Listening to certain political commentaries, one is led to believe that the “rich” are getting richer, while the “poor” are getting poorer. These same commentators tell us that income mobility in the United States generally does not occur. In this context, the “rich” are perceived as a relatively fixed group, consisting of someone other than us. The conclusion from these “facts” is that income redistribution must be performed by government policies.
The Federal Reserve released a March 2011 study entitled “Surveying the Aftermath of the Storm: Changes in Family Finances from 2007 to 2009” that demonstrates none of this is true. Instead, the American economy provided opportunity and economic mobility, even during the recent recession. The Federal Reserve study is unique in that it used the same families included in the 2007 analysis addressing family finances and attitudes. In so doing, the study addressed changes in a way that is missed with point-in-time information.
We describe the report and its conclusions in this article. The Federal Reserve’s report is written in dry terms, and received practically no media coverage. That is unfortunate since the results of this study are relevant to ongoing policy discussions.