If you’re born poor in America, you’re likely to end up that way. Born rich, it’s likely to stay that way. A new study by the Federal Reserve Bank of Cleveland confirms that achieving the American Dream may be growing harder. For many of the Ohioans who took a recent University of Akron Bliss Institute poll, the study confirms what their guts were already telling them this election season.
More than one-out-of-every-10 Ohioans who took the open-ended survey listed income inequality as one of the nation’s biggest issues. That’s more than those who picked trade alone, more – even – than those who picked jobs. And yet in many minds, the issues are all of one cloth.
The American Dream
Bill Carpenter is a 56-year-old accountant who works for a downtown Dayton bank.
“I think there’s plenty of jobs out there, but there’s not plenty of livable-wage jobs out there. Kids who are getting out of school now are having to work anywhere from $9 to $12 an hour with an undergraduate degree. That’s just terrible. That’s not what the American Dream was about.”
Carpenter says a global economy has led even professions like his to be outsourced overseas in search of cheaper labor, and he says that’s flat-lined American wages.
Bill Maxson of the Akron suburb of Norton says corporations shoulder the blame.
“They hog all the profits at everybody else’s expense for lower wages and people not even getting raises. So the standard of living is going down for people.”
Mobility and equality
A new study by the Federal Reserve Bank of Cleveland says both might be right – in part. But it may be more complicated.
The study affirms that income inequality is growing. It also looks at what’s called “income mobility.” To understand the difference, think snap shot vs. video.
Researcher Dan Carroll explains: “Income inequality compares two people or two households at the same time.”
Income mobility, on the other hand “says maybe you’re poor now or middle class now, but where are you likely to be at some point 10 years, 20 years later?”
He says for many people, the answer is pretty much: Where you started.
“It’s true that the possible income levels that people could be experiencing at this time is spreading out. At the same time, mobility has only risen modestly at least within your lifetime. And so the sense is that, in fact, it’s not that the same people are getting richer and poorer, but, for the most part, many of them are the same people.”
The research breaks Americans into fifths. The three fifths in the middle represent some level of middle class, and there’s some movement up and down within those. But about two thirds of those in the poorest block will still be there 10 years later. And nearly three-quarters of those at the top rung will remain there as well.
Your chance of jumping from the bottom to the top is miniscule.
Carroll notes the gap in equality may be increasing the gap in mobility as well. He points to a chart with Finland at one end of what’s called the “Great Gatsby Curve.”
“Countries that have less income inequality tend to be more mobile as well.”
At the other end -- with high inequality and little chance of moving between classes – is the United States.
Carroll says the reasons are deep and varied and decades in the making: Education, who you marry, what neighborhood you live in, even down to something like summer camp.
“Children who are in households with more means have access to summer camps and into training over the summer, where parents perhaps who don’t have as much means or have work obligations are unable to give their child that access so their child sits for three months without developing and when they come back to school, the gap’s widened.”
Carroll’s research partner, Anne Chen, says that magnifies over time.
“The workforce is polarizing. People with high skill tend to go around high skill jobs, people with low skill stay in low-skill jobs because the skills they have don’t transfer. And I think that’s a huge part in who you meet, how you ... form families and educate your children.”
Researchers aren’t the only ones interested in what’s happening to the middle class. So are politicians and the people they’re pitching their messages to.
Bob Harper heads United Steelworkers Local 1123 in Canton. Most of its roughly 1,900 members work at two companies, Timken Steel and Timken Company. That used to be one company and membership not so long ago topped 5,000.
Harper says it was often hard, dirty and dangerous work. But it also afforded people a middle-class life and a balance.
“The bottom line has gotten so out of line that the quality of life is gone. You used have that dream to work for a cabin or a boat or something. The money’s not there. It’s not easy to get; I gotta work harder to get it. ... The buying power’s gone.”
And that’s why economic concerns are expected to be the big driver for both the candidates and the voters who head to the polls this fall to pick a president.
Doug Livingston of he Akron Beacon Journal and Chris Stewart of the Dayton Daily News contributed to this story.
The news organizations working together on the Your Vote Ohio project will pursue ideas on how to improve the financial well-being of Ohioans. Here are two questions to consider. Email your response to firstname.lastname@example.org
1. If you were to advise a young person on how to achieve the American Dream in the current economy, what would you say?
2. What would you like the next president to do improve that person’s chances of success?
And on another topic, the Republican National Convention begins in Cleveland July 18.
What would you like to know about the convention so that you can better understand its role in the political process?
This is the first of three statewide polls and an intermittent series of stories exploring issues most important to Ohio voters. Newspapers and television and radio stations agreed to work together in 2016 to better represent
Ohioans in the election process through polling and shared resources, giving voters a voice and holding candidates accountable to voters’ concerns.
Stories produced as part of the collaborative effort bear the trademark “Your Vote Ohio” and are archived on the http://www.yourvoteohio.org web site. Conversation about the stories can be found on the Your Vote Ohio Facebook page. The first poll of 1,000 was conducted in April and May by the Center for Marketing and Opinion Research in Akron for the Bliss Institute of Applied Politics at the University of Akron. Over sampling on a regional basis continued into June.
The John S. and James L. Knight Foundation provided funding for the University of Akron poll and for social media engagement and public deliberation on the media and the people, convened by the non-partisan Jefferson Center.