The Decline Of Upward Mobility In One Chart

Decline Upward Mobility

The Decline Of Upward Mobility In One Chart

For decades, a majority of Americans have been able to climb the economic ladder by earning higher incomes than their parents. These improving conditions are known as upward mobility, and form an important part of the American Dream.

However, each consecutive generation is finding it harder to make this ascent. In this graphic, we illustrate the decline in upward mobility over five decades using data from Opportunity Insights.

Understanding The Chart

This graphic plots the probability that a 30-year-old American has to outearn their parents (vertical axis) depending on their parent’s income percentile (horizontal axis). The 1st percentile represents America’s lowest earners, while the 99th percentile the richest.

As we move from left to right on the chart, the portion of people who outearn their parents takes a steep decline. This suggests that people born into upper class families are less likely to outearn their parents, regardless of generation.

The key takeaway, though, is that the starting point of this downward trend has shifted to the left. In other words, fewer people in the lower- and middle-classes are climbing the economic ladder.

Decade Born Chance of Outearning Parents (Bottom Percentile) Chance of Outearning Parents (50th Percentile) Chance of Outearning Parents (Top Income Percentile) 
1940 95% 93% 41%
1950 90% 81% 15%
1960 86% 62% 7%
1970 90% 59% 16%
1980 79% 45% 8%

Declines can be seen across the board, but those growing up in the middle-class (50th percentile) have taken the largest hit. Within this bracket, individuals born in 1980 have only a 45% chance of outearning their parents at age 30, compared to 93% for those born in 1940.

Stagnating Wage Growth a Culprit

One factor behind America’s deteriorating upward mobility is the sluggish pace at which wages have grown. For example, the average hourly wage in 1964, when converted to 2018 dollars, is $20.27. Compare this to $22.65, the average hourly wage in 2018. That represents a mere 11.7% increase over a span of 54 years.

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