REVIEW & OUTLOOK (Editorial)
Movin' On Up

894 words
17 August 2000
The Wall Street Journal
A22
English
(Copyright (c) 2000, Dow Jones & Company, Inc.)
For all the festivities in Los Angeles, a dark undercurrent pulls at
today's Democrats. Listening to endless oratory about children without food
and elders without medicine, one can scarcely recognize the society in which
we live -- the most prosperous society in human history, and the healthiest.
Above all, it is a society that offers unparalleled opportunity.
Problems of course remain. In particular, some schools don't provide the
education necessary to fulfill opportunity. Financing cutting-edge health
care without rationing has yet to be solved by any society. Nor has anyone
found a salutory way to deal with the mentally ill. The human condition,
being what it is, will always produce stories that rend the heart. Yet we
should not lose sight of what we have achieved. Each decade marks
advancement in which most people live longer, in better health and with
higher standards of living. This is a society that takes seriously its great
and grand opportunity to make things better.
We understand that Democrats must cleave to their rhetoric of economic
populism. It is, increasingly, what defines them as a party. But along with
its oppressive denial of achievement, there is another problem: The language
of class warfare has no strategic traction. Just what audience do Democrats
have in mind?
Most obviously, they're targeting those in the bottom fifths, or what are
formally known as "quintiles," of the income distribution chart -- low-down
quintilers whom Democrats always contrast with top quintilers who, they
claim, have managed to grab all the money. This is the basis of Democratic
populism, and demagoguery.
It is certainly true that if one divides income into categories, there will
be bottom quintiles. But here is where Democrats goof. They assume that the
same people show up in the bottom quintiles year after year, trapped in a
rigid class society. In other words, they assume zero income mobility.
Their assumption is really nuts. Please slap your eyes on a report
published by the Federal Reserve Bank of Dallas, in 1995, which contains two
surveys of income mobility. Guess what? Over time, most bottom quintilers
moved up.
The University of Michigan's Panel Survey on Income Dynamics tracked over
3000 people from 1975 to 1991. After 17 years, only 5% of bottom dwellers
were still on the bottom. That means 95% moved up -- over half made it to
the middle-class quintiles and 29% were sitting plumply in the top fifth.
Plus, the data suggests that once a person has reached the top, he or she
has a good chance of remaining. Moreover, these upwardly mobiles really
zoomed. Rock-bottom-dwellers in 1975 saw an average gain in real income of
$25,322 by 1991 while top-dwellers, in contrast, were only $3,974 richer.
So who, exactly, were these bottom-dwellers? Well, they weren't as
downtrodden as Democrats assume. The Michigan survey reports that some were
downwardly mobile, either voluntarily through retirement or involuntarily
due to unemployment or other bad luck. In other words, the downwardly mobile
consisted of those who cheerfully washed their hands of the labor force and
those who, most likely, would earn a paycheck in the future.
As for the others, some were low-skill adults new to the work force and
some were kids, either part-timers flipping burgers or first-time
full-timers. This last bunch were those who, depending their education,
really rock-and-rolled up through the quintiles. Young adults, ages 20-24,
who finished college saw real incomes rise fivefold -- to $40,303 in 1991
from $7,711 in 1975; high school graduates doubled their income and even
dropouts logged higher earnings -- to $19,091 from $11,628.
Not to put too fine a point on it, but the bottom quintile is not our idea
of cohesive troops for a class war.
The U.S. Treasury, using entirely different data, tracked 14,351 households
from 1979 to 1988. Over this nine-year period, the survey found that 86% of
those in the lowest income bracket moved up, two-thirds into the middle
class and almost 15% into that piggy top quintile.
By the way, the Michigan data shows that more than 75% of the second lowest
quintile in 1975 had marched into higher quintiles by 1995 -- 26% rocketed
all the way to the top. Indeed, chances are that Mr. Gore's typical country
club duffer "drinking scotch and looking out at the golf links" was not to
the club born.
One more note on these bottom dwellers. As Americans get richer, the
quintiles themselves are upwardly mobile. The Michigan survey shows that
almost 98% of the lowest quintile in 1975 had higher incomes over the
following 17 years -- two-thirds scoring a higher standard of living than
the middle-fifth had in 1975.
In sum, the political difficulty with all this Democratic class warfare
rhetoric is that the intended targets are too busy moving up the ladder to
pay much attention to the populist rant.
Consider this: The Battleground Poll taken Monday and Tuesday revealed that
in a four-candidate race, Gov. Bush had widened his lead over Al Gore, at
48% to 37%. The Democrats' class warfare is a loser.