11/21/2011 11:07 AM ET|
Many falling out of the middle class
More than a quarter of those in a long-term study fail to maintain the economic status of their parents, and the pain isn't spread evenly.
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 from high school, for instance, greatly increased the chance that someone would 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 in the study fell out of the middle class (defined as those making from the 30th to the 70th percentile of U.S. income distribution), a whopping 38% of black men who grew up in the middle class wound up slipping down the ladder. The report found that much of this gap can be explained by existing differences between the two groups, including standardized test scores and environmental factors such as the occupational status of their fathers.
Less explainable are the differences between genders. While women of all races were equally likely to lose their middle-class status, white women were much more likely than white men to fall out of the middle class -- 30% of white women move down the economic ladder, 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 tended to come out worse: Divorced women were 38 percentage points more likely than average to find themselves falling below the middle-class threshold. And never getting married also increased the odds of downward mobility, especially among 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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Work hard, be smart, get ahead. That is the mantra of the American Dream. The problem is, the dream is broken. Wealth is concentrating at the top in an alarming fashion. I am not talking the professional who makes 150 to 250K a year as the "top". Such people, while comfortable, are paupers. I am talking the billionaires who get away with paying a lower tax rate than the middle class.
Tax the rich, but tax the right ones and do it in the right way. Paying 15% tax on dividends when one is in that realm of wealth is ridiculous. Of course, such people contribute the most to political campaigns. The politicians know who butters their bread.
We effectively have a pay for access government at this point.
PS, I have a bridge to sell you.
...Sell it to Sarah Palin.
I agree the title is misleading, it would be more relevant to see how many people who were Middle Class have fallen out of it. It's been documented in articles for quite a few years now that Middle Class income/wealth has deteriorated, while that of the Upper Class has materially increased, so I would suspect that more have gone down than up. This began about 20 years ago, and I believe many in the Middle Class maintained their standard of living by supplanting decreased income with increased use of debt (credit cards, home equity). Well, it all hit a brick wall starting in 2007, they were all tapped out. China's rise as an economic power and the rapid increase in their Middle Class is no coincidence. Unless our Middle Class makes a comeback, our economy never will. Scary, isn't it.
So we have many people saying many things so here is my take. The American and International banks are given money at 0% interest by the American Federal Reserve. If you have been paying attention between 2007 and July 2011 they gave away $16 TRILLION. this caused the OWS movement. The fed calls this Quantitative Easing one and two. Nicknamed QE I and QE II. Cute.
Why not say what it is? Giving money to the people that run the banks that are failing for free to refill their personal bank accounts. 0% interest means they get it and pay no interest. Get it? They deserve the money for free and you do not.
Then with our Legislatures , The Congress and The Senate sell what is called "None Public Information". This is information they are priveledged to because they pass the Laws.
So here is an example. Lets say you are a Congressperson working with a Committe on Military Appropriations like aircraft. You know that company X is going to get the contract. You cannot sell this information for cash but you can personally invest. Also you can have a political meeting and speak in front of a Hedge Fund and tell them this information and in return they give you 100,000 shares of company X at lets say $10 a share. Within one week the contract is announced and your 10 dollar shares go up to 90 dollars and split. Sweet.
This is all perfectly legal.
So the hedge Fund operators get legal insider trading information all the time through this method. They hire people that are not lobbyists but have a job going around offering stocks for 'non-public information" . Which your members of the Federal Legislature are very willing to give. This is just one example there are many,many more ways to legally do insider trading through the Federal Legislature. Ever wonder how our elected memebers of the Federal Legislature get so rich? Now you know.
So the rich get richer because they know how to access your tax dollars legally.
So go out and work a job. Even a good job. You can end up in the poverty class at anytime because the system is built to take the workers money.
I used to be an Engineer for the 45th Space Wing and worked very hard all my life. I lost my home and all of my investments because I was not priveledged to the inside information.
So keep telling your neighbor to look in the mirror and blame themselves because they failed.
Some day you will be deceived and fail also then the high horse you are riding will turn out to be an ****.
It's a systemic problem that can't be diagnosed or cured in a single paragraph. But I think the two most significant contributors to this trend in downward mobility are:
1. The lack of high paying manufacturing jobs that created the middle class. These jobs were created by a post WWII boom and should be seen as a short lived anomaly in American history. They disappeared thanks to Union Power and a lazy workforce that felt entitled to reap more than it contributed.
2. A culture of child worship that caused a generation of parents to reward and praise their children regardless of effort and more importantly, RESULTS. The product was children that grew into adults that did not understand the value of hard work and education. The virtue of patience and delayed gratification died, only to be replaced with a hunger to mortgage the future, at an incredible cost, to briefly benefit today.
The United States of America is still the land of opportunity. The recipe for success is as simple as it has ever been, however the ingredients are a in short supply: Education, Hard Work, and simple and specific Goal Setting.
Pretty easy to understand why people are falling out of the middle class. Secret loans to the bank, exempt Congress that pass bad laws, aid to every one in the world, rampant spending on junk and bonuses to to CEOs that equal the national debt and guess who has to pay for it all.
The middle class lose their jobs, houses and savings in the payment of the above.
After the 60s 2/3s of the people that label themselves as middle class are not really middle class, they just got convinced (fooled) that by getting deep in depth to the creditors and buying fancy useless material things they are middle class.
30% of the USA are NOT millionaires... just do the math... 30% of the American population is about 90 million people... if they all earned a million dollars a year, that would be:
$1M x 90M people = $90 TRILLION
now...the average federal tax for a millionaire is more than 30%... and so this would mean that those 30% would pay $27 TRILLION in taxes PER YEAR... which would solve the national debt problem pretty easily... and this doesn't even factor that a percentage of millionaires make much more than a million dollars a year (for example, billionaires like warren buffet), or even factor in the supposed other 70% of the population!!!!
so you 30% number is bogus and made up...
i believe a closer to the truth statistic is that only 1% of the American population makes $200K of more a year... and that 1% of the population makes something like 40% of all the income... so do you think they deserve more tax breaks? does it make sense to you that rich people get that way by taking their profits and hiring more people, even if they don't need them?
How many have moved from being poor to the middle class? How many people in the middle class moved up to upper middle class or higher? That's really funny.
PS, I have a bridge to sell you.
Unions and collective bargaining are an effective force to help combat the inequality of income, the inequality of wealth and the continual concentration of the wealth into a smaller and smaller segment at the very top of our society. The propaganda machine of the ultra-rich and their politically powerful friends have the goal of deceiving the American people into believing unions are the issue. Every union the right wingers can weaken or destroy aids and abets the concentrating of more and more wealth into fewer & fewer hands.
If one does some research into this matter, it becomes apparent that the workers of the U.S., union and nonunion, have benefitted greatly from the efforts of unions and collective bargaining over the years. United States labor unions have achieved these accomplishments for ALL workers, union and nonunion.
•End child labor
•Establish the legal right of workers to form unions and collectively bargain for wages, benefits and working conditions
•Establish the 8 hour work day and paid overtime
•Win workers' comp benefits for workers injured on the job
•Secure unemployment insurance for workers who lose their jobs
•Secure a guaranteed minimum wage
•Improve workplace safety and reduce on the job fatalities
•Win pensions for workers
•Win health care insurance for workers
•Win paid sick leave, vacations, and holidays as standard benefits for most workers
•Win the right for public sector workers to collectively bargain
•Win passage of the Civil Right Acts and Title VII which outlaws job discrimination based on race, color, religion, sex or national origin
•Win passage of the Occupational Safety and Health Act
•Win passage of the Family Medical Leave Act
Here's the problem (one of many). The rich politicians want the poor people to have a better life... free lunch at school, free apartments(section 8), free medical, etc. etc. BUT they don't want to pay for it themselves so they taxed the middle class to pay for these things. Now that the middle class is disolving because the jobs are no longer abundant and we can't even pay our own bills let.
So the answer is to buy bullets because when the rest of the middle class is wiped out and no one is avaliable to pay for the poor peoples needs there will be a revolt.
Rich verses poor ... only the future will tell who wins
Having nothing much to lose is a kind of freedom I suppose.
Then again, the disproportionate sales of lottery tickets to that group of people indicates that they would really rather not be there, either.
To add to that, the decline in unions also follow the same decline and stagnation in wages and earning brackets. This correlation shows that the decline of unions has actually hurt most people than helped. So people mad at unions, are barking at the very thing that provided for a middle class in the first place. And it all goes back to greed. The union haters are greedy and think someday they'll be at the top. Greed, it feeds on itself. Until people can stop with that mentality unions and everyone elses wages will cotinue to drop, and those same benefits such as 8 hour work weeks or 15 minute breaks every 3 hours of work, or even safe place to work, over time will all be a distant dream.
After reading some comments - there are many naiive or just plain stupid people. Many will claim you can't compare the 70's and 80's era to the present, however the standard of living then is much better than today!! Since I am from this era, I know what I am talking about. In this era you did not need a college education for decent wages.
Back then when you graduated high school many followed the paths of the; military, college or entered the work force. Most jobs in manufacturing started at the $6.00 per hour plus range which at the time minimum wage was $2.90! You may notice this is a little over double. Most of these Fortune 500 Companies also offered pension plans which in most cases was 40% of your final wages.
These same companies also offered performance bonuses, and this was for both blue and white collar employees! ((As a matter of fact I have many relations that retired from these and living a good standard of living - with their pension and soc sec check, and never went to college.....)) In most cases being retired and receiving almost $3k per month and never went to college. Of course there are those that went to college that frequently travel and you can only guess....
Back in this era most 30 year wage earners fell into the middle class category! In this era many would take their bonuses and purchase; furniture, car, home improvement, etc! Most 30 year wage earners also earned 40k plus year!!!
Living expenses in that era - a typical 1 bdrm apartment rented for $300 per month. For most blue collar workers one weeks pay covered this!! Even a janitor that mantained the same job for 30 years with raises earned $13-$14 per hour!! The typical blue collar worker TODAY can't claim this! Blue collar workers today are performing the one time teenager designated job; paper routes, cashiers, gas attendant, retail sales, etc!!
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