According to fresh research from the Pew Economic Mobility Project, middle-quintile children without college diplomas are more than half again as likely as adults to slide into the lowest 40 percent of income earners than are middle-class children who earned a college degree. They’re also twice as likely to fall backward in wealth. College graduates are four times as likely to rocket from poverty into the highest quintile of wealth. “Having a postsecondary education is incredibly important for mobility,” said Diana Elliot, research manager at Pew’s mobility project, and it has “become increasingly important” from one generation to the next.
For American children who aspire to the middle class, this reality highlights the road they need to take. But it can also be cruel, because poor children find it much harder today to finish college than wealthier ones do. “Children from rich families have much greater access to higher education than children from low-income families, even when controlling for innate skills,” Economic Policy Institute researchers concluded in a recent report. “This educational barrier places profound limits on income mobility.” And in the tattered recovery from the Great Recession, wages even for college graduates have stagnated. Meritocracy is not only a solution to restoring upward mobility but also a way to fortify the bastions of privilege.
THE WAY THINGS WERE
Only twice in U.S. history—in the heyday of the Western frontier and in the post-World War II prosperity—have Americans found it easy to rise. This isn’t one of those times. Middle-skill jobs (read: no college required) are disappearing from America’s sputtering economic engine—in factories, in back offices, even lately in state and local governments. For generations, these jobs were the ticket to a comfortable life for Americans who went directly from high school to work. But increasingly in recent decades, economic research shows, lower-wage workers in foreign lands have taken these jobs or automation has rendered them unnecessary. Today, job growth occurs mainly at the poles of the skills spectrum—in sweeping floors or flipping burgers, which can’t be outsourced, or in sophisticated engineering jobs that drive new industries.
Since 1980, the very lowest- and highest-skill jobs in the United States have each grown sharply as a share of the overall workforce, according to research published last spring by economists David Autor of the Massachusetts Institute of Technology and David Dorn of Spain’s Centro de Estudios Monetarios y Financieros. Meanwhile, the share of lower-middle-skill jobs has shrunk: For example, machine operators and assemblers, a classic storehouse of middle-skill jobs, fell from 13 percent of the workforce in 1950 to 4 percent in 2005. Real hourly wages have stagnated, simply as a matter of supply and demand. When too many workers compete for too few jobs, employers can hire qualified people at lower pay.
“The real question of the [displaced] middle class is: Where do they go?” asked Mark Doms, the chief economist at the Commerce Department’s Economics and Statistics Administration. “Only a few of them are going to go to the tippy-top”—the highest-skilled jobs. “The rest will go to the bottom.”
The Sherry family has learned this lesson all too well. Greg Sherry grew up in East Denver, moved to suburban Wheat Ridge in high school, and graduated without much thought of college. His parents never pushed it. His ambition never demanded it. “I liked working with my hands, and I wanted to do something like that,” he says. “I saw college as a white-collar-type job, and I wasn’t interested.”
The world Greg graduated into didn’t require an advanced degree. He could earn nearly $20 an hour in today’s dollars—a wage that could support a family—by working construction or in a warehouse. Across the country, high school graduates could claim their diplomas and walk straight into secure, well-paying, benefit-laden, pension-bearing jobs on assembly lines or, in Colorado, harvesting trees or rare earth metals. Foreign competition was a speck on the horizon; outsourcing wasn’t yet a dirty word.
Greg worked construction jobs from 1971 to 1973, building houses for a developer near the Cherry Creek Reservoir. Then the economy dipped and mortgage rates spiked; homebuilding slammed to a halt. Greg lost his job. With his new bride, Beth, he hopped around seeking work, first in Dallas, then in Denver, and finally across the Rockies to Grand Junction, where his father-in-law, a Union Pacific worker, had found Greg a railroad job. Beth, now 57, took a hygienist’s position in a dentist’s office, where she still works today.
The railroad paid $5 an hour, the 1974 equivalent of about $23 an hour ($48,000 a year) today. It came with health benefits he didn’t even think about for years and a pension that will let him retire at age 60 with health insurance for life. After a few years, Greg had worked his way up to an engineer’s position, driving trains on round trips of several hundred miles on a brutally unpredictable schedule. The Sherrys’ children, firstborn Allison and John, grew up knowing their father could be called onto the rails with two hours’ notice, day or night.
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