The 6 Reasons Americans Fall Out of the Middle Class

By Features 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 youll 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 youll end up if you didnt start in the middle class, theyre 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 persons likelihood of falling out of that economic group.

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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.

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The greatest predictor of a persons 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 persons 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.

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6. AFQT 20 percentiles lower
> Men: 6.1 percentage points
> Women: 6.4 percentage points
AFQT stands for Armed Forces Qualification Test. According to Pew, AFQT is a standardized test administered by the U.S. military to determine qualification for enlistment in the armed forces. The test measures reading comprehension, math knowledge, arithmetic reasoning and word knowledge and is predictive of a persons income later in life. Both men and women who score 20 percentiles lower on the exam at any score are at least 6 percentage points more likely to fall from the middle class.

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5. Less than some college
> Men: 13.1 percentage points
> Women: 9.5 percentage points
Men with a high school diploma or less are 13 percentage points more likely to fall out of the middle class than men who have at least some college education. The amount falls to 9.5 percentage point for women. This may be the result of employers increasingly expecting employees to have some amount of post-secondary education. According to the Georgetown University Center on Education and the Workforce, people with a high school diploma or less are accounting for an increasingly small percentage of the workforce. In 1970, nearly three-quarters of those workers considered to be middle class had not gone beyond high school in their education; in 2007, that figure had dropped below 40 percent, according to an article published in The New York Times.

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4. Less than college graduate
> Men: N/A
> Women: 16.3 percentage points
For women, having a high school diploma or less is even a greater detriment when compared with those who have graduated from college. They are 16.3 percentage points more likely to fall out of the middle class. (Statistically relevant data are not available for men.) Unfortunately, this problem may be getting worse. According to the College Board, tuition and fees for public universities have surged almost 130% over the last 20 years, while middle class incomes have remained relatively flat. Middle class families who cannot afford school must therefore either take on significant amounts of debt or downgrade their childrens education.

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3. Never married
> Men: 10 percentage points
> Women: 17.6 percentage points
Men who have never married are 10 percentage points more likely to fall from the middle class than married men. Women who have never married are 17.6 percentage points more likely to fall than married women. According to estimates from the Census Bureau, 18 percent of men ages 40 to 44 with less than four years of college have never married, up from 6 percent 25 years ago. Declines in marriage rates are taking place across all education levels, pointing to a increasing problem for people staying within the middle class.

2. Has used heroin
> Men: 26.2 percentage points
> Women: N/A
Not surprisingly, the use of hard drugs can be extremely damaging to your career. Although statistically relevant data is not available for women, men who have used heroin are 26.2 percentage points more likely to fall out of the middle class than those who never have. Perhaps more surprising, younger people and those with high incomes have made up a significant portion of heroin users since the 1990s, when the drug became purer, cleaner, and more popular in mainstream culture.

1. Divorced
> Men: 13 percentage points
> Women: 35.8 percentage points
Compared with married women, women who are divorced are 35.8 percentage points more likely to fall out of the middle class. Divorced men are 13 percentage points more likely. According to a Harvard University study, divorce was not as economically damaging a generation ago when it was common for only one member of the marriage to have an income before the divorce. As a result, after the divorce, both spouses could being working to support the two new households. According to the study, Evidence mounts that post-divorce, both women and men are struggling to make ends meet as they try to support two households on the same combined income. Additionally, a divorced woman with children, for example, is about three times more likely to file for bankruptcy than a man or woman, single or married, without children. And men who owe child support are about three times more likely to file for bankruptcy than men who dont.

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