Over the course of the last quarter century, the dialogue about opportunity and social mobility in America has fundamentally changed. Now, the dialogue centers not on opportunities for upward social mobility, but on consequences and how certain groups are experiencing downward mobility from the middle class. This is the main subject of a new study by the Pew Charitable Trusts called, “Downward Mobility from the Middle Class: Waking Up from the American Dream.”

The study finds that a third of Americans who were raised in the middle class have fallen down the income ladder as adults. This downward social mobility is driven by factors such as education, marital status, test scores, drug use, gender and race. Namely, those most likely to experience downward mobility are:

  • Men and women who are divorced or never married;
  • Men and women who do not obtain education beyond high school;
  • Those who receive low scores on the Armed Forces Qualification Test (AFQT); and
  • Those engaged in heavy drug use.

Among white men and women, women were more likely to be downwardly mobile than men, and African-American men raised in middle class families were 17 percentage points more likely to fall from the middle class than white men raised in the middle.

The survey tracked Americans from youth into adulthood—the data focused on people who were middle-class teenagers in 1979 and who were between 39 and 44 years old in 2004 and 2006. It defined people as middle-class if they fell between the 30th and 70th percentiles in income distribution. For a family of four, that’s between $32,900 and $64,000 a year in 2010 dollars. If people fell below the 30th percentile in income, they were considered downwardly mobile.

Noteworthy is that the most important factor accounting for racial differences in the mobility gap were average test scores, highlighting the importance of education and the link between education and economic stability.

As the Pew study notes,

 “A key element of the American Dream is that each generation will exceed the living standards and economic position of the one that came before it. At the very least, parents want to ensure that their own economic position will transfer to their children.”

The findings of the Pew study, however, upend that dream, and shed light on the sober reality that many Americans are experiencing: it is becoming increasingly more difficult to enter and stay in the middle class. This downward mobility, and the “unraveling” of the middle class, is a trend that other studies, such as one published by the national policy group Demos, are confirming.

As more Americans find themselves falling down the income ladder, businesses can play a positive role in helping lower-wage workers maintain economic stability. By educating workers about tax credits and other benefits that they have earned, supporting low-wage workers in managing their work-life balance, and by supporting nursing mothers at work, employers can help lower-income workers retain more of their income and improve their quality of life.

Corporate Voices for Working Families has published practical toolkits to help employers, in turn, help their hourly workers, recognizing that policies and practices to do so positively affect the business bottom-line. In fact, the following toolkits published by Corporate Voices help businesses improve their recruitment and retention rates, employee productivity and engagement levels and help lower health care costs.

  • The 2010 Employer Guide: this guide provides businesses with practical tools, like paycheck stuffers, posters and a guidebook that provides information about the Earned Income Tax Credit, the Child Tax Credit, Medicaid and other benefits.
  • Healthy Babies Make Happy Moms, and Excellent Employees!: This online workplace lactation toolkit gives employers practical information about new federal workplace lactation provisions, and how they can implement lactation programs to support nursing mothers in hourly positions. Including things like employer talking points, a lactation room checklist and breastfeeding resources for new moms, this toolkit supports a mother’s choice to breastfeed while also helps businesses engage a key segment of the labor force.
  • Workplace Flexibility Toolkits for Hourly Employees and Managers: This set of toolkits help managers effectively implement flexible work arrangements (FWAs) for hourly workers. They also help workers assess what kind of flexibility they need and give them useful tips on how to request an FWA.

At a time when the middle class is struggling with the challenges of high unemployment, the rising costs of health care, child care and college tuition, and when many Americans are finding themselves sliding out of the middle class, it is helpful to remember ways that businesses can play a role in improving the lives of working families.

Note: Corporate Voices encourages employers to use its toolkits free of charge. Re-branding opportunities, however, are only available to Corporate Voices partner companies.