Report: A third of middle class Americans slip down economic ladder

Sep 7, 2011

The report "Downward Mobility from the Middle Class: Waking Up from the American Dream" shows a third of children raised under middle class conditions fell out of the middle class as adults.

The report comes from the Pew Charitable Trusts. In the introduction, researchers cite a popular definition of the American Dream - your children are financially better off than you.

For varying reasons, the dream didn't work out for one third of the people they looked at.

The report used data from the 1979 National Longitudinal Survey of Youth. 12,686 young men and women who were 14-22 years old were part of that survey.

The reports authors define middle class as being "those falling between the 30th and 70th percentiles of the family-size-adjusted income distribution." Or a family with two adults and two kids making between $32,900 to $64,000 (in 2010 dollars).

Author Gregory Acs writes that while the chances of falling out of the middle class reflects what one might expect mathematically, "not all middle-class children are equally likely to fall."

Overall, the report reached four "main findings":

Marital status, education, test scores and drug use have a strong influence on whether a middle-class child loses economic ground as an adult.

Race is a factor in who falls out of the middle class, but only for men.

There is a gender gap in downward mobility from the middle, but it is driven entirely by a disparity between white men and white women.

Differences in average test scores are the most important observable racial difference in accounting for the large downward mobility gap between black men and white men, but none of the factors examined in the report sheds light on the gap between white men and white women.

The report found that African American men are much more likely to fall from their middle class background, "this report shows that nearly 40 percent of black men raised in middle-class families fall from the middle in adulthood, double the number of white men who do so."

The Washington Post writes:

The racial gap in mobility has perplexed researchers at Pew since a 2007 report that said nearly half of African Americans born to middle-income parents in the late 1960s plunged into poverty or near-poverty as adults. That report underscored the feeble grip many African Americans had on middle-class life, prompting researchers to probe deeper, said Erin Currier, project manager of Pew’s Economic Mobility Project.

The authors of the report looked at test scores on a test known as the Armed Forces Qualification Test (AFQT). The test measures reading comprehension, math knowledge, arithmetic reasoning and word knowledge. Scores on this test helped explain the difference:

Differences in average test scores are the most important observable racial difference in accounting for the downward mobility gap between black and white men.

The authors say more study is needed to understand why these test scores differ so substantially among those who were raised as middle class whites and those raised as middle class blacks.