I did a little reading on this a while ago after DT posted elsewhere that being smart has nothing to do with being rich, which sounded like bullshit.
What I found was docs saying that IQ and wealth have an odd relationship. IQ has a positive effect on income, but high IQ and high wealth don’t always go together. Instead, high IQ and screwing up your finances do.
“Regression results suggest no statistically distinguishable relationship between IQ scores and wealth. Financial distress, such as problems paying bills, going bankrupt or reaching credit card limits, is related to IQ scores not linearly but instead in a quadratic relationship. This means higher IQ scores sometimes increase the probability of being in financial difficulty.”
The results from this study actually do show a positive correlations between IQ and wealth (and income). Once you try to control for additional variables like education, being divorced, occupation, being a smoker, etc., of course you will reduce the apparent impact of IQ. Here are some data points from this paper:
Average income for IQ 75 or below: $15,020,
Average income for IQ 100: $36,826,
Average income for IQ 125 or more: $55,555.
Average net worth for IQ 75 or below: $5775,
Average net worth for IQ 100: $57,550,
Average net worth for IQ 125 or more: $133,250.
IQ is just one trait that is known to be correlated with higher incomes. There are others that have been proven to be correlated: competence, dutifulness, self-discipline, social ability, emotional stability, working longer hours, etc. For people advocating income redistribution and similar policies, it might be a tempting to incorrectly believe that income differences between people are due just to luck. They are simply wrong.
Isn’t the average income for an American somewhere in the $48,000 range?
Holy cripes, we’re all a bunch of geniuses! And my income tax return PROVES that I’m more than twice as smart as the average American! Where do I sign up for Mensa?
I remember when they did allow it and my asshole fellow citizens took it as freedom to leave several metric tons of glass bottles all over the National Mall for someone else to pick up. Fuck 'em.
Of all the examples you could have given to prove your point, those have to be the maddest!
JK Rowling only had the time to complete her first book because she was receiving unemployment and child benefits. Bill Gates was born to a wealthy family and used his mother’s connections to secure the deal that put DOS on IBM PCs.
Seriously, could you have found any worse examples to make your argument with?!
I’m an American, and I cashed a check just the other day with no form of ID other than my bank card. I don’t think I’d have needed even that if I’d written my account number on the check.
I actually cannot remember ever having been asked to show a photo ID when cashing a check. I’m not certain that it’s never happened, but am pretty sure it’s not happened with my current bank, which I’ve been using for four years.
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Seriously, could you have found any worse examples to make your argument with?!
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Gates family was upper middle class. If they had a million or so when he was a kid, that would have been about it. He’s a multi-billionaire today (something like 40-50 billion, IIRC). That’s an order of magnitude difference.
And how about Jobs and the Woz, if you think that Gates is a bad example?
While income mobility in the U.S. is lower than many would like, labeling it as an economically immobile place seems wholly unfair.
I recall a recent study by The Brookings Institution that concluded parent-child incomes in the U.S. had a correlation of roughly 0.5. This means a parent’s income level, on average, predicts around 25% of their children’s future income level (correlation of 0.5 = r-squared of 0.25). Given that the IQ of a parent and child are positively correlated (don’t know specific figures, sorry), this implies that at a minimum, 75% of a child’s future income level is independent of the parent’s income level (actual number should be higher given IQ heritability). Not perfect, but certainly not immobile either.
