Economic Mobility For African Americans May Be A Myth l Pew Report Finding

Economic Mobility For African Americans May Be A Myth, Pew Report Shows

The Huffington Post  |  By  Posted: 07/17/2012

Economic Mobility

The fine line between the American Dream and the African-American Dream is becoming more distinct, according to a recent report by the Pew Charitable Trusts, a nonprofit research organization.

The survey of economic mobility across generations compared the income and wealth of Americans with that of their parents at the same age, and it offered a promising outlook for most Americans — 84 percent to be exact — who were shown to have higher incomes than their parents, when adjusted for inflation.

African Americans, however, haven’t had the same success, with just 23 percent of blacks raised in the middle class surpassing their parents’ family wealth, compared to 56 percent of whites.

The study’s project manager, Erin Currier, said the results aren’t far off from what a simliar 2008 survey found. “With this newest update to the data, we can see that not much has changed with a few more years of data added in,” Currier told The Huffington Post. “Specifically, African Americans are much more likely than whites to be stuck at the bottom of the income ladder over a generation, and also at the bottom of the wealth ladder,” she said. They’re also more likely to fall from the middle.

Currier and her team analyzed income data over five years from the University of Michigan’s Panel Study of Income Dynamics (PSID), a nationally representative sample of more than 18,000 individuals living in 5,000 families in the United States. During the years they chose — 1967, ’68, ’69, ’70 and ’71 for the parents; 2000, ’02, ’04, ’06 and ’08 for their kids — both groups were at a common age (in their early to mid 40s) and at similar positions of marriage, income parity and post-secondary education, Currier said.

“It is the case that African-American families manage to get to the middle class and they have some sense of economic security, but their ability to pass that on to their kids is not as high as the white families,” she said.

And while this particular study didn’t delve into specific reasons for this gap, Currier pointed to previous research showing the impact neighborhood poverty has had on maintaining wealth disparities over time. “Two thirds of African-American children born between 1985 and 2000 are being raised in high poverty neighborhoods,” compared to just six percent of white children, Currier noted, proportions that haven’t shifted much over the last 30 years. “It isn’t the case that two thirds of African-American families are poor, but a lot of even middle-class African-American families are living in high poverty neighborhoods and research shows that, that environment in childhood increases a person’s chance of downward mobility by 52 percent,” she added.

A study published in May by the National Bureau of Economic Research may have hinted at one of the barriers to moving out of those poverty-stricken neighborhoods, revealing that black and Hispanic homebuyers pay as much as 3 percent more for their homes, regardless of their income, wealth or credit profiles.

Pew research has also examined the roles that marital status andincarceration have played in the black-white economic mobility gap in recent years. Meanwhile, others have looked at the roles of higher education and even differences by region. (Those with a college degree and those who live in the Northeast U.S. have a higher chance of moving up, researchers say.)

Since 2006, Currier and her team have set out to examine the health and status of the American Dream, which she says is more than a cliche, but rather a part of our national fabric based on the notion that your children can do better than you did.

“Our research shows a pretty mixed view of the degree to which that’s true,” she said. “On one hand, there has been significant economic growth over the last generation, [wealth that] has been broadly, equally shared. But at the same time, we see some lack of movement on the ladder as a whole.” So even though Gen Xers may have greater incomes than their parents did within a certain income bracket, they may not make enough to move to the next bracket up, Currier explained.

That finding contradicts what is said to be the crux of the American Dream, that all Americans have equality of opportunity regardless of their economic status at birth.

“A defining factor of the American dream is that a person’s family background or income has no bearing on where he or she ends up, but the study shows otherwise,” Currier said in an interview with the Poughkeepsie Journal.