Movin’ on up?

June 2, 2007
Posted by Jay Livingston

When I was in my thirties, it occurred to me that I was not earning nearly as much as my father had when he was my age. He had been, for much of his life, a successful businessman; I was an academic. Even in absolute dollars, his income thirty years earlier (he was about thirty years older than me) may have been higher than mine. Certainly in inflation-adjusted dollars, he had been much better off.

I was an example of “downward mobility,” something I’d almost never heard about, not even in my sociology classes. The phrase “social mobility” almost always carries an assumption that we move in only one direction – up. There’s a silent “upward” in front of the “social mobility.” We expect that children will do better or go farther than their parents did.

This expectation runs into a logical problem. If the pie remains the same size, and some people get a larger slice, others have to get a smaller slice. The only way for everyone’s slice to increase is if the pie is constantly getting larger. Or as President Reagan famously said, a rising tide lifts all boats. The pie metaphor works better, for what has happened in the last few decades is that the pie has gotten larger, but the slices for most of us have grown by a few bites while the slices of the wealthy, already large, have been supersized.

The middle class is slipping farther and farther behind the wealthy (and much farther behind the very wealthy). But beyond that, the last few years have also brought more downward mobility. (At least in this one area, I was way ahead of the curve.) On average, men in their 30s have not been doing as well as their parents at a similar age. The report by Isabel Sawhill and John Morton, mentioned in the previous post in this blog, compared the incomes of thirtysomethings a generation apart. Here are the results.

The men in their thirties in 1994 were earning just barely more than were men of their parents’ generation. But men in their thirties in 2004 were doing worse, and by a considerable amount – $35,000 compared with $40,200 for their fathers.

The good news is that despite this trend, family incomes in both periods were up.

The increase is not as great for today’s thirtysomethings as it was for those even ten years ago, but the trend is still up. What does it all mean – men’s incomes down, family incomes up? The obvious answer is that more women are working. Some women in their thirties have chosen to be in the paid labor force for reasons of career and self-fulfillment. But my guess is that most of these women are working because they have to – because the additional income they bring in is the only thing that allows their family to maintain middle-class status.

In earlier generations, American families had the luxury of being able to live on a single income. Now, a second or even third income in the family has become a necessity.