Lawrence Cain Jr., a black millennial from Cincinnati, didn’t grow up in a privileged environment. His family didn’t have much money and rarely took vacations. But he had a strong community that he says taught him entrepreneurship and the ability to dream big. His mother worked double shifts at a nursing home. His mother and father each ran their own businesses. Cain started working in his grandfather’s deli when he was 11.
Mr. Kane, 35, earned a two-year business administration degree and initially worked as a bank teller and financial advisor. In 2015, he was ready to forge his own path. He started a financial coaching business, Abundance University. Business is booming. Now Mr. Kane considers himself solidly middle class. He and his wife, a teacher, can provide for themselves and their three children, plus make some money. They vacation all over the country. “My kids are spoiled,” he joked.
Cain’s findings in many ways mirror trends uncovered in a new Harvard study. The study looked at two groups: Gen Xers born in 1978 and millennials born in 1992. The researchers combed through decades of anonymized census and tax records that the federal government had given them access to. The data covered 57 million children, giving the researchers a more detailed view of recent generations than previous economic studies. They then adjusted for inflation to measure these groups’ ability to move up into the middle and upper classes, or economic mobility.
Asa Featherstone IV of The New York Times
The researchers found that black millennials born to low-income parents had an easier time getting ahead than previous black generations, while white millennials born to poor parents had a harder time getting ahead than white Gen Xers. Black people still earn less than whites on average, and the overall income gap remains large. But the gap has narrowed by about 30% between black and white Americans born into poverty.
Community of origin has a big impact on economic mobility. For centuries, this meant a big advantage, even for white Americans born into low-income families. But surprisingly, this research suggests that the advantage isn’t as big as it used to be.
On the other side of Cain is someone like Derek Brown, a white millennial from Cincinnati. His parents were divorced, and he grew up in two worlds: middle class and poor. His father worked in a General Electric factory, with a stable job and a middle-class lifestyle. Brown said his mother worked long hours at a gas station but struggled. Sometimes they couldn’t pay the bills and the power at their home was cut off. “It was never a dream,” he said.
Unlike Cain, Brown didn’t have a strong sense of community because he bounced between his mother, father and grandparents. Watching his mother, Brown came to believe that hard work didn’t always lead to a better life. He once wanted to be a journalist when he grew up, but gave up that dream in pursuit of more practical ways to earn a living.
Asa Featherstone IV of The New York Times
Asa Featherstone IV of The New York Times
Now, Brown, 34, feels he’s falling behind his father. He works as a hairdresser at Great Clips and lives paycheck to paycheck. He currently has $3,000 in medical bills that insurance doesn’t cover and doesn’t know how he’s going to pay them. He’s constantly dreading the next big expense. “I have really bad financial anxiety,” he says. “I don’t even want to drive anywhere because what if my car breaks down?”
“It’s planted in our heads this idea that anything is possible if we work hard enough,” Brown added. “What no one tells us is that for some people there is a glass ceiling and we don’t know it until we hit it.”
As the Harvard study shows, the gap in outcomes between Cain and Brown is increasingly typical. But racial differences aren’t the only ones found: Over the 15 years of the study, the opportunity gap between whites born into wealthy families and those born into poor families widened by roughly 30 percent. One possible interpretation is that “class is becoming more and more important in America,” while race is becoming less important, Raj Chetty, the study’s lead author, told me.
Let’s look at how class affected the results: For white Americans in particular, the mobility changes were very different between those born into poor families and those born into wealthy families.
Imagine four white children: one rich and one poor born in 1978, and two of them born in 1992.
At age 27, poor white millennials will have an average income less than poor white Gen Xers.
White Gen X kids from wealthy families can naturally expect to earn much more.
Poor white millennials are doing worse than previous generations, while wealthy white millennials are doing better.
This change has widened the class divide in America.
The data not only shows that people’s lives are determined by immutable facts like class and race, but also suggests that personal communities — access to work, school, and social networks — play a central role.
Imagine a thriving American community. What makes it successful? Jobs are key ingredients. So are effective schools, nice parks, low crime rates, and a general sense that success is achievable. In thriving places, people not only have good jobs, they know those jobs will lead to a better life, because they see and feel it all the time. “Our destinies are intertwined,” says Stephanie A. DeLuca, a sociologist at Johns Hopkins University who was not involved in the Harvard study. “The destinies of the people around you in your community also affect what happens to you.”
On a personal level, Lawrence Cain Jr. benefited from both his mother’s work and the support and entrepreneurial spirit of his family, who helped instill in him the idea that if he worked hard, he could become a business owner. “If your network is doing well, you might think that you can do well, too,” says David B. Gursky, a Stanford University sociologist who was not involved in the Harvard study.
The reverse is also true. Derek Brown says that childhoods were too chaotic for people to build strong social foundations. Bad events can cascade throughout a community and cause things to fall apart. Think of an area where crime is rising. Businesses move to safer places. The tax base shrinks, the infrastructure deteriorates, the schools deteriorate. People flee and social networks break apart. Despair spreads among those who remain.
Real-world impact
Asa Featherstone IV of The New York Times
Why have conditions worsened for poor white people and their communities, but not for black communities? One explanation focuses on job availability. Researchers have found that a community’s employment level is a significant predictor of differences in economic mobility.
In the real world, the situation might have played out like this: Over the past few decades, globalization and technological change have shifted many jobs from the United States to China, India, and other countries. These changes have pushed white people out of the workforce, while black people have found other jobs.
There are several possible explanations for the racial disparity. White workers may have had more wealth and savings to weather unemployment than black workers, but they may have had fewer opportunities for advancement. White workers may also have been less motivated to look for other work. A closed steel mill may have employed not just one worker, but his father or grandfather, making it a family business. People in such situations may feel they have lost more than just their jobs and give up on finding other work.
Neighborhoods where black workers live are generally less affected by job outflows than those where white workers live. Also, compared to previous generations, black workers today are less likely to face racial prejudice in the workforce and are more likely to find work. White workers may have generational ties to steel mill jobs, but black workers often do not have those ties because their parents or grandparents were unable to get the jobs because of segregation.
These trends have resulted in the loss of decades of economic progress for low-income whites and the reverse for Black Americans.
Changes in poverty persistence
Percentage of children born into low-income families who are no longer low-income by age 27
Source: Opportunity Insights
The findings do not suggest that opportunities for blacks have diminished those for whites: in fact, the study found that the areas where black mobility has increased the most have seen the smallest decline in white mobility.
In some ways, the study may be politically controversial. Conservatives have long argued that white working-class Americans are falling behind, while liberals have emphasized helping minority groups through policies like affirmative action. The left points out that black and brown people are far behind whites and therefore need more help from the welfare system. The right sees that, if true, it’s outdated thinking. The study provides ammunition for both sides.
“The left and the right have very different views on race and class,” said Ralph Richard Banks, a Stanford law professor who was not involved in the study. “The value of this work is that it presents hard evidence to answer these questions,” he added. “There’s information for everybody.”
Meanwhile, the Harvard researchers are optimistic about one key finding: Economic mobility can change relatively quickly. In Charlotte, North Carolina, conditions have improved since 2014 after an earlier study by the Harvard group prompted new investment in the city. Local leaders have pushed nonprofits and businesses, including city-based Bank of America, to provide job training, education, housing and other services to poor residents. The researchers hope their results will encourage other policymakers around the country to make similar investments.
“Opportunities can really change dramatically, even over a relatively short period of time,” said Benjamin Goldman, one of the Harvard researchers.
These trends do not apply evenly to all parts of the country: As this map shows, some places have seen larger or smaller gains among black Americans and larger or smaller declines among white Americans.
Expected income of children born into poverty at age 27 (by county)
Source: Opportunity Insights
Notes: Maps show expected income at age 27 for counties with at least 250 children in each relevant group. Counties in grey do not have estimates due to insufficient data.
Cain believes his story shows that hard work can lead to a better life. He saw how hard his mother, a black woman, had to work to survive. Growing up, he faced his own doubts and worries, such as racism and discrimination. But he always remembered the teachings of his mother and grandfather that he could achieve his own version of the American Dream.
“You get to do something for yourself, do something with the people you love, and chase that feeling of making an impact in your community every day,” Cain said. “To me, that’s success.”
How common are stories like Kane’s where you live? Through this interactive tool, you can see how economic mobility has changed in your county.
Comparing the income of black and white children born into poverty by county
Expected income at age 27
black
White