For reasons not entirely clear, discussion of increasing the minimum wage have been closely linked with expressions of concern over income inequality. In Seattle, for example, Mayor Ed Murray’s task force looking into the $15 minimum wage is called the Income Inequality Advisory Committee. Rep. Farrell’s statement in support of a $12 minimum wage included the standard allusion to gains among high earners.

During the recovery, top earners have done quite well, the stock market has seen record highs, and corporate profits have never been better.

President Obama’s speech on inequality included a call for a higher minimum wage. He said,

…a dangerous and growing inequality and lack of upward mobility … has jeopardized middle-class America’s basic bargain — that if you work hard, you have a chance to get ahead.

I believe this is the defining challenge of our time

But research released today finds upward mobility has not declined in decades. The report, released by the National Bureau of Economic Research and written by five highly regarded economists, represents a significant gain in our understanding of income distribution and mobility in America. (Summary here.)

Contrary to the popular perception, we find that percentile rank-based measures of intergenerational mobility have remained extremely stable for the 1971-1993 birth cohorts.

And, while income inequality has grown, it has a different character than many have supposed.

…much of the increase in inequality has come from the extreme upper tail (e.g., the top 1%) in recent decades, and top 1% income shares are not strongly associated with mobility across countries or across metro areas within the U.S.

Excellent coverage of the report in The Washington Post, New York Times, the Wall Street Journal, and the Associated Press.

James Pethokoukis of the American Enterprise Institute draws one important inference.

The key issue, then, is not whether mobility is getting worse but whether there is just too little opportunity, especially from the bottom, than we would like… It should matter less who our parents are, especially if the top rung on the ladder is further away than ever. And America can do better if all of us, including the president, focus on real problems — such as the emerging impact of automation on work and income, education, family structure, transportation, cronyism, and the level of economic growth — not scoring political points in an election year.

We’re going to have a debate this year. Ideally, it can begin with good information. Today’s NBER report is a step in that direction.