Is the American Dream Slipping Away for the Middle Class?

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American DreamEvery parent wants more for their child than they had for themselves. Ideally, each generation should move forward. But it's not a given in America. A middle class upbringing does not guarantee the same status over the course of a lifetime, finds a new study Downward Mobility from the Middle Class: Waking up from the America Dream by The Pew Charitable Trusts.

A third of Americans raised in the middle class, those defined as being between the 30th and 70th percentiles of the income distribution, fall out of the middle as adults, according to the report. In the parent's generation, this definition of middle class roughly translates to income from about $32,900 to $64,000 in 2010 for a family with two adults and two children. For the children's generation, the income range was $53,900 to $110,000 for a family of four.

There are differences in the rates of downward mobility from the middle based on both family background and personal characteristics.

The report looked at downward mobility among black, white and Hispanic men and women raised in the middle class in three ways: the percentage that fall out of the middle class, the percentage that fall 20 or more percentiles below their parents' rank in the income distribution, and the percentage of those whose income is 20 or more percent below their parents.

What did the Research Show?

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

Marriage matters. Those who are divorced, widowed or separated are more likely to fall down the economic ladder than those who are married. Education helped. If men and women raised in a middle-class home obtain education after high school, they are less likely to be downwardly mobile.

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Gender divides.
The report also finds a gender gap in downward mobility, but it is driven entirely by a disparity between white men and white women: 30% of white women fall out of the middle class, but only 21% of white men do.

Race counts most when it comes to men. Race is a factor in who falls out of the middle class, but only for men. According to the report, 38% of black men fall out of the middle, compared to 21% of white men. In contrast, white, black and Hispanic women are equally likely to drop out of the middle class.

"What was most surprising, was the fact that the racial gap in downward mobility is limited to black and white men," says Erin Currier, project manager for Pew's Economic Mobility Project,

Differences in average test scores for the Armed Forces Qualification Test (AFQT) which survey participants were asked to take, are the most important observable factor (of those considered in this report) that accounts for the large downward mobility gap between black men and white men, explains Currier.

Says Currier, "Every child should have the opportunity to achieve the American Dream. We need policies that promote enrollment in and completion of post secondary education and to ensure that all children and teens have access to effective educational programs."
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