Washington, DC – 11/13/2007 – Two-thirds of American families are earning more today than their parents did a generation ago, yet their likelihood of moving up—or down—the economic ladder still depends in large measure on their parents’ position, according to a new report issued by The Economic Mobility Project, an initiative of The Pew Charitable Trusts. Comprised of a Principals’ Group of experts from The American Enterprise Institute, The Brookings Institution, The Heritage Foundation and The Urban Institute, the project seeks to investigate the status of economic mobility in America.
The project issued three reports today, each authored by Julia B. Isaacs, Child and Family Policy Fellow at Brookings, examining economic mobility across generations. The first looks at how families have fared over the last 30 years, while the other reports investigate differences in mobility by race and gender.
American Families’ Ability to Climb the Economic Ladder Still Depends on Parents’ Income, Pew Press Release
This is one of those reports that seem to be fairly positive but once you start looking at it more closely you realize are also pretty depressing. According to Issacs, for example, “two-thirds of Americans saw increases in income, adjusted for inflation. At the same time, Americans live in smaller families, so higher incomes are spread over fewer people.” That sounds good.
Then you read on: “Forty-two percent of children born to parents at the bottom of the income distribution remain at the bottom, while 39 percent born to parents at the top, stay at the top.” That does not sound so good. “So, there is considerable mobility but it’s also the case that a child’s economic position is heavily influenced by that of his or her parents.” Class is always tied to family, but this suggests a certain rigidity in the system.
The Brookings Institute report suggests that the glass may not be half-full at all. “The report found that only 31 percent of black children born to parents in the middle-income group have family income greater than their parents, compared to 68 percent of white children in the same circumstance.” So the rigidity in the system has racial ties, too. Even worse, black middle class families have a harder time harnessing whatever economic advantage they may have earned for their children.
“Further, nearly half (45 percent) of black children in the middle-income group,” the reports goes on to say, “fall to the bottom of the income distribution in one generation, compared to only 16 percent of white children.” The Urban Institute provides the worse news yet, and it’s about gender, although it impacts all of us. “The report on the comparative economic mobility of men and women, highlights the fact that the growth in family incomes is largely due to the fact that far more families now have two earners.”
“The overall trends are generally upward and positive,” writes, Pew’ Managing Director, John E. Morton, “but there are significant numbers of Americans for whom this is not the case, and for whom the American Dream seems to be out of reach.” This seems an understatement, at best. Morton tries to sound positive, but these numbers simply reflect that change is slow to come if it ever comes at all.