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Income Inequality and Social Mobility: YOU'VE GOT IT ALL WRONG!

21/3/2014

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Editor: Crass Cash
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This statistic is very mathematically flawed. As a result it throws off illogical conclusions.

I continuously hear about how more socialistic countries have greater social mobility than more capitalist countries with greater income inequality. If this doesn't make your brain tweak when you first hear it maybe you don't have one.  How can a country with considerably higher taxes make it so that poorer people move up the social ladder?  They bring the steps closer...

I started digging to see what made up this statistic and after about a minute it jumped out at me. Social mobility is determined this way: How many different income sections does the average person move up in a lifetime?  They're broken out into 5 sections.  They then try to figure the odds of a person moving from income group 1 to income group 2.  

Here's where the stupid shit starts. These socialist countries lift up the bottom 20% and bring down the top 20% through income redistribution.  Thus making the steps from one class to another closer.  Here's the math to prove it. 

Income sections are broken up equally from $20k going up to $100k the more socialistic countries.  In the USA let's say it's broken up in the following manner: it goes from $20k up to $150k.  So if you live in the more socialistic countries you need to double your income by 100% in order to move up one section.  In the more capitalistic countries you would need to increase your income by 162.5% in order to move up by one section! Even though the person in the capitalistic country makes $12,500 more than the other.  In the eyes of the govt and this statistic they're both doing just as well, but that's obviously not the case. 
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    This website was created due to the atrociously misguided financial advice that I've heard over the decades.  Financial freedom is not intellectually strenuous, but it takes discipline. 

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