It is worse than worthless to say that a child of someone in the bottom 20% is “richer” than his/her parent. Richer by $10, $1000? So what? A completely meaningless statistic. You didn’t even give a percentage average. Richer by 1%? 5%?
What does it matter that the child of someone who’s receiving $1M/year is now receiving $750K/year? Meaningless.
The question that you should have answered is: “What percentage of the children of parents in the bottom 20% moved up and out of the bottom 20% to the next quintile? over X period of time?”
“Do we have a system where a majority of the children of the people in the bottom 20% moved into the next quintile?”
I suspect that the answer to those questions is a resounding “No”? But, you should do the numbers so we will actually know.
The real story is that after roughly 50 years of claiming that making people in the top 20% richer helps people in the bottom 40% we see that the ratio of the wealth of the top 20% to the wealth of those in the bottom 20% has at least doubled. Clearly, making the people at the top richer disproportionately just helps the people at the top.
Relative to those in the top two quintiles, the people in the bottom 40% are only getting poorer. Where are the numbers that show what percentage of the people in the bottom 40% have moved up to the middle quintile?
A rational economy would have a normal-curve wealth curve, relatively small at both ends and large in the middle. Instead the we have the opposite.
Advantages and disadvantages concentrate in positive and negative feedback loops. A rich-get-richer system is just that, no matter how much you may want to justify it by claiming that half the children of people in the bottom 20% make 5% per year more than their parents while the children at the top make 5% less.
A meaningless observation.
That’s just economic slight-of-hand to divert attention from the increasing concentration of wealth at the top and massive poverty at the bottom.
— David Grace