The Fragile American Dream
Pew Charitable Trusts’ expert and local panelists explore the challenges of getting ahead financially and the persistent racial gap in economic mobility
October 15, 2017
The American dream is difficult to achieve for many people in this country, with a substantive number of families stuck at the bottom of the economic ladder, unable to climb up.
That was a key takeaway from a briefing by Erin Currier, Director of Financial and Economic Mobility at the Pew Charitable Trusts, hosted by Seattle Foundation on Oct. 13.
Currier said the powerful notion that anyone and everyone can pull themselves up by their bootstraps is not borne out by the data. Nationally, just four percent of kids raised in the bottom economic fifth are able to rise to a higher income level.
The economic mobility gap between blacks and whites in America is particularly pronounced. And it’s even more extreme in Seattle, where the median income of $90,000 a year for whites is significantly higher than the national median income of $57,000 and two and a half times higher than the median income of $36,000 for African American families in Seattle. In fact, black families in Seattle had lower median income than the national median, which is $38,000.
In addition to an income gap, there’s also a wealth gap, where those at the bottom have a hard time accumulating assets and savings or transferring wealth to the next generation.
While Seattle has much to be proud of and has one of the best rates of moving kids up from the bottom tier of income, Currier said there’s considerable economic and racial segregation here, resulting in wealthy, white people living in certain neighborhoods, while lower income and people of color reside in others.
Currier said we need to find ways to build the financial, social and human capital of people who are living on those bottom rungs. Changing this increasingly stratified economic system is critical to the health of our country, she said, and we can do that by building upon what’s working and figuring out where we can improve.
One such powerful path is a college education. Currier said 90% of those in the bottom quintile of family income who earn four-year degrees are able to ascend to better situations.
After the presentation, Pew was joined for a panel discussion by Michael Brown, Vice President of Community Programs at the Foundation; Nicole Vallestero Keenan, executive director of the Fair Work Center; and Misha Werschkul, Executive Director of the Washington State Budget and Policy Center. Jerry Large, Seattle Times columnist, served as the moderator.
Keenan said that in her center’s effort to protect workers from unfair practices, racism and discrimination are often at the heart of the matter rather than wage theft. The center has now trained 20,000 workers to know their rights at work and has a legal center to provide advice.
Werschkul said that Washington has the most regressive tax system in the country, where people making the least pay the most in taxes as a percentage of their income. That structure furthers inequity, but she said we can change that with better tax policy.
Currier shared an especially telling statistic on the fragile economic state of families. Pew survey data found 92 percent of Americans say it is more important to them to achieve financial stability than it is to get ahead or improve their situation.
Brown shared how Seattle Foundation is working to change systems by building power in communities so that they can increase opportunities, influence more favorable policies and help close the gap in the region between the wealthy and privileged and those who are marginalized.
The Foundation is concentrating investments to increase racial equity and economic opportunity through efforts: the Civic Leadership Fund, the Center for Community Partnerships and the Healthy Community Funds.
Center for Community Partnerships,