Downward Spiral

We've heard a lot about jobs in this presidential election cycle. The idea being, I suppose, that once people have a job, regardless of the wages or the hours, they can bootstrap their way to the top. Probably for similar reasons, we don't hear much about poverty. So long as there are jobs around, political rhetoric seems to say, being poor is a choice. While both campaigns will spend many many millions on ads telling you about jobs, I doubt we'll hear much about economic mobility in America or pathways to escaping poverty.

Just because there's little talk, however, doesn't mean there isn't a terrifying problem. The latest report from Pew Charitable Trusts looks at economic mobility across generations, using real child-parent pairings. As I wrote yesterday, the findings are bleak. While children earn more than their parents did at their age, adjusted for inflation, the rich are getting richer faster than everyone else. That means that while you may be making more than your parents, you're likely still stuck near the same socioeconomic ranking. The trends are even worse among African Americans, who are more likely to fall on the socio-economic ladder.

I called Pew to talk about the report and what findings were particularly notable. I spoke to two researchers with the Economic Mobility Project, project manager Erin Currier and research manager Diana Elliott. They highlighted two particularly disturbing trends.

First, Elliott explained that middle class and poor Americans were actually losing wealth:

One of our new additions to this latest report was a small section on wealth mobility and I think one of the things that was really interesting to see in the data was that one chart that showed the breakdowns of the rungs of the ladder for income. You see the growth in every rung of the ladder. When you look at the wealth figure that looks just like that, there's actually been compression in the bottom three rungs. So in the child's generation, they're reporting less wealth than in the parent's generation. The median is lower in the child's generation than in the parent's generation. 

Currier discussed the large gap between white and black economic mobility. Low-income neighborhoods, she explained, may be a major factor. Being raised in a neighborhood where 20 percent or more of the population is poor makes you more likely to experience downward mobility:

This is a finding we've been struggling with for a few years and really trying to understand what's behind that black-white mobility gap. Neighborhood poverty during childhood is actually one of the most powerful explanatory factors that we've uncovered that explains at least that downward mobility we see in the middle. [One report] specifically shows that two-thirds of black children born from 1985 to 2000 were raised in high-poverty neighborhoods and only 6 percent of white children were. That's really hasn't changed in the last 30 years. For a long time, even though we had things like the civil rights movement and there's been quite a bit of economic and social change in this country, what has not changed is the proportion of black children being raised in high poverty neighborhoods. 

The percentage of children living in high-poverty neighborhoods does not corrolate to the percentage who are poor. In other words, of the two-thirds of black kids living in high-poverty neighborhoods, some are in families with middle-class incomes. Similarly, more than 6 percent of white children are poor, but those poor families are living in neighborhoods with lower poverty rates. Which gives these children different prospects when it comes to mobility, Currier notes:

We also know that living in a high-poverty neighborhood during childhood increases the chances of downward mobility by 52 percent. So for those African American children whose parents have actually achieved some level of economic security, just the nature of the environment that they're living in is pushing them down the economic ladder themselves as adults. And that really gets to the heart of why economic mobility is so complex. It is not simply income or family socioeconomic status that influences where their children will fall.

Pew is a non-partisan group that's frequently brought together members of both the right and left to find common ground in policy. "No party owns the American dream," Currier told me. The idea that middle-class and poor Americans are losing wealth while income differences get wider and wider should be a cause for outrage or panic (depending on your personality type.) The bleak situation for African Americans is even more complicated and disturbing. 

Both parties are heavily rooted in the idea that anything's possible in America and such a dramatic report should have newspapers and candidates declaring their plans to aid the poor and create new pathways to the middle class. Yet poverty has yet to be a major issue in the election this year—it's barely been a minor one.

 

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