American Dream For Middle Class: Just A Dream?
AUDIE CORNISH, HOST:
Is it still possible to move up the economic ladder in the U.S.? Has the American dream become just that - a dream? As we found out from our social media callout, those questions are on the minds of many families like the Spoerners.
So for some answers to those questions, we turn to Erin Currier, who leads the Pew Charitable Trust's Economic Mobility Project. Her team recently released a report on the mobility of middle-class families. The report defines middle class as a family of four making between $50,000 and $110,000 a year. Researchers at Pew were trying to figure out how such a family manages to move up, down, or just maintain their place on the economic ladder.
Currier's team found that one in three Americans raised in the middle class fall out of the middle as adults. But Currier says that statistic only tells part of the story of social mobility in America today. To get the full picture, you need to look at both absolute and relative mobility.
Confused? Currier says, think of an escalator.
ERIN CURRIER: So imagine that there is a person who gets on an escalator at the bottom, and there's lots of other people in front, and everybody is moving up. That's kind like absolute mobility. As the nation experiences economic growth, everybody is increasing their incomes over time.
Relative mobility would be like a person getting on the escalator at the bottom and walking up the stairs, passing people in front of them. As that person's moving up, they are getting absolute mobility. They're having more money. But they are also changing positions on the ladder, as a whole. So rather than remaining at the bottom, they might move to the middle or the top.
CORNISH: Now, we got a lot of comments on our Facebook page from young adults who said that they were born in the middle class - they felt that they were middle class - and that they were not able to achieve middle-class status as an adult. And is that trend borne out by the numbers?
CURRIER: The data that we have shows, as you mentioned, that almost a third of Americans who were raised in solidly middle-class homes fall out of the middle class as adults. I think the important thing to keep in mind is that means that the vast majority of people - two-thirds of Americans - have higher family incomes than their parents did at the same age. So by that measure, the American dream is very alive and very well.
But when we look at relative mobility, the picture looks a little bit more disappointing. People whose parents were in the bottom are highly likely to stay in the bottom themselves. And peoples whose parents were in the top are highly likely to stay in the top themselves. We call that stickiness at the ends, and it belies this feeling that Americans have, that the United States promotes equality of opportunity.
CORNISH: And what does that mean for the middle, though?
CURRIER: The middle looks like the most mobile in terms of equality of moving up, equality of staying in the middle, or falling down.
CORNISH: Now, what are some of the ladders, or things you might consider ladders, when it comes to economic mobility, helping you move up or down - other than, I think, the most obvious: home ownership.
CURRIER: Yeah. We have identified postsecondary education as one of the most important drivers of mobility. People who have a four-year college degree are four times more likely to make it to the top of the income distribution, if they were raised on the bottom, than if they do not have a college degree. Savings and asset building - as you mentioned, like home ownership - is also a key driver of mobility. And finally, we found that neighborhood poverty during childhood is one of the biggest drivers we found of determining where people end up on the income distribution as a whole.
CORNISH: So it matters where your parents live, and it matters whether your parents have college degrees.
CURRIER: Exactly. Being born to the right parents makes a huge difference for your mobility prospects.
CORNISH: I mean, all of this sounds really obvious, right? So what's the thing that you found in your research that surprised you?
CURRIER: Our project has done two public opinion polls - one in 2009, and one just a few months ago. And although we're dealing with this data day in and day out, we found in both of our polls that Americans believe solidly that hard work and ambition are the two key drivers of upward mobility; that personal attributes matter more than any sort of structural advantage or disadvantage a person has. And that optimism translates into people feeling really confident that they can achieve the American dream, or that they have already.
CORNISH: At the same time, the inverse of that is when that belief goes awry, right? When politically, people start to feel the opposite way, it feels like a real backlash.
CURRIER: I think everything that's happening right now, in terms of this real disappointment about income inequality, is absolutely because the American public believes so strongly in the concept of the American dream - and rightfully so. This is a feeling that was sort of what created our nation, and what most Americans feel makes us great and separates us from the rest of the world - is the idea that if you work hard and you play by the rules, then you are going to be able to have some sort of economic security.
And more and more, as Americans feel that they are not achieving that economic security, you see that frustration.
CORNISH: Erin Courier is project manager for the Pew Charitable Trust Economic Mobility Project. Thank you so much for joining us.
CURRIER: Thank you so much for having me.
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