Quoted from Mankiw:
Since 1998, the U.S. population has increased by over 20 million. Nearly half of that growth has come from immigration, legal and illegal. Overwhelmingly, these immigrants enter at the lowest rungs on the income ladder. Statistically, this immigrant surge not only reduces the income of the "average" household, but also changes the occupants of the lowest income classes.
To understand what's happening here, envision a line of people queued up for March Madness tickets. Individuals move up the line as tickets are purchased. But new people keep coming. So the line never gets shorter, even though individuals are advancing.
I think that is true. We are an economically mobile nation, with no permanent underclass. People here rise and fall economically depending on their age, life choices, desires, capacities, and luck.
Related: The poor in Europe do the same as in the US - but they lack the American outlets for any ambition they might have because their governments sit on their heads. If you define poverty as the lowest 10% in income, American poor do just fine. Worstall. And, of course, if you define it as the lowest 10% in income, you will always have them, even if they have two cars and wide-screen TVs (and do not include govt assistance as income).
