I thought it was well understood that the best predictor for success was the ZIP code you grew up in.
The examples of people rising above their economic class are touted loudly for sure, but still incredibly rare. A winning lottery ticket is a solid analogy. Yet, you’ll find an endless supply of arguments that grit and perseverance are all thats needed, but Id wager there are many more wallowing in failure who exercise those very traits every day.
A lot of the people who rise above their economic class lived in those zip codes. One way or another the family was able to get/live in a house they really couldnt afford and were far poorer than the others in that zip code but the children tended to do at least as well as their peers.
Yeah, it turns out that knowing people and knowing people who can tell you what you should be doing is pretty helpful.
Additionally, high income neighborhoods tend to have access to things that aren't available to everyone.
I have the shittiest house in the block but the PTA for my kids school pays 50% of the salary for the school councillor because the district only funds it as a part time gig. Then the robotics, programming and electronics classes, also out on my the PTA.
Things like parent career presentations with rocket scientists and bankers instead of everyday me being a tradesmen like my school. Shit I didn't even know these jobs existed until I was like 30.
And that's before those people come to your graduation party and find out you want to do something that their company does. 'Hit me up after school for a recommendation for an internship'
This is also why public housing projects fail I'm so many ways. Sure you need a place to live, but you also need a stable environment, and access to a social network that can help you along.
But maybe you should also be able to live a stable and fulfilling life while being a factory worker or a tradesman. There was a time when that was possible. Not everybody can be a banker or a rocket scientist.
Absolutely, I love building complex technical systems but I'm also an pretty kick ass carpenter and mechanic and I'd probably prefer that to carrying a pager if it was easy to raise a family in the city with either gig.
Even in the projects, getting good trades jobs is a problem, because you don't have that network.
Maybe my comment was poorly phrased. What I meant is: we arrived to a point where wealth is so much concentrated that, without connection to the happy few, life is miserable for regular folks. It should not be the case. You should be able to live in a relatively modest neighborhood and still go by because people living around you have enough money to hire you as a plumber or whatever. Working class folks' network is always going to be other working class folks.
Wealth is being concentrated in fewer hands and it is slowly destroying middle-class society fabric which modern liberal* democracy is based on (* as in 18th century liberal).
It's not that rare and a winning lottery ticket is definitely NOT a solid analogy. Over a decade, roughly one quarter of households move up an income quintile. Table 1 is good for a quick overview of the numbers: https://www.clevelandfed.org/publications/economic-commentar...
Now income mobility in the US has unfortunately been declining, the American Gini coefficient has been rising and this is a problem. But let's not sensationalize it.
As for hard work, grit, perseverance etc. - I had a teacher in elementary school who always drilled the saying "Work smarter, not harder" into our brains. It's simple advice but she got the priority right. Skills pay the bills. A software engineer or a plumber gets paid a lot more for an hour of their time than a day laborer. The day laborer comes out behind no matter how hard they work. It will always be this way, and anyone would be a fool to ignore it.
So you have to build skills from day one and never stop. That is something which is under your control.
I followed the "work smarter, not harder" creed for many years and it served me well. However, in middle age I came to realize that it's not the whole story. Ultimately if you want to do well in life, there are factors that are outside of your control, and factors that are within it. You are a fool if you don't influence everything you can - so while working smart may be more important than working hard, and the zip code you're born in may be more important than both, you still have to work hard.
You have to do everything and there are no excuses. If you don't someone will eat your lunch sooner or later.
I read some theory that most of the ZIP code affect is actually the network effect plus the role model effect.
That is, if you are lucky enough to get into a prospering zip code, you will probably run into small business owners who are looking for workers (or know someone who is) and the children will be in schools where the parents expect the children to do well and behave.
This feels like an ivory tower take. I worked at a job reentry program. The difference in outcomes between those working hard and those not looked pretty stark to me. Ignore the billionaires. Focus on what you can control.
One of the most financially rewarding career moves I've ever made was to give up the manual labor jobs I had as an field archaeologist and start focusing on "easier" tech jobs. Hard work is at best mildly correlated with financial rewards, though a 5 minute conversation with most workers would quickly disabuse you of even that notion.
I had a similar thought process in my teens, my dad was a building surveyor which was a very middle class job back in the day. But it dawned on me that there's only so many building you can walk in and look at in a day, limiting your upside potential.
It seems that you are paid for how many lives you affect (and to a lesser degree - by how much you affect them), rather than how much work you do.
Some of us have been watching the Fed for more decades than merely the most recent three.
>I spent more than three decades with the Federal Reserve System as an executive and as a widely cited research economist. My training was mainstream. I learned economics from leading scholars at Princeton and Harvard. As director of the research department at the Federal Reserve Bank of Boston, I attended dozens of the Fed’s monetary policymaking meetings—the Federal Open Market Committee meetings—in DC under each of the past five chairs, observing up close how the sausage is made. All of this was rewarding and fascinating.
So back then this was recognized long ago as part of the problem that would keep the Fed from performing in the best interest of most Americans. Even more fascinating in the 1970's and like everything else since then less rewarding to boot.
>Then, about 15 years ago, the Fed partnered with a host of institutions in midsized, postindustrial New England cities to figure out how to bring back economic vitality. I was fortunate to be involved in numerous in-person discussions with residents and leaders of these low-income, often majority-minority, communities. The more I learned about their lives, the more I became aware of gaps in mainstream economics.
With that kind of background, for the professionals inside the Fed it's not surprising for it to take 15 years before a more realistic picture can be made which reflects the outcome from a mainstream system which insidiously includes too much of a predatory component.
And this looks like one of the more open-minded, aware Fed economists.
With housing (/real estate) prices the way they are, and also where they’re headed, it is no surprise that the already wealthy (being real estate asset owners) have better capabilities with a head start in financial success than those starting out without or with less.
I guess I’m referring to Indian and Chinese immigrants who come here with pretty much nothing and then through sheer hard work manage to become the richest demographics in the country.
I think you're saying that all hard-working immigrants succeed. But even I, as a non-American, have read stories of immigrants to the USA working 3 jobs and still struggling to pay the rent, let alone a mortgage.
Are they not working hard enough? If hard work alone was the predictor, why are there hard-working people struggling to pay for the most meagre of lifestyles?
Historically, even before the recent era, children of immigrants have been the most successful cohort.
And in particular the Asian immigrants have done outstandingly. For instance the median income of Asian households as well above that of caucasians, and has been for quite some time (I can't recall how far back).
The last few years may have favored immigrants more soundly but for the last 50 or 60 years that is not the case and they have still outperformed.
The examples of people rising above their economic class are touted loudly for sure, but still incredibly rare. A winning lottery ticket is a solid analogy. Yet, you’ll find an endless supply of arguments that grit and perseverance are all thats needed, but Id wager there are many more wallowing in failure who exercise those very traits every day.