Many Americans Falling Out of the Middle Class

Many Americans Falling Out of the Middle Class

NEW YORK (MainStreet) — The American Dream is as much about your kid’s future as it is about buying that dream house or retiring comfortably. The script generally goes something like this: You work hard all your life, put your kids through college and watch as they live a better life than you did.

Unfortunately, it doesn’t always play out that way.

According to a report by Pew’s Economic Mobility Project, 28% of people who grew up in the middle class eventually fell down the income ladder. The report was assembled by analyzing the National Longitudinal Survey of Youth study, which looked at teenagers in 1979 and returned to assess their economic status between 2004 and 2006.

In many cases, the root cause of Americans’ “downward mobility” is obvious. Failing to graduate high school, for instance, greatly increases the chances someone will fall out of the middle class.

But whether it happens to your child also has a lot to do with race, gender and drug use.

While just 21% of white men wind up falling out of the middle class (defined as making between the 30th and 70th percentile of the American income distribution), a whopping 38% of black men who grew up in the middle class wind up slipping down the ladder. The report finds that much of this gap is explainable by existing differences between the two groups, including standardized test scores and environmental factors such as fathers’ occupational statuses.

Less explainable are the differences between genders. While women of all races are equally likely to lose their middle-class status, white women are much more likely than white men to fall out of the middle class – 30% of white women fall out, versus just 21% of white men, a gap the report concludes is “almost completely unexplained.”

Divorced? That financially devastating event makes it more likely for men and women alike to fall out of the middle class. But once again women tend to come out of it worse: Divorced women are 38 percentage points more likely than average to find themselves falling below the middle-class threshold. And never getting married also bodes poorly, especially for women.

Ultimately the report raises more questions than it answers. While it identifies differing test scores as the main culprit behind the racial divide in downward mobility, it nevertheless acknowledges that it can’t explain why white men tend to perform much better on standardized tests. And it likewise calls for further research on the question of gender disparities and their impact on downward mobility.

Whatever the root causes, though, it’s clear we’re not all equally positioned to achieve the American Dream.

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