Yes, Mr. President, America needs more upward mobility, but your statements about declining mobility are wrong

by Ryan Streeter on January 3, 2012. Follow Ryan on Twitter.

Scott Winship has an important new National Review piece for anyone interested in the debate about upward mobility and inequality in America.

Winship, one of the best analysts of mobility around, takes President Obama to task for relying on suspect numbers in order to make a claim that upward mobility has decreased in America.

Winship writes:

In contrast to the president’s claim of declining mobility, I found that upward mobility from poverty to the middle class rose from 51 percent to 57 percent between the early-’60s cohorts and the early-’80s ones. Rather than assert that mobility has increased, I want to simply say — at this stage of my research (which is ongoing) — that it has not declined. If I include households that reported negative or no income, the rise in upward mobility I find is only from 51 percent to 53 percent, which is not a statistically meaningful increase. But the data provide absolutely no evidence that economic mobility declined, whereas the president said it had fallen by ten percentage points.

Why the difference? Because Obama’s numbers appear to have been taken from a rather sophisticated model used by a Berkeley economist that relies more on assumptions and other figures than real-world data about incomes across generations.

Winship applied the methodology to his own analysis of National Longitudinal Surveys and writes:

What if, instead of using the real-world survey data, I had relied only on published estimates describing average incomes for all families and the dispersion of incomes around those averages, and had assumed a specific correlation between parent and child incomes? Following the same approach used to produce the Obama figures, I found upward mobility to have fallen from 48 to 44 percent between the early 1960s and early 1980s cohorts, rather than rising from 51 percent to 57 percent, as the real-world data indicate it did.

Read the whole piece to see how he analyzes the suspect methodology.

His concluding paragraph sums things up well:

Here is my preferred statistic: A poor child has less than a one-in-five chance of ending up in the top two-fifths as an adult. That’s where most readers of this essay are or will end up — would you take those odds for your own child? We have an upward-mobility problem — one that is worse than in other countries. But it is no worse than it has ever been and it does not translate into a general lack of opportunity for the middle class. That may seem like splitting hairs, but it is not. America has challenges, but diminished opportunity is not one of them.