Social Mobility: Is The American Dream Slipping Away?

Transcript

LYNN NEARY, HOST:

This is TALK OF THE NATION. I'm Lynn Neary, in Washington. Neal Conan is away. It's an American story as old as Horatio Alger: Hard work, determination and presto, you can change your station in life. But increasingly many Americans find themselves stuck where they are on the economic ladder, that American dream just out of reach.

A recent study from the Economic Mobility Project of the Pew Charitable Trusts finds that 83 percent of adult children make more money than their parents did, but that doesn't necessarily mean they're better off socially or economically. We'll hear more about that study in a bit, but we also want to hear your stories today.

Tell us about a moment when you realized you were moving up or down the economic ladder? What happened? Our number is 800-989-8255. Our email address is talk@npr.org. And you can join the conversation at our website. Go to npr.org, and click on TALK OF THE NATION.

Later in the program, ghostwriting for Sweet Valley High. But first: Is it still possible for Americans to move up the economic ladder? Marilyn Geewax is a senior business editor for NPR News, and she joins us now in Studio 3A. Welcome to the program, Marilyn, good to have you with us.

MARILYN GEEWAX, BYLINE: Hi Lynn.

NEARY: So economic mobility seems to be on the minds of people on both the left and the right. Jeb Bush had this to say on MSNBC's "Morning Joe" earlier this week.

(SOUNDBITE OF TV SHOW, 'MORNING JOE')

JEB BUSH: I think going forward we have to deal with our longer structural problems. The biggest one, as far as I'm concerned, is that we're no longer socially mobile as a country. You have people that are born poor, and there's a higher and higher probability they're going to stay poor; and you have people that are born rich, and there's a greater probability they're going to stay rich.

MIKA BRZEZINSKI: They'll get richer.

BUSH: It's just - it is so un-American.

NEARY: Un-American. Is it, Marilyn?

GEEWAX: Well, it's certainly true that the idea of economic mobility is a core principle for Americans. It's what the American dream is all about. But we have to separate out a couple of ideas. One is the idea of income inequality and the other is economic mobility. So the first idea is that we have some people who are very rich and some people who are very poor.

And in the United States, we've always had a pretty high tolerance, actually, for income inequality because we're a nation of immigrants. People show up, they don't have five cents in their pocket, you know that. You don't expect to become a millionaire the next day. But you do want to come to the United States and feel like you can move up, that you can change where you started out.

So this is a - these are two separate ideas. We tolerate income inequality a great deal, but we want to know that we can move up and down based on our own efforts and not just who our parents were. So this is very important to our idea of how our economy should work.

NEARY: And is it true that it is harder to move up the social ladder, the economic ladder, now?

GEEWAX: Well, there's a lot of studies being done about that, and the Pew Research folks have done a great deal of work on that. But I think most studies tend to show these days that people make more than their parents, but that's because, you know, we're better educated, we're more productive. Of course you would expect to make more than your parents did. The economy is bigger, and we should be more productive workers, so therefore we should have a little bit more.

But are you moving up relative to your parents? Do you start out in one of those lower economic rungs and get to run your way up? Well, I think what we've seen in the last couple of years is that in sort of the big, broad, squishy middle, there are a lot of people who are maybe a little bit more upper class, and they slid down to middle or lower-middle class, and that's pretty darn painful because people lost jobs.

We've got 12 million people unemployed right now, and that's pretty tough. A lot of people who felt they were solidly middle class have slipped to a lower rung. But, you know, then the economy starts to pick up, and then maybe you move back up again. We do have mobility within that middle section.

The problem that Jeb Bush was referring to is that - this question about can people at the lowest rungs, the bottom fifth, move up? And the statistics are not very good there. It tends to be that people who are wealthy stay wealthy, and people who are poor stay poor.

NEARY: But if some people in the middle, let's talk about the middle now for a minute, those people in the middle who there is some movement going on, but those who might be dropping down a little bit, is that - is the reason for that the recession, or is it a larger problem than that? I mean, how does all this fit in looking at the larger economic picture?

GEEWAX: The thing that comes through all the data no matter how you look at it is that what helps you stay in the upper realm of middle-class life is the more education you have. So there are people who may have started out fairly well-educated, they thought 30 years ago, and now they're in their 50s, and their skills have gotten rusty, they've fallen behind.

So I think we're seeing some things that are structural, that is middle-class jobs have gone away especially for factory workers. We've lost quite a few manufacturing jobs. So that's hurt. But there are also people who haven't kept up with their education, so that hurts a lot of people.

So yes, we've seen - there really are lots of middle-class people who feel like they've come down a notch or two. But there's also a lot of young people who have found opportunities in the new economy, and they're starting to move up. So we have some fluidity here. I think we'll need to get further away from this Great Recession to really see how much of it was temporary, you just lost your job, maybe you need to go back to night school, and how much of it is a structural change that has really, really hurt the middle class.

NEARY: Well, let's bring Erin Currier into the conversation now. Erin joins us also in Studio 3A. She's director of the Economic Mobility Project at the Pew Charitable Trusts. And they've been studying the facts and drivers of mobility. Welcome to TALK OF THE NATION, Erin.

ERIN CURRIER: Thank you for having me.

NEARY: So I think Marilyn's referred to some of the work that you've been doing at Pew. And your most recent study, this did reveal some good news, right?

CURRIER: Sure, I think as Marilyn said, there are different ways that we look at economic mobility. On the one hand, we can look at absolute change in income or wealth over time. And by that metric, we absolutely see this glass half full. Over the last generation, the economy has grown a lot, and Americans at all rungs of the income ladder have felt that growth.

So we see that overall, more than 80 percent of Americans today have higher family incomes than their parents did, and that's tremendous. But when we look at this other metric, which is where they fall in the economic distribution as a whole, what their rank is, we see a lot of stickiness at the ends.

So even though someone has started at the bottom may have significantly more money than their parents did, they're still stuck at the bottom in a relative sense. They haven't been able to get out of, say, the bottom 20 percent. And that stickiness is really what challenges our notions of the American dream and calls into question whether we truly do have equality of opportunity.

NEARY: And Marilyn was referring earlier to the fact that education is so important. What do you see in terms of that bottom level, where it's really hard to move up? If a person is able to get a good education, does that guarantee that they're going to move upwards?

CURRIER: There's not a guarantee, but it definitely increases the chances. Research that we've done looking at the benefits of a post-secondary education and specifically having a four-year degree show that for someone who starts in the bottom, whose parents were in that bottom fifth of the income distribution, them having a post-secondary degree increases their chances of making it all the way to the top by about three times.

NEARY: All right, let's take a call now. We're going to go to Eric(ph) in Denver, Colorado. Hi Eric.

ERIC: Hi.

NEARY: Hi, go ahead.

ERIC: Yes, I'm just calling about the situation with the baby boomers staying in the workforce longer. I personally have experienced some upward mobility issues in my workplace based on, you know, people not stepping out of positions and creating chances to move up. And I'm kind of wondering if that's something a lot of people are experiencing or if that's more of just kind of my experience with the workforce.

NEARY: Is that part of this issue that we're talking about of economic and social mobility, or is that a different kind of economic issue?

GEEWAX: Well, really, as I said, there are some different ways of looking at things, that is the relative position, where you have economic mobility over generations. But there's also individual economic mobility, that is you start out as a college student, and you want to move up, and you get a promotion, and you get a transfer, and eventually you end up with a nice office and a good income. And that sort of individualized mobility is very important to people, as this caller is saying.

So I think that that's almost a different set of studies about how fast can you rise in this economy, and, you know, it's complicated because you can see individuals like Mark Zuckerberg, you know, the guy that founded Facebook, went straight from his dorm to, like, billionaire overnight. So there are a lot of people who on an individual level, if you're creative and hardworking, and you're sometimes just plain old lucky, you can still jump a lot as an individual.

But when you look at it sort of as a generational issue, where there are lot of younger people today who would like to move up, but there are a lot of baby boomers who may be sort of blocking those positions. There are a whole lot of Americans that are in their 50s right now, and, you know, that's actually - they're a good thing or a bad thing for employers because those baby boomers have a lot of experience in the workplace, but as they hit their 60s and 70s and clear out, it will give a lot more room for people like this younger man here to move up with individual mobility.

NEARY: I'm curious, Eric, do you feel like you're sort of sliding down the ladder?

ERIC: No, I think I've just kind of stayed stagnant, I guess you could say. My position hasn't really progressed past a certain point. So I'm kind of at a point where I either need to leave the company I'm in and move up or continue to work for the company that I love and, you know, wait for positions to open up, but...

NEARY: How old are you?

ERIC: I'm 29.

NEARY: Oh, so you've got some time.

ERIC: I've got time.

GEEWAX: But you are at sort of one of those decision points where people do need that sense that they're moving up or moving out. And that's not particularly - those kinds of individual cases are not overly - that's not a big concern of public policy, shall we say. That's an individual choice, should I move here or there, or how do I get ahead of all these baby boomers.

But what we're more concerned with in terms of public policy is this idea of big groups of people having relative mobility. Do they have those ladders to climb out? Can they get that education? Are there student loans? Those are really public policy issues that Congress has to deal with.

NEARY: Yeah, well thanks so much for your call, Eric.

ERIC: Sure.

NEARY: And that idea, also Marilyn, just going back to education, I guess we're going to keep returning to that subject, but, you know, can those who are in the really bottom layers of society economically get the education, get the opportunity for education and really beginning when they're children?

GEEWAX: Well, I just wanted to point to a couple of examples. You know, when you look at the Supreme Court, I really think that the case of Justice Sotomayor, who recently has this book out, talks about how she went from being a Puerto Rican girl in the South Bronx living in, you know, pretty dire circumstances, her father was an alcoholic, he dies when she's a - she ends up at Yale Law School, and she's on the Supreme Court.

And there's Clarence Thomas. He's from Pinpoint, Georgia, and that is the aptly named Pinpoint. And he ended up at Yale Law School, and he ends up on the Supreme Court. Education was the ladder, and that's the public policy issue.

NEARY: We're talking about social mobility with Erin Currier of Pew and NPR's Marilyn Geewax. We're going to take a short break, but stay with us. I'm Lynn Neary. This is TALK OF THE NATION from NPR News.

(SOUNDBITE OF MUSIC)

NEARY: This is TALK OF THE NATION from NPR News. I'm Lynn Neary. Americans love a rags-to-riches story like Andrew Carnegie, an American industrialist who emigrated from Scotland in 1848 when he was 13 and found a job in the boiler room of a textile factory. But those stories are more exceptions than rules.

A recent Pew report found only four percent of people raised in the lowest economic fifth make it all the way to the top as adults. So if there was a moment when you realized you were moving on the economic ladder, either up or down, we want to hear from you. What happened? Our number is 800-989-8255. And our email address is talk@npr.org. And you can join the conversation on our website. Go to npr.org, and click on TALK OF THE NATION.

NPR's Marilyn Geewax and Erin Currier, director of the Economic Mobility Project at Pew, are my guests. And Erin, we've been talking about the bottom, and we've been talking about the middle, but what about the top. Let's talk about the top and the fact that it looks like if you're born rich, you've got a pretty good chance of staying rich.

CURRIER: That's exactly right. Our research has shown that people who are raised in the top fifth of the income distribution are highly likely to stay there. In fact, less than half fall even to the middle. So their chances of remaining in the upper echelons of our economic ladder are very high.

NEARY: And that does seem, you know, to use Jeb Bush's words earlier that we heard, that does seem un-American somehow.

CURRIER: We've done a couple of public opinion polls to really assess how Americans feel about economic mobility and what they think should be the case for Americans. Do we actually have the American dream still, and should policy be involved in promoting the American dream?

And what we have found both in 2009 and in 2011 is this overwhelming sense from Americans that hard work and ambition matter and that when people work hard, they get ahead. And as we know from the data, that really just isn't bearing out.

NEARY: It's not true?

CURRIER: It's not true.

NEARY: Because that is certainly sort of deep in our blood, I think, that we think that's the case.

GEEWAX: I think that it's sort of true and not true in that OK, it's definitely great if you have wealthy parents, but usually what that suggests is that you also have access to really great education. I mean, if you come out with a degree from an Ivy League college, and your parents are well-connected, your chances of doing well in life are probably pretty good.

But most of those people who graduate from a good college don't just sit with their feet up on the desk. They pretty much get to work, too. They may be a top-notch surgeon, or maybe they work on Wall Street or whatever, but mostly people in this country who make pretty good incomes really do work, and you can move yourself up from lower levels to higher levels through hard work if your hard work involves not just backbreaking work - I mean there are people who work very, very hard physically - but unless you're getting that education, I don't know how we can stress that enough.

If you're hard work is directed towards getting a really good degree, and you can start out at a community college, move up to a state college, flip that into a graduate degree and eventually get to be a doctor or whatever, if you can stay on that education ladder, you can move up.

NEARY: I've got to stop you a second because I think that we also once had a very strong middle class that was made up of working-class people who may not have had an education or may have had, you know, skills that don't require a higher education. And not everybody, not everybody is that kind of a person, Erin. I mean, just how do you address that?

CURRIER: Well, it has been the goal of our project to really deconstruct what's happening with economic mobility and to understand not only what people's chances are for movement up and down the economic ladder but also what factors really drive that mobility. We absolutely know that education at all levels is critical, but we also know that other things matter, too, and they're all interrelated, and sometimes they're difficult to separate out.

So for example we know that neighborhood poverty during childhood is a huge driver of downward mobility, and so the question is: What is it about the neighborhood that's driving that mobility? Certainly it could have something to do with the education systems. It could have something to do with the labor markets in that neighborhood. It could have something to do with access to green space, access to grocery stores, right? It's difficult to know all of those mechanisms. But clearly the neighborhood poverty and the education are related.

Similarly, we know that savings and assets matter a great deal and that for people to be able to take advantage of educational opportunities, for example, they may need access to student loans or other assets that their family has in order to make those inroads up. All these things are interacting with each other all the time, and they're all important and critical for mobility.

NEARY: Complex, it's a complex picture.

GEEWAX: And Lynn, this is where public policy is such an important thing because the point you make is really true. In the 20th century, you could be a poor immigrant, get a job at an auto factory, get a union job, make good money and really move yourself up without having a huge amount of education. But the 21st century really requires skilled workers. And allow me to say that you don't have to have a college degree, but you have to have a high level of skill. So maybe you're a skilled machinist or a skilled plumber or other kinds of things. But you can't just think you'll show up on a factory floor, push a wheelbarrow somehow and make money.

The 21st-century economy really requires people to get the kind of job training and the skills that are needed, and that's where public policy plays the role.

NEARY: All right, let's take a call from Tomas(ph), I think it is, from Spartanburg, South Carolina. Hi.

TOMAS: Hi, hi. What I wanted to say first is that I think mathematics is the one thing that is recession-proof, and that can help you either move sideways or upwards. My parents were - my dad was a janitor, and I'm originally from Peru. And I was - we were able to move here eventually. And I - he worked in a company, a car company where there were engineers. And they had nice cars. They had nice offices.

I saw that growing up, when I would go to his job, and I just put one plus one together. You know, I liked math at the time, and I figured if I become really good at math, I can change - you know, I just figure I could do something good with my life. I could do better than my dad. And I did. I went for a computer science degree.

And I'm not rich, you know, I'm not rich, I'm not poor, either. But I'm comfortable with my family, with my wife and my kids. And that's my comment. I think mathematics is the one thing that can really - that we should push for people to go to college for or in high school, et cetera.

NEARY: All right, thanks for your call, Tomas. I have to say I'm glad I didn't have to depend on my math skills, but...

(LAUGHTER)

NEARY: But what's your take on that because actually, I mean, math is really important. You're talking about the 21st century, and I think a lot of the skills now are very math-based, aren't they?

GEEWAX: Yes, I think that for the kind of economy that we're developing, it requires a high level of paying attention. You have to do your homework. You have to have certain skills to be able to get ahead because it is tough to move up from those bottom ranks.

And one thing that he said I think is important, there's a lot of research now suggesting that it's important who your friends are. And you talked about that in the neighborhood thing, where he said he saw people who had something better. He was not just stuck in, you know, everyone around me is poor, and I'll never see anything better.

He had an opportunity to see hmm, maybe if I do this, I can move up to that. And that's, you know, an important idea in this economic ladder, that we give kids an opportunity to see that there are other ways of moving up. And, you know, you don't want to cut the programs probably that allow people to experience a wider circle than just their own neighborhood.

NEARY: All right, let's take a call from Clifton(ph) in Greenville, North Carolina. Hi Clifton.

CLIFTON: Hi, how are you doing?

NEARY: I'm good, go ahead.

CLIFTON: All right, well, I'm a 22-year-old male from - I've grown up in North Carolina my whole life. But I - you know, I didn't finish high school. You know, I ended up dropping out in my last year. And, you know, I've always worked, though, from when I was old enough to start working, I did. You know, my parents were never wealthy. My parents were always lower-class Americans.

But - and honestly, you know, I kind of feel I think it's a little ridiculous the income inequality in America, but that's beside the point. Well...

NEARY: Do you feel like you're stuck - now let me just ask you, Clifton. Do you feel like you're stuck in place, or do you feel...

CLIFTON: Well, the thing is I got lucky. I mean, when I got out of high school, or when I dropped out of high school, I was working, you know, restaurant jobs, you know, pretty much anything I could do to make any sort of money because I was on my own at 17. You know, I wasn't living with my parents anymore. So I had to do something.

But, you know, and what I really feel like is that the government didn't do anything for me when that happened, but it was my own fault that it happened. But what really got me a good job - and I work at Dish Network now, and I make, you know, over $30,000 a year. So I'm a middle-income American who didn't graduate high school. I mean - so I feel really lucky and really blessed, but, you know - and I'm really comfortable where I'm at, you know.

But I don't feel like anybody helped me except people that I knew and people that cared about me and actually cared about my situation because, you know, my father was connected. And I think that's a lot of why people aren't successful nowadays. It's about being connected a lot of the time. I mean, unless - you know, that's why I have so many friends that graduated with four-year degrees, and they just - they're working RadioShack. I mean - and I have so much more...

NEARY: All right. Let me get our experts here in the studio to respond, Clifton, to that thought that you just brought up, which I think is interesting, which is it's important to be connected. And, you know, how does somebody who's way down on the ladder get those connections? I mean, we've talked about education, but even still, you have to do a little bit more than just get the college degree.

CURRIER: Yes. This is something we refer to as social capital. It's this idea that the networks and the people that you're connected to can be really helpful in getting you that leg up, in helping you maneuver through education, but also potentially getting you an internship or getting you that summer job or giving you good advice when you need it. Those things are difficult to track quantitatively, but we know that they matter and that they influence mobility.

NEARY: You know, I have the impression - this is totally just, you know, an impression, and I'm wondering if there's anything you've studied that would - you know, if there's any studies of it that have been done of this, which is that the people that - I mean, the people who make it out of the bottom seem to be - seems to me they have to be exceptional people. I mean, we were talking about Clarence Thomas before or, you know, some of the other examples that we've come up with. These are pretty amazing people. I mean, do you have to be amazing to get yourself out of the bottom?

CURRIER: I don't think you have to be amazing. The data show that 43 percent of people who start at the bottom remain stuck at the bottom. So that's a pretty high percentage, but that still means that a little less than 60 percent make it up out of the bottom. They don't necessarily make it far. We know 70 percent stay in the bottom two-fifths of the income distribution. So they don't necessarily even make it to the middle. But it does take, as we've been saying, education.

And another thing that we have noticed a lot with our research is that more often than not, we need two earners in a household, instead of just one, in order to achieve upward mobility. So, more and more, we're seeing that mobility is a family enterprise, that that matters. It now takes two earners to do what the previous generation was largely able to do with just one.

NEARY: And two educated earners?

CURRIER: Education always helps. And then, of course, you get into this question of how education builds upon mobility, because a college graduate is likely to be with another college graduate, a high school graduate likely to be with another high school graduate.

NEARY: Erin Currier is the director of the Economic Mobility Project at the Pew Charitable Trusts. And you are listening to TALK OF THE NATION, from NPR News. Marilyn, do you want to add something to that?

GEEWAX: Yes. I think that one of the big issues, getting back to the Jeb Bush point about worrying about economic mobility, is we have to be sure that people can still see the rungs of the ladder, that they know that there is a way to climb out of things. So public libraries, schools, Pell Grants for poor students, affordable student loans, all of those kinds of things, job training programs to help people improve their skills.

A lot of these things right now look a little endangered, but I want to just add a note of optimism that something that is maybe getting a little bit better is more access to free education from online learning. There are a lot of courses that you can actually sort of sit in - go to a public library, sit in front of a computer and take some classes where you can start to learn and move up, improve your own education, just through your own efforts.

So one can only hope that some of those kinds of online learning experiences will help democratize education and give some more people an opportunity, but, of course, they need to have access to a public computer so that they can actually sit there and spend their time learning.

NEARY: Right. Let's take a call from Tiffany. She's calling from Nashville. Hi, Tiffany.

TIFFANY: Hi. And I'm not really sure if this helps at all, but I feel like you guys are categorizing. There's two categories in this conversation. There's people who are educated, and there's - and people that aren't. There's a middle ground, here. I am educated. I have two degrees. And from the age of 15 up until six months ago, I worked in the service industry, the food and beverage industry, and I made a ridiculous amount of money, and cash-wise, on paper, probably not.

But there are - and I probably shouldn't even be saying this out loud - but I, you know, average about $400 a night. Now that I am not in the - I stopped being in the food and beverage industry just because it's exhausting. I'm there - you know, you get there at 4 o'clock in the afternoon, and sometimes - I mean, most of the time you get out at three or 4 o'clock in the morning. It's just really hard on your body, but I made a lot of money.

And now that I am more in the corporate world, I can barely get by, you know? And it's just that - there's a middle ground there. There - what do you do when you're in this position? What drives people to go to school and get an education when they are in the bracket that I'm in and I make way - and I'm making way more money not using a degree?

GEEWAX: Well, I'm sure Erin could confirm this, as well, but the thing about having education is that you tend to not fall lower. That is, you just described yourself that you made a great deal of money when you were young. You have energy. You can work long shifts. You can work doubles, and you might make $400 a night, and that's great. But when you're 50, you probably won't be able to keep up with that kind of a schedule. You won't be able to make that kind of money. So you would start to become poor. How do you prevent that sliding? The way to prevent sliding...

TIFFANY: Well, just (unintelligible) the sliding aside, I put money aside.

GEEWAX: That's...

TIFFANY: I mean, I'm 26, and I have a retirement fund.

(LAUGHTER)

GEEWAX: Yes. Well, that's a great idea.

TIFFANY: You know, so basically, the point is - and I do understand that education does get a lot of people pretty far, but the people in my position that make - you know, I don't make $400 a day now. I don't - I make - I mean, when I first started out, I made 400, $500 a week, you know?

NEARY: On the other hand, Tiffany, you're 26 and...

GEEWAX: Check back when you're 50.

NEARY: ...you're starting, you know, you're starting a new career, it sounds like. And you may be able to be upwardly mobile with that career, whereas you might not have been upwardly mobile if you stayed in the service industry. I get it.

TIFFANY: This is true.

NEARY: Let me ask her - Erin to respond to that. Thanks so much for you call, because you've raised some interesting point, which we don't really have time to address too much. But go ahead, if you can, Erin.

CURRIER: Well, one think I think Tiffany raised is this question of where economic mobility and economic security intersect. And so, you know, you can have a lot of income or not a lot of income. But what does that really mean in terms of your ability to pay your bills every day? One thing that our research has show is that only half of Americans exceed wealth. So, clearly, they're not as financial secure.

NEARY: Erin, thank you so much. Erin Currier is director of economic - the Economic Mobility Project at the Pew Charitable Trusts. Marilyn Geewax is a senior business editor for NPR News. And you're listening to TALK OF THE NATION, from NPR News. Transcript provided by NPR, Copyright NPR.