Interesting look at U.S., social mobility, and small business employment

General General Discussion
1

Apparently we are at the bottom of the list of self employment.

http://www.cepr.net/index.php/publications/reports/int-comp-small-business/

This report discusses two aspects of economic mobility in the United States. The first is the question of intergenerational mobility, or the degree to which the economic success of children is independent of the economic status of their parents. A higher level of intergenerational mobility is often interpreted as a sign of greater fairness, or equality of opportunity, in a society.

The second aspect is the short-term question of the amount by which family incomes change from year to year. By studying short-term mobility we can determine whether incomes are rising or falling for families at different points in the income distribution. We can also determine whether the size of these income variations, or the level of annual income volatility, is changing over time. Increased volatility is undesirable to the extent that it represents an increase in economic insecurity.

The key findings relating to intergenerational mobility include the following:

Children from low-income families have only a 1 percent chance of reaching the top 5 percent of the income distribution, versus children of the rich who have about a 22 percent chance.

Children born to the middle quintile of parental family income ($42,000 to $54,300) had about the same chance of ending up in a lower quintile than their parents (39.5 percent) as they did of moving to a higher quintile (36.5 percent). Their chances of attaining the top five percentiles of the income distribution were just 1.8 percent.
Education, race, health and state of residence are four key channels by which economic status is transmitted from parent to child.

African American children who are born in the bottom quartile are nearly twice as likely to remain there as adults than are white children whose parents had identical incomes, and are four times less likely to attain the top quartile.

The difference in mobility for blacks and whites persists even after controlling for a host of parental background factors, children’s education and health, as well as whether the household was female-headed or receiving public assistance.

After controlling for a host of parental background variables, upward mobility varied by region of origin, and is highest (in percentage terms) for those who grew up in the South Atlantic and East South Central regions, and lowest for those raised in the West South Central and Mountain regions.

By international standards, the United States has an unusually low level of intergenerational mobility: our parents’ income is highly predictive of our incomes as adults. Intergenerational mobility in the United States is lower than in France, Germany, Sweden, Canada, Finland, Norway and Denmark. Among high-income countries for which comparable estimates are available, only the United Kingdom had a lower rate of mobility than the United States.

Key findings relating to short-run, year-to-year income movements include the following:

The overall volatility of household income increased significantly between 1990-91 and 1997-98 and again in 2003-04.

Since 1990-91, there has been an increase in the share of households who experienced significant downward short-term mobility. The share that saw their incomes decline by $20,000 or more (in real terms) rose from 13.0 percent in 1990-91 to 14.8 percent in 1997-98 to 16.6 percent in 2003-04.

The middle class is experiencing more insecurity of income, while the top decile is experiencing less. From 1997-98 to 2003-04, the increase in downward short-term mobility was driven by the experiences of middle-class households (those earning between $34,510 and $89,300 in 2004 dollars). Households in the top quintile saw no increase in downward short-term mobility, and households in the top decile ($122,880 and up) saw a reduction in the frequency of large negative income shocks.

For the middle class, an increase in income volatility has led to an increase in the frequency of large negative income shocks, which may be expected to translate to an increase in financial distress.

The median household was no more upwardly mobile in 2003-04, a year when GDP grew strongly, than it was it was during the recession of 1990-91.

Upward short-term mobility for those in the bottom quintile has improved since 1990-91, with no significant offsetting increase in downward short-term mobility.
Households whose adult members all worked more than 40 hours per week for two years in a row were more upwardly mobile in 1990-91 and 1997-98 than households who worked fewer hours. Yet this was not true in 2003-04, suggesting that people who work long hours on a consistent basis no longer appear to be able to generate much upward mobility for their families.

link to the full report…

http://www.cepr.net/documents/publications/small-business-2009-08.pdf

The reason it’s called the American “Dream” - is because you have to be ASLEEP to believe it.

-George Carlin

2

its no surprise Europe has a huge rate of “self employment” which can be spin for unemployment. Europe has long had a stagnant economy and permanently high unemployment rates

3

no comments huh? :wink:

4

Yeah, I am going to call BS on this. What is the source for this data? How was it generated.

Granted, the US has many policies that discourage entrepreneurship, enterprise, and self-employment. But, we are nowhere near as bad as Europe. I have traveled to Europe often enough and I don’t recall anyone being that entrepreneurial.

5

if you read the link, its made very clear. you should read it BEFORE you call bullsh*t.

We use the most recently available, internationally comparable data from the Organization for Economic Cooperation and Development (OECD) to measure the share of employment in small businesses in 22 rich democracies.

OECD, 2009 OECD Country Statistical Profiles, http://stats.oecd.org/index.aspx?r=899636

6

It said something about “employment in small business”. Not self-employed. Big difference.

7

Europeans and hippies have a habit of spinning poor numbers with BS.

As an example American health care(far from perfect;)) is routinely rated at the bottom of the barrel. This means nothing. If the people putting the reports out want to give more power to percentage of the population with “free” health insurance and less importance to quality of care or innovation, the US loses.

If you’re into this kind of thing and I know RickRock is… The numbers Europeans and the UN produce make the United States look like the worst offender in regards to reduction of CO2. Somehow they come to the conclusion that despite the fact that many(most:confused:) European countries had a larger increase in output of CO2 than the United States.

8

I was stationed in Germany from 2003-2007, and their unemployment was about double what ours was just from what I heard locally. They also mask an even higher unemployment number with “paying” people to stay at home (such as women with children). We had a staff sgt married to a local national, and she was getting around 1K euros a month to be a “housewife”.

That is what happens in a heavily taxed, overpaid, and restricted economy. Much like the union workers in the US who get paid to watch TV or some other worthless task just because they have to be on the clock despite their being no work for them.

Notice it takes a deep recession for our unemployment to match Europe’s “good” numbers, and their stats should be at least double what their official count is if you include all the people the government’s over their pay to do nothing.

Our GDP is barely lower than the entire EU, and the EU has 200M more citizens.

9

I wouldn’t be so sure on the quality of care, thats very arguable.

http://www.rwjf.org/files/research/qualityquickstrikeaug2009.pdf

http://www.ahrq.gov/qual/nhqr08/Key.htm

For the past 6 years, the NHQR has summarized the state of health care quality. This undertaking is difficult, as no single national health care quality survey collects a standard set of data elements from the same defined population for the same period each year. Rather, data are available from a wide range of sources that focus on different populations and data years.

Despite these limitations, we find that health care quality in America is suboptimal.

And as to innovation, look at the amount of money we spend. It FAR outpaces any other nation.

http://www.nytimes.com/2006/10/05/business/05scene.html?partner=rssnyt&emc=rss
The National Institutes of Health’s current annual research budget is $28 billion, All European Union governments, in contrast, spent $3.7 billion in 2000, and since that time, Europe has not narrowed the research and development gap. America spends more on research and development over all and on drugs in particular, even though the United States has a smaller population than the core European Union countries. From 1989 to 2002, four times as much money was invested in private biotechnology companies in America than in Europe.

A little off topic, but I think it bears looking at the French healthcare model.

http://www.businessweek.com/magazine/content/07_28/b4042070.htm

Michael Moore’s documentary Sicko trumpets France as one of the most effective providers of universal health care. His conclusions and fist-in-your-gut approach may drive some Americans up the wall. But whatever you think of Moore, the French system—a complex mix of private and public financing—offers valuable lessons for would-be health-care reformers in the U.S.

In Sicko, Moore lumps France in with the socialized systems of Britain, Canada, and Cuba. In fact, the French system is similar enough to the U.S. model that reforms based on France’s experience might work in America. The French can choose their doctors and see any specialist they want. Doctors in France, many of whom are self- employed, are free to prescribe any care they deem medically necessary. “The French approach suggests it is possible to solve the problem of financing universal coverage…[without] reorganizing the entire system,” says Victor G. Rodwin, professor of health policy and management at New York University.

France also demonstrates that you can deliver stellar results with this mix of public and private financing. In a recent World Health Organization health-care ranking, France came in first, while the U.S. scored 37th, slightly better than Cuba and one notch above Slovenia. France’s infant death rate is 3.9 per 1,000 live births, compared with 7 in the U.S., and average life expectancy is 79.4 years, two years more than in the U.S. The country has far more hospital beds and doctors per capita than America, and far lower rates of death from diabetes and heart disease. The difference in deaths from respiratory disease, an often preventable form of mortality, is particularly striking: 31.2 per 100,000 people in France, vs. 61.5 per 100,000 in the U.S.

That’s not to say the French have solved all health-care riddles. Like every other nation, France is wrestling with runaway health-care inflation. That has led to some hefty tax hikes, and France is now considering U.S.-style health-maintenance organization tactics to rein in costs. Still, some 65% of French citizens express satisfaction with their system, compared with 40% of U.S. residents. And France spends just 10.7% of its gross domestic product on health care, while the U.S. lays out 16%, more than any other nation.

To grasp how the French system works, think about Medicare for the elderly in the U.S., then expand that to encompass the entire population. French medicine is based on a widely held value that the healthy should pay for care of the sick. Everyone has access to the same basic coverage through national insurance funds, to which every employer and employee contributes. The government picks up the tab for the unemployed who cannot gain coverage through a family member.

SAFETY NET
But the french system is much more generous to its entire population than the U.S. is to its seniors. Unlike with Medicare, there are no deductibles, just modest co- payments that are dismissed for the chronically ill. Additionally, almost all French buy supplemental insurance, similar to Medigap, which reduces their out-of-pocket costs and covers extra expenses such as private hospital rooms, eyeglasses, and dental care.

In France, the sicker you get, the less you pay. Chronic diseases, such as diabetes, and critical surgeries, such as a coronary bypass, are reimbursed at 100%. Cancer patients are treated free of charge. Patients suffering from colon cancer, for instance, can receive Genentech Inc.'s (DNA ) Avastin without charge. In the U.S., a patient may pay $48,000 a year.

France particularly excels in prenatal and early childhood care. Since 1945 the country has built a widespread network of thousands of health-care facilities, called Protection Maternelle et Infantile (PMI), to ensure that every mother and child in the country receives basic preventive care. Children are evaluated by a team of private-practice pediatricians, nurses, midwives, psychologists, and social workers. When parents fail to bring their children in for regular checkups, social workers are dispatched to the family home. Mothers even receive a financial incentive for attending their pre- and post-natal visits.

A typical PMI can be found in Goutte d’Or, a poor neighborhood at the foot of Montmartre that has been home for the past 20 years to a swelling population of immigrants from Africa and Southeast Asia. On Rue Cavé, a tidy modern building is given over entirely to caring for expecting mothers, infants, and young children. The place usually is bustling with kids scrambling over toys, while mothers, often immigrants in colorful headdresses and with babies strapped to their backs, talk to their doctors as part of twice-monthly evaluations.

PMI and other such programs are starting to get attention in U.S. health-care circles. “If we really want to ensure that no child is left behind, then the PMI system is a good way to do it,” says Daniel J. Pedersen, president of the Buffett Early Childhood Fund. “It’s based on the practical idea that high-quality investments made at the start of a child’s life will pay huge dividends to both the child and society in the future.”

To make all this affordable, France reimburses its doctors at a far lower rate than U.S. physicians would accept. However, French doctors don’t have to pay back their crushing student loans because medical school is paid for by the state, and malpractice insurance premiums are a tiny fraction of the $55,000 a year and up that many U.S. doctors pay. That $55,000 equals the average yearly net income for French doctors, a third of what their American counterparts earn. Then again, the French government pays two-thirds of the social security tax for most French physicians—a tax that’s typically 40% of income.

Specialists who have spent at least four years practicing in a hospital are free to charge what they want, and some charge upwards of $675 for a single consultation. But American-style compensation is rare. “There is an unspoken and undefined limit to what you can charge,” says Dr. Paul Benfredj, a gastroenterologist in Paris.

Many French doctors, in fact, earn more by increasing their patient load, or by prescribing more diagnostic tests and procedures—a technique, also popular in the U.S., that inflates health-care costs. So far France has been able to hold down the burden on patients through a combination of price controls and increased government spending, but the latter effort has led to higher taxes for both employers and workers. In 1990, 7% of health-care expenditures were financed out of general revenue taxes, and the rest came from mandatory payroll taxes. By 2003, the general revenue figure had grown to 40%, and it’s still not enough. The French national insurance system has been running constant deficits since 1985 and has ballooned to $13.5 billion.

That’s why France is gearing up to make changes. It already requires patients to register with a general practitioner before visiting a specialist, or else agree to a lesser reimbursement, much like many U.S. insurance plans. But France isn’t likely to make major changes to a system most citizens say they like. Why would they? Says Shanny Peer, policy director at the independent French-American Foundation: “France gets better results for less money and everyone is covered.”

not perfect, but IMO better than what we have here.

more on France’s system…

http://www.npr.org/templates/story/story.php?storyId=92419273

If you’re into this kind of thing and I know RickRock is… The numbers Europeans and the UN produce make the United States look like the worst offender in regards to reduction of CO2. Somehow they come to the conclusion that despite the fact that many(most:confused:) European countries had a larger increase in output of CO2 than the United States.

And even with that larger increase, we are still the worst offenders when it comes to CO2 by far.

So its not just the “hippies” that play with the numbers. Its done on both sides. :wink:

10

Not really. In most cases, the positive outcome for treatments of serious diseases are far better in the US than elsewhere. There is a reason people from all over the world come to the US for treatment of serious diseases and ailments – the outcomes are far superior in most cases.

There are LOTS of problems with US Healthcare. UN rankings however are totally full of sh*t. They rank you based on how socialized you are, not based on quality of outcome. Their use of life expectancy is totally bogus. Quality of healthcare plays only a very small role in that. Environment, diet, amount of exercise, etc play a much much much bigger role.

11

The US system needs MAJOR MAJOR reform. The suggested reforms of the Democrats are 180 deg off the way that we need to go to reform the system. This has been discussed here several times already. Most people will not disagree that reforms should be made. However, the idea that gov can control a market without screwing it up is ludicrous and any “reform” based on that notion should be immediately dismissed.

12

http://www.taurillon.org/Europe-vs-USA-Whose-Economy-Wins

Now while it is true that the US has a better employment and unemployment record, the key to understanding the difference between the EU and the US lies in disaggregating employment by age group. If we compare employment rates in 2005 of the 25-55 age group, there is virtually no difference; e.g., the employment rates are 86 and 88 percent for the EU-15 and the US respectively (ignoring differences in how the data are recorded). The US data show a higher employment rate for youth (15-24) and a much higher rate for preretirement (55-64) and post retirement (65 and over) groups. What the average employment and unemployment figures hide is the agespecific nature of the ‘European problem’. The picture remains much the same when comparing the US and the EU-25.

Once again, the crucial element in understanding these differences is income distribution. At the youth end of the scale, young workers in the US get less education and those who go to university are more likely to work part-time than their European counterparts. At the older end of the scale, pension provision in the US is neither as broad nor as generous as in the EU, so people – particularly the poor who cannot afford to save for retirement – carry on working

you also have to take into account how these statistics are derived. the EU and the United States come to these numbers differently. And it is widely known that the official recorded number of unemployed people here in the states is lower than what it actually is.

13

i’ve actually seen other studies done outside of the U.N and WHO that rank the U.S a lot worse.

We do have the best cancer care in the world. but again, look at the cost. we FAR outspend any other nation. and yet we’re still far from being the best healthcare system in the world.

France’s infant death rate is 3.9 per 1,000 live births, compared with 7 in the U.S., and average life expectancy is 79.4 years, two years more than in the U.S. The country has far more hospital beds and doctors per capita than America, and far lower rates of death from diabetes and heart disease. The difference in deaths from respiratory disease, an often preventable form of mortality, is particularly striking: 31.2 per 100,000 people in France, vs. 61.5 per 100,000 in the U.S.

14

So say the authors of that paper. One of whom worked for Clinton and Carter and is a fellow at the “Urban Institute.” The other was involved with Medicare, a program of course known for it’s dedication to the privatization of medicine.:stuck_out_tongue:

Because there is FAR more incentive to innovate here, there is far more capital directed towards it here. In fact, due to the fact that the American people often wind up subsidizing expensive care for the rest of the world because of their artificially low prices, our system also subsidizes developments that occur in the rest of the world because they can make money here.

Our nationalized radio network says so, so it must be true… I actually like NPR, but it’s dangerous listening for someone who can’t recognize what is slant and what isn’t.

You missed the point entirely. CO2 and it’s “catastrophic” effects is a bunch of horse malarkey. The point was that they see fit to lecture us and show us graphs on our emmissions, when in fact they are farther off of their plan by a large margin.

15

I’d like to see the marketplace introduced into medicine. The pseudo market that exists is better than what the dems are proposing though.

16

I’d have to say look closer at France’s system. They have combined both private and government options.

I believe a combination of both government and private healthcare would be the best option. The government should provide options for those who cannot or choose not to pay for it, and there should also be the option of private healthcare. That way those that can afford it can get the better, private healthcare while those who cannot or choose not to get the government option. Thats just a rough synopsis.

I agree the Democrats are WAY off the mark, but probably for different reasons than you. For example, I believe any healthcare reform should have some type of public option. They completely caved on that almost immediately and instead it has become a giant giveaway to insurance companies.

17

This is totally bogus comparison when ranking health care systems. If you look at actual health care for diabetes and heart disease I think the numbers show that the US system provides better care (they did when I looked at this last year but I cannot find it now). France has less diabetes and heart disease in the first place because the French are not as stupid when it comes to lifestyle as Americans. They have a lower mortality for these things not due to healthcare but due to lifestyle.

18

A public option does not work in the long run. Too many people will choose to let others pay and that shifts costs to the private payers until the private payers cannot afford to pay any more.

And it is the antithesis of freedom and responsibility. It is un-American in the traditional sense, which embraces freedom and responsibility.

19

An unemployed “worker” is still unemployed even if they are young or old.

I understand the difference in how the numbers are derived. We hide our actual numbers by basically only counting recently unemployed, and they pad their numbers by paying people to be things like housewives + all the other BS jobs they create and/or subsidize. They also work less, and have much more vacation time so a company has to hire more people to accomplish the same amount of work. Its basically a partially “fake” employment structure over there.

20

Because Joe Blow who works hard to purchase his family quality health insurance should also pay for some jackass.

I have a very good friend who is Canadian. Last year while visiting his family in Canada he was diagnosed with colon cancer. He was told that if his treatment would begin in SIX WEEKS. His physician there asked him if he was covered by Shell in the US, of course he was so he flew to Houston that night and began treatment at MD Anderson(about the best cancer treatment in the world,) the very next day.