Soaring inequality in America has been accompanied by a plummet in upward mobility since the early 1980s, with those who earn modest incomes in their first jobs likely to remain trapped in low-wage work for decades, a troubling paper concludes.
Published in May by economists Michael D. Carr and Emily E. Wiemers, who hail from the University of Massachusetts in Boston, the study is based on data from the Census Bureau’s Survey of Income and Program Participation and examines the years 1981 to 2008.
“Though increasing through much of the 20th century, we show that intragenerational mobility has been declining since the early 1980s across a variety of rank-based measures,” the scholars write. “Mobility has declined for both men and women and among workers of all levels of education, with the largest declines among college-educated workers. In the presence of increasing inequality, falling mobility implies that as the rungs of the ladder have moved father apart, moving between them has become more difficult.”
The paper, published by the Washington Center for Economic Growth, concludes that this decline is particularly pronounced for the so-called middle class.
“One striking feature is the decline in upward mobility among middle-class workers, even those with a college degree,” the scholars write. “Across the distribution of educational attainment, the likelihood of moving to the top deciles of the earnings distribution for workers who start their career in the middle of the earnings distribution has declined by approximately 20 percent since the early 1980s.”
“The probability of ending where you start has gone up, and the probability of moving up from where you start has gone down,” Carr told Atlantic reporter Alana Samuels.
Samuels explains, “For instance, the chance that someone starting in the bottom 10 percent would move above the 40th percentile decreased by 16 percent. The chance that someone starting in the middle of the earnings distribution would reach one of the top two earnings deciles decreased by 20 percent.”
The findings were followed by a report released earlier this month by the Economic Policy Institute, which found that, in 2015, CEOs in the largest U.S. companies an average of 276 times the annual pay of the average worker.
The report noted, “From 1978 to 2015, inflation-adjusted CEO compensation increased 940.9 percent, 73 percent faster than stock market growth and substantially greater than the painfully slow 10.3 percent growth in a typical worker’s annual compensation over the same period.”