From 24/7 Wall St.: Seems as though the American Dream is just that — a dream. If you were born into a middle class family, there is a high chance that you’ll end up falling down the economic ladder into a lower class, according to a new report by the Pew Charitable Trusts. And while your parents profession or your race are a good predictor of where you’ll end up if you didn’t start in the middle class, they’re not very helpful if you were born into it. 24/7 Wall St. has reviewed a new report from Pew Charitable Trusts to identify the six traits that can contribute to a person’s likelihood of falling out of that economic group.
It is widely assumed that children will end up financially better than their parents. But “Downward Mobility from the Middle Class,” a study published by the Pew Charitable Trusts, reports that a staggering third of Americans raised in the middle class fall out of it as adults. The middle class is defined by Pew as those between the 30th and 70th percentiles of the income distribution, making below $110,600 and above $53,900.
The greatest predictor of a person’s class as an adult is the class of the parents, regardless of outside attributes such as race and education. Still, a large number of people born into the middle class eventually fall out of it.
There are a number of characteristics, including level of education, marital status, and other individual choices, that may make certain middle class people more likely to decline in relative economic standing.
24/7 Wall St. has reviewed the factors that contribute to a person’s likelihood of falling out of the middle class, according to the Pew Charitable Trusts. We have included the likelihood (in percentage points) of men and women who exhibit these factors to drop out of the middle class.
These are the six reasons Americans fall out of the middle class, according to 24/7 Wall St.