If you grew up in an upper-middle-class American family, there's a good chance that you are now doing worse than your parents. That is one of the findings of the big new study on economic mobility that has gotten so much attention this week.
Most of the buzz around the study has focused on its findings about upward mobility, and how hard it is for Americans born in modest circumstances to climb into the top fifth of earners. In contrast, the study shows that a great many of those born at the top, stay at the top.
But these headlines miss a crucial story about downward mobility that emerges if you dig into the report's data. While it's true that many born into affluent families end up doing well themselves, the reports shows that -- on average -- people born in the upper middle class or top 1 percent do less well than their parents.
This will hardly be news to many Gen Xers and Millennials who feel that replicating their parents' standard is an impossible lift. But the report's data does reveal the counterintuitive fact that while, on average, the kids of the working class move upward; the exact opposite is true for kids of the affluent, who move downward on average.
Consider the greater New York area, where I grew up. According to the study, the more money your parents make, the less likely you'll make the same amount. If your parents earned $75,000 -- placing them in the 61st percentile of earners -- you'll be in the 56 percentile, on average, a modest generational dip in fortunes. But if your parents made $130,000, placing them in the 87 percentile, you'll be in the 64th percentile, on average. That's a much bigger fall downward. But the biggest downward mobility on average is for kids born into the top 1 percent -- who end up, on average, in the 68th percentile, a full 31 percentile points below their parents. They are making less than a fourth of the money their parents made. In leading California metro areas, the fall is even further -- more like 40 points.
Now, the study also shows that the 36 percent of kids born into the top 1 percent in the New York area will end up in the top 20 percent of earners -- and that's the finding getting so much attention: wealth replicating wealth. But downward mobility is the actual fate, on average, for kids born at the top.
In contrast, if you grew up in the greater New York area in a household with an income of $10,000 (the very poor 5th percentile), you ended -- on average -- making $45,000, a huge generational leap up from your parents. If your parents made $25,000, you make on, average, twice that money -- also a big step up.
I don't want to make too much of these findings, because -- in the broader picture -- most affluent kids still end up pretty affuent even after they fall and a great many poor people still struggle even after they climb upward. Leaving the poverty of your parents behind is great, but living on $45,000 a year is a huge challenge in a place like New York.
Still, this startling new data about downward mobility for the upper middle class confirms a lot of what we at Demos -- and many others -- have been saying in recent years about the fate of young Americans. Whereas many older Americans grew up in a land of plenty, with lots of good middle class jobs, very low college tuition costs, and plentiful cheap housing, the experience of many Xers and Millennials has been very different: crappy service jobs amid de-industrialization, crushing student debt loads, and crazily high home costs -- especially in major metro area on the coasts.
You'd think that all this downward mobility would trigger some kind of serious political pushback. This hasn't really happened yet, but there's still time. Who knows, maybe the rising movement around student debt will be a turning point.