Visualizing the Decline of Upward Mobility in One Chart
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The Decline of Upward Mobility in One Chart

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Decline Upward Mobility

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The Decline Of Upward Mobility In One Chart

For decades, a majority of Americans have been able to climb the economic ladder by earning higher incomes than their parents. These improving conditions are known as upward mobility, and form an important part of the American Dream.

However, each consecutive generation is finding it harder to make this ascent. In this graphic, we illustrate the decline in upward mobility over five decades using data from Opportunity Insights.

Understanding The Chart

This graphic plots the probability that a 30-year-old American has to outearn their parents (vertical axis) depending on their parent’s income percentile (horizontal axis). The 1st percentile represents America’s lowest earners, while the 99th percentile the richest.

As we move from left to right on the chart, the portion of people who outearn their parents takes a steep decline. This suggests that people born into upper class families are less likely to outearn their parents, regardless of generation.

The key takeaway, though, is that the starting point of this downward trend has shifted to the left. In other words, fewer people in the lower- and middle-classes are climbing the economic ladder.

Decade BornChance of Outearning Parents (Bottom Percentile)Chance of Outearning Parents (50th Percentile)Chance of Outearning Parents (Top Income Percentile) 
194095%93%41%
195090%81%15%
196086%62%7%
197090%59%16%
198079%45%8%

Declines can be seen across the board, but those growing up in the middle-class (50th percentile) have taken the largest hit. Within this bracket, individuals born in 1980 have only a 45% chance of outearning their parents at age 30, compared to 93% for those born in 1940.

Stagnating Wage Growth a Culprit

One factor behind America’s deteriorating upward mobility is the sluggish pace at which wages have grown. For example, the average hourly wage in 1964, when converted to 2018 dollars, is $20.27. Compare this to $22.65, the average hourly wage in 2018. That represents a mere 11.7% increase over a span of 54 years.

However, this may not be as bad as it sounds. While the prices of some goods and services have risen over time, others have actually become more affordable. Since January 1998, for example, the prices of electronic goods such as TVs and cellphones have actually decreased. In this way, individuals today are more prosperous than previous generations.

This benefit is likely outweighed by relative increases in other services, though. Whereas inflation since January 1998 totaled 58.8%, the costs of health and education services increased by more than 160% over the same time frame.

Income Distribution

While wages have been stagnant as a whole, it doesn’t paint the full picture. Another factor to consider is America’s changing income distribution.

Income Class1970 Share of U.S. Aggregate Income2018 Share of U.S. Aggregate Income
Upper 28%48%
Middle62%43%
Lower 10%9%

Source: Pew Research Center

Like the data on upward mobility, the middle class takes the largest hit here, with its share of U.S. aggregate income falling by 19 percentage points. Over the same time frame, the upper class was able to increase its share of total income by 20 percentage points.

Is It All Bad News?

Americans are less likely to earn more than their parents, but this doesn’t mean that upward mobility has completely disappeared—it’s just becoming less accessible. Below, we illustrate the changes in size for different income classes from 1967 to 2016.

The upper middle class has grown significantly, from 6% of the population in 1967 to 33% in 2016. At the same time, the middle class shrank from 47% to 36% and the lower middle class shrank from 31% to 16%.

The data suggests that some middle class Americans are still managing to pull themselves up into the next income bracket—it’s just not an effect that was as broad-based as it’s been in the past.

Does The American Dream Still Exist?

The American Dream is the belief that upward mobility is attainable for everyone through their own actions. This implies that growth will be continuous and widespread, two factors that have seemingly deteriorated in recent decades.

Researchers believe there are numerous complex reasons behind America’s stagnating wages. A decline in union membership, for example, could be eroding employees’ collective bargaining power. Other factors such as technological change may also apply downwards pressure on the wages of less educated workers.

Income inequality, on the other hand, is clearly shown by the data. We can also refer to the Gini-coefficient, a statistical measure of economic inequality. It ranges between 0 and 1, with 0 representing perfect equality and 1 representing perfect inequality (one person holds all the income). The U.S. currently has a Gini-coefficient of 0.434, the highest of any G7 country.

Long story short, the American Dream is still alive—it’s just becoming harder to come by.

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Money

The Richest People in Human History, to the Industrial Revolution

What do Augustus Caesar, Cosimo de Medici, Mansa Musa, and Genghis Khan have in common? They were some of the richest people in all of history.

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The Richest People in Human History, to the Industrial Revolution

Click here for a larger, more legible version of the infographic that you can explore in-depth.

When we think of wealth today, we often think of the massive personal fortunes of business magnates like Bill Gates, Elon Musk, Jeff Bezos, or Warren Buffett. However, it is only since the Industrial Revolution that measuring wealth by one’s bank account has been a norm for the world’s richest.

For most of recorded human history, in fact, the lines around wealth were quite blurred. Leaders like Augustus Caesar or Emperor Shenzong had absolute control of their empires—while bankers like Jakob Fogger and Cosimo de Medici were often found pulling the strings from behind.

This infographic we created with Texas Precious Metals focuses on the richest people in history up until the Industrial Revolution, and it highlights key facts and anecdotes on how they created their wealth.

Is This List of People Definitive?

While it is certainly fun to speculate on the wealth of people from centuries past, putting together this list is exceptionally difficult and certainly not definitive.

Here’s why:

Firstly, much wealth in early periods is tied to land (Genghis Khan) or entire empires (Augustus, Akbar), which makes calculations extremely subjective. What is most of Asia’s land worth in the year 1219? What separates personal fortune from the riches of an empire that one has full control of? There are a wide variety of answers to these questions, and they all influence the figures chosen to be represented.

Secondly, records kept from Ancient eras are scarce, exaggerated, or based on legends and oral histories. Think of King Solomon or Mansa Musa—these are characters described as immeasurably rich, so trying to put their wealth in modern context is fun, but certainly not guaranteed to be historically accurate.

Lastly, wealth and conversion rates can be approached in different ways as well. Take Crassus in the Roman Republic, who had a peak fortune of “200 million sesterces”. Well, that’s a problem for us in modernity, because that stash could be worth anywhere from $200 million to $169.8 billion, depending on how calculations are done.

So, enjoy this list of the wealthiest historical figures, but keep in mind that it is mostly for fun—and that the list of the richest people in history may change depending on who you ask!

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Personal Finance

Is $1 Million Enough for Retirement in America?

The average American needs their retirement savings to last them over a decade. In which cities is $1 million enough to retire comfortably?

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Is $1 Million Enough for Retirement in America?

The average American needs their retirement savings to last them 14 to 17 years. With this in mind, is $1 million in savings enough for the average retiree?

Ultimately, it depends on where you live, since the average cost of living varies across the country. This graphic, using data compiled by GOBankingRates.com shows how many years $1 million in retirement savings lasts in the top 50 most populated U.S. cities.

Editor’s note: As one user rightly pointed out, this analysis doesn’t take into account interest earned on the $1 million. With that in consideration, the above calculations could be seen as very conservative figures.

How Long $1 Million Would Last in 50 Cities

To compile this data, GOBankingRates calculated the average expenditures of people aged 65 or older in each city, using data from the Bureau of Labor Statistics and cost-of-living indices from Sperling’s Best Places.

That figure was then reduced to account for average Social Security income. Then, GOBankingRates divided the one million by each city’s final figure to calculate how many years $1 million would last in each place.

Perhaps unsurprisingly, San Francisco, California came in as the most expensive city on the list. $1 million in retirement savings lasts approximately eight years in San Francisco, which is about half the time that the typical American needs their retirement funds to last.

CityHow long $1 would last (years)Cost-of-living IndexAnnual expenditures
(after using annual Social Security)
Memphis, TN45.376$22,043
El Paso, TX40.381.4$24,789
Wichita, KS39.782.1$25,145
Tulsa, OK38.883.2$25,705
Indianapolis, IN38.683.5$25,857
Milwaukee, WI37.684.9$26,569
Oklahoma City, OK37.385.4$26,824
Columbus, OH37.285.5$26,875
Kansas City, MO36.786.2$27,231
Detroit, MI35.887.6$27,943
Baltimore, MD35.388.2$28,248
Louisville, KY35.388.4$28,349
San Antonio, TX34.489.7$29,011
Omaha, NE34.389.8$29,062
Albuquerque, NM33.691.1$29,723
Tucson, AZ33.391.6$29,977
Jacksonville, FL32.393.5$30,943
New Orleans, LA30.896.3$32,367
Houston, TX30.896.5$32,469
Charlotte, NC29.698.9$33,690
Forth Worth, TX29.399.8$34,148
Arlington, TX28.8100.6$34,554
Philadelphia, PA28.6101.2$34,860
Nashville, TN28.5101.4$34,961
Dallas, TX28.4101.6$35,063
Raleigh, NC28.2102.3$35,419
Fresno, CA28.1102.6$35,572
Phoenix, AZ27.6103.7$36,131
Mesa, AZ27.4104.2$36,385
Colorado Springs, CO27.3104.5$36,538
Virginia Beach, VA26.9105.6$37,097
Minneapolis, MN26.6106.5$37,555
Chicago, IL26.4106.9$37,759
Atlanta, GA26.3107.5$38,064
Las Vegas, NV24.8111.6$40,149
Sacramento, CA22.9118.2$43,506
Austin, TX22.7119.3$44,065
Miami, FL21.7123.1$45,998
Denver, CO20.4128.7$48,846
Portland, OR20.0130.8$49,914
Washington, D.C.16.4152.1$60,747
San Diego, CA15.4160.1$64,816
Long Beach, CA15.3160.4$64,969
Boston, MA15.1162.4$65,986
Seattle. WA14.0172.3$71,021
Los Angeles, CA13.9173.3$71,530
Oakland, CA13.8174.4$72,089
New York, NY12.7187.2$78,599
San Jose, CA10.8214.5$92,484
San Francisco, CA8.3269.3$120,355

A big factor in San Francisco’s high cost of living is its housing costs. According to Sperlings Best Places, housing in San Francisco is almost 6x more expensive than the national average and 3.6x more expensive than in the overall state of California.

Four of the top five most expensive cities on the list are in California, with New York City being the only outlier. NYC is the third most expensive city on the ranking, with $1 million expected to last a retiree about 12.7 years.

On the other end of the spectrum, $1 million in retirement would last 45.3 years in Memphis, Tennessee. That’s about 37 years longer than it would last in San Francisco. In Memphis, housing costs are about 2.7x lower than the national average, with other expenses like groceries, health, and utilities well below the national average as well.

Retirement, Who?

Regardless of where you live, it’s helpful to start planning for retirement sooner rather than later. But according to a recent survey, only 41% of women and 58% of men are actively saving for retirement.

However, for some, COVID-19 has been the financial wake-up call they needed to start planning for the future. In fact, in the same survey, 70% of respondents claimed the pandemic has “caused them to pay more attention to their long-term finances.”

This is good news, considering that people are living longer than they used to, meaning their funds need to last longer in general (or people need to retire later in life). Although, as the data in this graphic suggests, where you live will greatly influence how much you actually need.

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