The majority of Americans have higher incomes than their parents, but it is still not enough to move most of them into a higher bracket — especially those at the bottom.
A new report by The Pew Charitable Trusts, a non-profit research organization, compares the income and wealth of Americans with that of their parents at the same age and finds that 84 percent have higher incomes, adjusted for inflation.
It also finds that Americans raised at the bottom or top of the income ladder are more likely than others to remain in their parents' category. Forty-three percent of those raised in the poorest fifth of the population were still there; 4 percent made it to the highest-income group.
A defining factor of the American dream is that a person's family background or income have no bearing on where he or she ends up, but the study shows otherwise, says Erin Currier of Pew's Economic Mobility Project.
A family's economic background, race and neighborhood play a role, she says. Those at the top of the income ladder tend to stay at the top and those at the bottom stay at the bottom.
"The notion of the American dream is a real and tangible concept to Americans and is integral to the fabric of the country," Currier says. "This study challenges the notion of equality of opportunity."
A Pew poll last year found that 68 percent of Americans believed they will achieve the American dream. The same percentage believed they are in control of their economic situation and their children will be at least as well off as they are.
The new study finds that race plays a role in economic mobility. Fifty-three percent of African Americans raised at the poorest level of income are more likely to stay there, compared with 33 percent of whites. And 56 percent of blacks raised in the middle of the income ladder fell to a lower level as adults; 32 percent of whites did.
The study could not estimate black mobility in the top two levels of income because the number was too small. "That in and of itself says something," Currier says. "There is a racial mobility gap."
Scott Winship, an economic studies fellow at the Brookings Institution think tank, says the report matches other research showing the vast majority of people end up better off than their parents but don't reach a higher income bracket. Compared with other developed countries, "We have less upward mobility from the bottom," Winship says.
Fifty-seven percent of college graduates have more assets than their parents, compared with 46 percent of those without a degree.
This story first appeared in USA Today.