It’s clear that income inequality has been skyrocketing in the United States, and that it is stifling the American dream of equal opportunity for all citizens, regardless of class or race. This trend is confirmed by a new study from the Pew Charitable Trusts, which looks at the “most current estimates of mobility and the first estimates that overlap with the recession.”
The Pew researchers found striking increases in wealth for the wealthy and decreases for the middle and lower classes: “Median wealth for those in the lowest wealth quintile decreased from just under $7,500 in the parents’ generation to less than $2,800 in the children’s generation. Conversely, at the top of the wealth distribution, median wealth increased from just under $500,000 in the parents’ generation to almost $630,000 in the children’s generation.” Further, the researchers found clear connections between wealth at birth and wealth at death. This chart summarizes their discoveries:
These effects were especially pronounced in the African-American community, which was hit particularly hard by the financial crisis. Not only were more blacks than whites unable to move up when born into the poorest quintile, but “[m]ore than two-thirds of blacks (68 percent) raised in the middle fall to the bottom two rungs of the ladder as adults compared with just under a third of whites (30 percent).”
There is a silver lining, though. The Pew researchers found that access to college for the poor and middle class was able to mitigate the worst effects of inequality on social mobility. Though income inequality is also restricting access to higher education for the poor and middle class, the student loan reforms passed in the Affordable Care Act are likely to boost aid for students who need loan assistance to attend college. Congressional Republicans, by contrast, want to cut Pell Grants for more than one million students.