Category Archives: Middle Class

Mobility, Inequality, and Beliefs About Distribution and Redistribution

Source: George Wilson, Vincent Roscigno, Carsten Sauer, Nick Petersen, Social Forces, Advance Access, May 10, 2021
(subscription required)

From the abstract:
Classic theory has long been interested in mobility, but with limited attention to the implications of intergenerational movement for inequality-specific beliefs. In this article, we introduce a dynamic conception and modeling of the impact of intergenerational occupational mobility on inequality orientations generally and distributive and redistributive beliefs in particular. The diagonal models we employ using 2008–2010 General Social Survey samples—modeling that considers intergenerational occupational origin and destination, and that is replicated on a larger sample across three waves of the GSS—reveal strong conservatizing effects of mobility overall. Those who occupationally fall relative to their parents, although somewhat more progressive by virtue of the downward mobility experience, tend to cling more so to the conservative beliefs characteristic of their higher status origins. Those experiencing mobility gains, in contrast, usually adopt the more conservative orientations of those who they are now surrounded by and in ways that legitimize individual efforts. These patterns are notably pronounced compared to other aspects of one’s job, political affiliation, and status-related attributes; are somewhat stronger among men than women; and differ significantly for Blacks. We elaborate and conclude by highlighting the need for a mobility-centered corrective to sociological understandings of inequality beliefs and how workplace-related experiences in particular shape ideological leanings.

Public Sector Unions Mean Middle-Class Jobs for Black Workers

Source: Hayley Brown, Dean Baker, CEPR, February 25, 2021

Government jobs have been an important source of economic mobility for Black workers and their families for many years. The federal government was an early adopter of anti-discrimination provisions, and today about a fifth of federal workers are Black. This includes those employed by the United States Postal Service, which provided well-paying jobs and career pathways to formerly enslaved people well before the rest of government, and in 2020 employed just under a fifth of Black federal workers. State and local governments have similarly emerged as wellsprings of relatively stable and well-paying employment for Black workers and pensions for Black retirees. The public sector’s legacy as a path to the middle class for the Black community persists today; government workers are disproportionately Black, and the pay gap between Black workers and white workers is smaller in the public sector than in the private sector.

The public sector is also an important source of union jobs for Black workers. Our analysis of 2020 data from the Current Population Survey Outgoing Rotation Group indicates that the unionization rate for Black workers in the public sector is quadruple the unionization rate for Black workers in the private sector, and unionized public sector workers account for a larger share of the Black workforce than they do of the white workforce. This matters because research has shown that Black workers who are members of a union or covered by a union contract enjoy considerable earnings and benefit advantages compared to their nonunion counterparts.

Public Work Provides Economic Security for Black Families and Communities

Source: Michael Madowitz, Anne Price, and Christian E. Weller, Center for American Progress, October 23, 2020

….
Public sector jobs provide economic security for Black households

Public jobs provide good wages, better benefits, and greater job security, all of which are critical components of economic security and help families build wealth. Moreover, the wealth gap in the public sector is much smaller. For example, in the private sector, white households have as much as $10 of wealth for each $1 Black households hold; in the public sector white households hold closer to $2 for every $1 of wealth for Black families.

Public employment can provide greater economic security for Black workers for several reasons:

  • Public sector hiring is more accountable to citizen influence than private sector hiring, providing stronger checks on employment discrimination.
  • Public sector jobs are more likely to provide a defined benefit pension, which guarantees lifetime benefits upon retirement.
  • Public sector jobs offer more stable employment, providing economic security otherwise available only to households with wealth.
  • Public sector jobs are more likely to be unionized. Unionized jobs are highly beneficial to workers, and Black workers in particular.

Opportunity, policy, and the future of automation

Source: Marcus Casey and Ashleigh Maciolek, Brookings Institution, December 21, 2020

Despite persistent fears that robots and computers are coming for our jobs, most labor market experts agree that fears (or hopes) for a future where work will be optional, or worse, extremely scarce due to technological change are unlikely. In rare instances, such as the elevator operator, jobs will be rendered completely obsolete. Most jobs, however, will still exist even if fundamentally changed in both task content and form. Technological change will create new tasks and jobs as well.

The productivity and efficiency gains of technological change will be a net positive for society. However, this does not mean we have no reason for concern. First, the availability of work for all who seek it is a precondition for a prosperous and equitable society. Advances in automation and AI have the potential to magnify many of the challenges currently facing our society: income and wealth inequality, concentration of corporate power, reduced upward mobility, and persistent disability, gender, and racial discrimination. Mitigating potential negative tradeoffs of technological change will require new public policy paradigms to ensure that the most at-risk segments of the population are not left even further behind.

To that end, the Future of the Middle Class Initiative at Brookings hosted an event exploring these topics. A two-part panel first considered the role and design of social insurance programs and second, discussed how to foster social mobility and ensure equity of opportunity in the face of automation. The panelists identified key public policy challenges in a technology-driven economy and offered potential non-incremental solutions to best support low and middle-income Americans.

Incentivizing the Missing Middle: The Role of Economic Development Policy

Source: Carlianne Patrick, Heather M. Stephens, Economic Development Quarterly, OnlineFirst, Published February 28, 2020
(subscription required)

From the abstract:
The shrinking middle class and increasing income polarization in the United States are issues of concern to policy makers and others. Economic development incentives are a key policy tool used at the state and local levels to promote local economic growth, and, presumably, provide employment opportunities. However, these incentives may have unintended consequences that may be contributing to the decline of the middle class. The authors combine detailed industry-level detail on incentives with proprietary county-level industry employment data and two methods for defining middle-class industries. Using an instrumental variable approach, the authors estimate how differential economic development policies affect middle-class jobs. The authors find evidence that incentivizing creative-class and high-wage industries may be contributing to the hollowing out of the middle class. Without hurting employment in other industries, targeting working-class and middle-wage industries alleviates this trend, while reducing incentives on creative-class and high-wage industries could help increase working and middle-class employment.

The United States Prosperity Index 2019

Source: Legatum Institute, 2019

From the introduction:
A new United States Prosperity Index (USPI), published by the Legatum Institute, reveals that prosperity has increased across America over the last 10 years and the gap between the most and least prosperous states is narrowing.

The USPI is the first comprehensive assessment of all aspects of prosperity across America, allowing comparison between the different states and regions. It measures the extent to which all 50 states plus Washington, D.C. have open economies, inclusive societies and empowered people.

The research shows that Washington, D.C. saw the greatest increase in prosperity in the last decade, followed by California and South Carolina. Only four states – Alaska, Louisiana, North Dakota and South Dakota – saw a decline in prosperity. Improvements in health, education and living conditions all contributed to the increase in prosperity. In addition, the majority of states have enhanced the quality of their economy as they have recovered from the financial crisis. While Mississippi is the least prosperous state, its prosperity has improved more than that of top-ranked Massachusetts in the last 10 years.

These 3 Policy Failures Are Killing the American Dream

Source: Eric Levitz, New York Magazine, October 7, 2019

….After reading the Times’ report and other recent analyses of our postindustrial discontents, I’ve come to think that the decline of America’s middle class can be attributed to three distinct (though related) policy failures. Namely, the failures to sustain American labor’s bargaining power; to contain rent-seeking in the housing, health-care, and higher-education sectors; and to update (and expand) the social-welfare state for the 21st-century economy.

Related:
The Middle-Class Crunch: A Look at 4 Family Budgets
Source: Tara Siegel Bernard and Karl Russell, New York Times, October 3, 2019

Most Americans think of themselves as middle class. For many, the line between a stable life and a fragile one is thinning. ….

Moving Upward and Onward: Income Mobility at Historically Black Colleges and Universities

Source: Rutgers Center for Minority Serving Institutions (CMSI), September 2019

From the press release:
More students experience upward mobility at Historically Black Colleges and Universities (HBCUs) than Predominantly White Institutions (PWIs) asserts a new report published by the Rutgers Center for Minority Serving Institutions (CMSI). The report entitled, Moving Upward and Onward: Income Mobility at Historically Black Colleges and Universities, examines the intergenerational income mobility of recent HBCU graduates and explores upward mobility variations and economic stratification based on institution type.

The report begins with a foreword by Dillard University President Walter Kimbrough, which provides an important narrative on how HBCUs have routinely supported low-income and Pell Grant-eligible students. Kimbrough situates the value of these storied institutions within the historical context of higher education. According to the report, HBCUs enroll far more low-income students than PWIs. More specifically, the report claims that nearly one-quarter of HBCU students are low-income and more than half of all HBCU students come from households in the bottom 40% of the U.S. income distribution.

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.

Related:
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
(subscription required)

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.