canada. Countries falling somewhere in the middle were Spain, Japan, Germany and New Zealand," Newsweek reported.
But one of history’s greatest investors apparently disagrees with such a dismal outlook.
Warren Buffett recently said in his annual letter
to Berkshire Hathaway shareholders that any baby born in the country today will live better than their parents, even with the current slow economic growth.
"It's an election year, and candidates can’t stop speaking about our country's problems (which, of course, only they can solve)," he writes. "As a result of this negative drumbeat, many Americans now believe that their children will not live as well as they themselves do,” the “Oracle of Omaha” wrote.
"That view is dead wrong: The babies being born in America today are the luckiest crop in history."
(Newsmax wire services contributed to this report).
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