Category Archives: Middle Class

Americans Aren’t So Optimistic About Economic Mobility

Source: James Devitt, Futurity, June 25, 2019

Americans overestimate the future income for children from wealthy and middle-income families, but underestimate that of children from poor ones, according to a new study.

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Americans overestimate the intergenerational persistence in income ranks
Source: Siwei Cheng and Fangqi Wen, Proceedings of the National Academy of Sciences (PNAS), first published June 24, 2019
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Significance
Intergenerational mobility indicates the openness within a society. The question of how Americans think about socioeconomic mobility prospects is drawing growing attention from scholars and policy makers. Our study proposes a survey instrument that connects the empirical literature on patterns of mobility with the literature on the public perceptions of mobility. With large-scale, population-representative data, we show that Americans overestimate the intergenerational persistence in income ranks. That is, they tend to see greater inequality of economic prospects between children from rich and poor families. These results highlight the need for policy and political solutions that seriously engage with Americans’ concerns about the equality of opportunity in the society.

Abstract
Recent research suggests that intergenerational income mobility has remained low and stable in America, but popular discourse routinely assumes that Americans are optimistic about mobility prospects in society. Examining these 2 seemingly contradictory observations requires a careful measurement of the public’s perceptions of mobility. Unlike most previous work that measures perceptions about mobility outcomes for the overall population or certain subgroups, we propose a survey instrument that emphasizes the variation in perceived mobility prospects for hypothetical children across parent income ranks. Based on this survey instrument, we derive the perceived relationship between the income ranks of parents and children, which can then be compared against the actual rank–rank relationship reported by empirical work based on tax data. We fielded this instrument in a general population survey experiment (n = 3,077). Our results suggest that Americans overestimate the intergenerational persistence in income ranks. They overestimate economic prospects for children from rich families and underestimate economic prospects for those from poor families.

State of the Union: Millennial Dilemma

Source: Stanford Center on Poverty and Inequality, May 2019

The annual Poverty and Inequality Report provides a unified analysis that brings together evidence across such issues as poverty, employment, income inequality, health inequality, economic mobility, and educational access to allow for a comprehensive assessment of where the country stands. In this year’s issue, the country’s leading experts provide the latest evidence on how millennials are faring.

Contents include:

Executive Summary
David B. Grusky, Marybeth Mattingly, Charles Varner, and Stephanie Garlow
With each new generation, there’s inevitably much angst and hand-wringing, but never have we worried as much as we worry about millennials. We review the evidence on whether all that worrying is warranted.

Racial and Gender Identities
Sasha Shen Johfre and Aliya Saperstein
The usual stereotypes have it that millennials are embracing a more diverse and unconventional set of racial and gender identities. Are those stereotypes on the mark?

Student Debt
Susan Dynarski
Often tagged the “student debt generation,” millennials took out more student loans, took out larger student loans, and defaulted more frequently. Here’s a step-by-step accounting of how we let this happen.

Employment
Harry J. Holzer
Labor force activity has declined especially rapidly among young workers. The good news: We know how to take on this problem.

Criminal Justice
Bruce Western and Jessica Simes
The imprisonment rate has fallen especially rapidly among black men. Does this much-vaunted trend conceal as much as it reveals?

Education
Florencia Torche and Amy L. Johnson
The payoff to a college degree is as high for millennials as it’s ever been. But it’s partly because millennials who don’t go to college are getting hammered in the labor market.

Income and Earnings
Christine Percheski
When millennials entered the labor market during the Great Recession and its aftermath, there were uniformly gloomy predictions about their fate. Does the evidence bear out such gloomy predictions?

Social Mobility
Michael Hout
Millennials have a mobility problem. And it’s partly because the economy is no longer delivering a steady increase in high-status jobs.

Occupational Segregation
Kim A. Weeden
Are millennial women and men working side by side in the new economy? Or are their occupations just as gender-segregated as ever?

Poverty and the Safety Net
Marybeth Mattingly, Christopher Wimer, Sophie Collyer and Luke Aylward
Millennial poverty rates at age 30 are no higher than those of Gen Xers at the same age. But this stability hides a problem: Millennials are replacing a falloff in earnings with large increases in government assistance programs.

Housing
Darrick Hamilton and Christopher Famighetti
Housing reforms during the civil rights era helped to narrow the white-black homeownership gap. But those gains have now been completely lost … and the racial gap in young-adult homeownership is larger for millennials than for any generation in the past century.

Social Networks
Mario L. Small and Maleah Fekete
Millennials are not replacing face-to-face networks with online ones. Rather, they’re a generation that’s found a way to do it all, forging new online ties while also maintaining the usual face-to-face ones.

Health
Mark Duggan and Jackie Li
It might be thought that, for all their labor market woes, at least millennials now have health care and better health. How does this story fall short?

Policy
Sheldon Danziger
A comprehensive policy agenda that could help millennials … and other generations too.

Forget Your Middle-Class Dreams

Source: Alex N. Press, Jacobin, March 29, 2019

When it comes to workplace organizing, there’s no such thing as a “privileged” worker. You’re either with your coworkers or you’re against them. …..

….. Although the argument — unions are good, but they’re not for us, and, somehow, us unionizing undermines unions — is unusually explicit, it’s not an unheard-of objection in white-collar organizing drives. During such campaigns, this concern is sometimes voiced by well-meaning people — those earnestly raising it do so because they believe the conditions of life at the bottom of society are unacceptable. But unions, so the thinking goes in this country where caricatures of the working class run rampant, are for those at the lowest rungs of the socioeconomic ladder — they’re for factory workers; for manual laborers; maybe they’re for low-wage service workers. But teachers, engineers, graduate students, journalists? Those are middle-class jobs. Surely, such workers should be grateful not to be down there, in the muck of poverty. In fact, it’d be greedy to want more than they have. Who are they to claim the mantle of working class? Unfortunately, this perspective has one, and only one, practical effect: keeping people from throwing their cards in with the working class, from demanding better lives and a seat at the table. …..

Under Pressure: The Squeezed Middle Class

Source: Organisation for Economic Cooperation and Development (OECD), ISBN 9789264150348 (PDF),April 2019

From the abstract:
Middle-class households feel left behind and have questioned the benefits of economic globalisation. In many OECD countries, middle incomes have grown less than the average and in some they have not grown at all. Technology has automated several middle-skilled jobs that used to be carried out by middle-class workers a few decades ago. The costs of some goods and services such as housing, which are essential for a middle-class lifestyle, have risen faster than earnings and overall inflation. Faced with this, middle classes have reduced their ability to save and in some cases have fallen into debt. This report sheds light on the multiple pressures on the middle class. It analyses the trends of middle-income households through dimensions such as labour occupation, consumption, wealth and debt, as well as perceptions and social attitudes. It also discusses policy initiatives to address the concerns raised by the middle class, by protecting middle-class living standards and financial security in the face of economic challenges.

The Cost of Employer Insurance Is a Growing Burden for Middle-Income Families

Source: Sara R. Collins and David C. Radley, Commonwealth Fund, December 7, 2018

Recent national surveys show health care costs are a top concern in U.S. households. While the Affordable Care Act’s marketplaces receive a lot of media and political attention, the truth is that far more Americans get their coverage through employers. In 2017, more than half (56%) of people under age 65 — about 152 million people — had insurance through an employer, either their own or a family member’s. In contrast, only 9 percent had a plan purchased on the individual market, including the marketplaces.

In this brief, we use the latest data from the federal Medical Expenditure Panel Survey–Insurance Component (MEPS–IC) to examine trends in employer premiums at the state level to see how much workers and their families are paying for their employer coverage in terms of premium contributions and deductibles. We examine the size of these costs relative to income for those at the midrange of income distribution. The MEPS–IC is the most comprehensive national survey of U.S. employer health plans. It surveyed more than 40,000 business establishments in 2017, with an overall response rate of 65.8 percent…..

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Data Brief
State Profiles
Press Release

Mapping Interface Provides Neighborhood-Level Information on Children’s Outcomes

Source: U.S. Census Bureau, Release Number CB18-TPS.48, October 1, 2018

The U.S. Census Bureau, in collaboration with Raj Chetty and Nathan Hendren from Harvard University and John Friedman from Brown University, released new research and a mapping interface that looks at children’s outcomes in adulthood. The Opportunity Atlas estimates children’s earnings distributions, incarceration rates, and other outcomes in adulthood by parental income, race and gender for every census tract in the United States. Users can view data, overlay their own data points of interest, and export into a data set for analysis.

Income data from the Census may not tell full story on middle-class trends

Source: Gary Burtless and Christopher Pulliam, Brookings Institution, Up Front, September 17, 2018

…. The resulting news stories deserve our attention, but it is important to keep a vital question in mind: Does the CPS give us an accurate picture of household incomes?

In many recent years, the answer has been “No.” Compared to the national income and product accounts (NIPA) produced by the Bureau of Economic Analysis (BEA), the CPS often gives us a strikingly different picture of the recent trend in household income. ….

Child Care Expenses Make Middle-Class Incomes Hard to Reach

Source: Robert Paul Hartley, Beth Mattingly, Christopher T. Wimer, Carsey School of Public Policy at the University of New Hampshire, August 2018

From the press release:
About nine percent of working families with children under the age of six are pushed out of the middle class as a result of their child care expenses, according to new research released by the Carsey School of Public Policy at the University of New Hampshire.

The researchers also found that many middle-class families do not pay any out-of-pocket child care expenses, perhaps by relying on family and friends, or by turning to lower-cost, less-qualified care. If all middle-class working families with young children were to pay what typical upper-middle and middle-class families pay for child care, roughly $6,900 per year on average, an additional 21 percent would be pushed below the middle-class threshold….

Prosperity Now Scorecard

Source: Prosperity Now Scorecard, 2018

The Prosperity Now Scorecard is a comprehensive resource featuring data on family financial health and policy recommendations to help put all U.S. households on a path to prosperity. The Scorecard equips advocates, policymakers and practitioners with national, state, and local data to jump-start a conversation about solutions and policies that put households on stronger financial footing across five issue areas: Financial Assets & Income, Businesses & Jobs, Homeownership & Housing, Health Care and Education.

The Scorecard assesses all states on their relative ability to provide opportunities for residents to build and retain financial stability and wealth. The state outcome rankings are a measure of financial prosperity and how that prosperity is shared and safeguarded. The Scorecard ranks the 50 states and the District of Columbia on 62 outcome measures in the five Issue Areas. Data for an additional four measures are published, but states are not ranked on these measures due to insufficient data at the state level. The overall state outcome rank is determined by the rankings each state receives for outcome measures within each issue area. The issue area grades in the Scorecard are distributed on a curve, based on how each state fares compared with all other states.

The Scorecard also separately assesses states on the strength of 53 policies to expand economic opportunity. Taken together, these 53 policies provide a comprehensive view of what states can do to help residents build and protect wealth in the issue areas described above. Unlike the outcome measures, the strength of states’ policies are assessed based on fixed criteria arrived at through consultation with issue experts and Prosperity Now’s own knowledge of policies that are promising, proven or effective in helping families build and protect financial stability and wealth.

In addition to the outcome and policy measures used to assess states, the Scorecard provides additional data to understand financial stability and prosperity in states and communities. For 44 outcome measures, trend data are available for states to track progress over time. The Scorecard also allows you to drill down to the local level—city, county, Congressional district, tribal area and metro area—on up to 26 measures. Additionally, for 21 outcome measures at the state level and 11 at the local level, the Scorecard includes outcome measure estimates disaggregated by race and ethnicity. The Scorecard also disaggregates 14 outcome measures at the state level by disability status, providing for the first time in 2018 a glimpse into the financial challenges facing people with disabilities. While these additional data do not factor into a state’s overall performance in the Scorecard, we provide the data to allow for a more meaningful analysis of financial security and stability in the United States.

Related:
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Custom reports
Methodology

Out of Reach 2018

Source: Andrew Aurand, Dan Emmanuel, Diane Yentel, Ellen Errico, Jared Gaby-Biegel, Emma Kerr, National Low Income Housing Coalition, June 2018

From the press release:
…. The Out of Reach report shows the Housing Wage for every state, metropolitan area, and county in the country. The Housing Wage is the hourly wage a full-time worker must earn to afford a modest rental home without spending more than 30% of his or her income on housing costs. The report compares the Housing Wage to average renter wages and minimum wages, as well as wages in the fast-growing occupations, nationally. The report also shows how many hours an individual must work each week for all 52 weeks per year at the prevailing minimum wage to afford a modest one- and two-bedroom apartment at the Fair Market Rent. Out of Reach 2018 also provides Housing Wages for ZIP codes in metropolitan areas. ….

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