Upward Mobility Should Get Easier, Not Harder
More People Are Stuck, Running in Place
This article comes from our friends at http://www.inequality.org
by James LardnerThe U.S. has a high tolerance for inequality, it is said, because so many Americans expect to be rich someday. But that hope is fast becoming a fantasy, according to Business Week's Aaron Bernstein. In "Waking Up From The American Dream: Dead-end jobs and the high cost of college could be choking off upward mobility," Bernstein portrays a nation that, as much it might like to see itself as a land of opportunity, has become significantly more stratified in recent years.
"Even as the U.S. economy was bursting with wealth in the 1990s, minting dot-com millionaires by the thousands, conventional companies were cutting the middle out of career ladders," Bernstein writes, "leaving fewer people able to better their economic position over the decade."
Citing the research of Bureau of Labor Statistics economists Jonathan D. Fisher and David S. Johnson, Bernstein reports that one common measure of relative mobility -- the share of the population moving from one income quintile to another -- fell by two percentage points, to 62%, during the 1990s. In a decade of strong economic growth, mobility should have increased rather than decreased, Bernstein says.
The December, 2003 Business Week story also draws on a Federal Reserve Bank of Boston analysis of family income, which shows that "the number of people who stayed stuck in the same income bracket -- be it at the bottom or at the top -- over the course of a decade actually increased in the 1990s. So, though the boom lifted pay rates for janitors and clerks by as much as 5% to 10% in the late 1990s, more of them remained janitors or clerks; fewer worked their way into better-paying positions."
In the 1980s and ‘90s, American employers shipped vast numbers of blue-collar jobs abroad. Now this practice is rapidly being extended to white-collar jobs as well -- a phenomenon exemplified by an unconfirmed report in the December 15, 2003 Wall Street Journal that 4,700 high-paying software engineering positions at IBM will be gradually transferred to India and China.
Business Week tells the story of Imelda Roman, a 33-year-old single mother employed as a counselor at a nonprofit social service agency in Milwaukee. Adjusted for inflation, Roman's current salary of about $30,000 a year is almost identical to what she earned as a schoolbus driver more than a decade ago. "It's hard to find a job with a career ladder these days," Roman observes.
"The changing dynamic of the U.S. economy clearly has the most impact on those at the bottom," Bernstein writes. "Some 49% of families who started the 1970s in poverty were still stuck there at the end of that decade, the Boston Fed study found. During the 1990s, the figure had jumped to 53%, even after accounting for two-earner families. A key reason lies with the creation of millions of jobs that pay less than a poverty-line wage of $8.70 an hour…"
In today's economy, "upward mobility is determined increasingly by a college degree that's attainable mostly by those whose parents already have money or education," Bernstein continues.
"Although college enrollment has soared for higher-income students," he notes, "more children from poor families can only afford to go to community colleges, which typically don't offer bachelor's degrees. The number of poor students who get a degree -- fewer than 5% in 2001 -- has barely budged in 30 years..."
Bernstein cites a recent update of a classic 1978 study that looked at how sons fared according to the social and economic class of their fathers, defining class by education, income, and occupation. Sons from the bottom three-quarters of the socioeconomic scale were less likely to move up in the 1990s than they had been in the 1960s. only 10% of sons whose fathers were in the bottom quarter had made it to the top quarter by 1998, the authors found.
"By contrast, 23% of lower-class sons had done so by 1973, according to the earlier study. Similarly, only 51% of sons whose fathers belonged to the second-highest quarter equaled or surpassed the economic standing of their parents in the 1990s. In the 1960s, 63% did."
Immigrants, once symbols of U.S. mobility, are in the same boat. Compared with immigrants in the 1960s and '70s, a larger share of newcomers today are high school dropouts, including hundreds of thousands of poor Mexicans. The job market here pays better than the one they left behind , but there are now fewer opportunities for higher education or for a middle-class lifestyle.
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