We Were Middle-Class Once, And Young – Paul Krugman – NYT

Paul Krugman, Laureate of the Sveriges Riksban...

Paul Krugman, Laureate of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008 at a press conference at the Swedish Academy of Science in Stockholm (Photo credit: Wikipedia)

This short blog from Paul Krugman is a GOOD READ. Check it out!

We Were Middle-Class Once, And Young – NYTimes.com.

I recommend that you follow the link in Krugman’s blog to  Miles Corack’s article (or open this link).

Look at Corak’s chart entitled “Great Gatsby Curve: More Inequality is Associated with Less Mobility across the Generations”. The UK is right up there, just behind the US in being the country with greatest income inequality. However, the UK and Italy have the highest inter- generational economic mobility (higher than the US); the latter term is defined as:

 Intergenerational economic mobility is measured as the elasticity between paternal earnings and a son’s adult earnings, using data on a cohort of children born, roughly speaking, during the early to mid 1960s and measuring their adult outcomes in the mid to late 1990s.

As I read these articles, my mind drifted to the UK where the current problems for the middle-classes are probably just as acute as the US. Let’s recap. The wealthy have gone from strength to strength. The unemployed and scroungers are protected by social safety nets. Meanwhile, the middle-class seem to have been abandoned.

This leads me to an interesting open question:

How should policy-makers help the middle-class to recover from austerity?

Any thoughts?

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