New Analysis Sees Men Failing to Reach Income Levels of Previous Generation

American men have less income than their fathers' generation did at the same age, according to a new analysis released by the Economic Mobility Project, an initiative of The Pew Charitable Trusts. Comprised of a Principals' Group of experts from The American Enterprise Institute, The Brookings Institution, TheHeritage Foundation, and The Urban Institute, the project seeks to investigate the health and status of economic mobility in America.

The new report, Economic Mobility: Is the American Dream Alive and Well?, was co-written by John Morton, managing director of Pew's Economic Policy Initiatives and director of the Economic Mobility Project and Isabel Sawhill, senior fellow at the Brookings Institution and a principal of the Economic Mobility Project. It includes analysis led by a research team at Brookings and outlines what economic mobility is, why it matters in today's economy, and why it is important for policy makers to focus on mobility as part of the ongoing national economic debate.

According to the report, men who were in their thirties in 1974 had median incomes of about $40,000, while men of the same age in 2004 had median incomes of about $35,000 (adjusted for inflation). Thus, as a group, income for this generation of men is, on average, 12 percent lower than those of their fathers' generation. While factors other than cash income also contribute to economic mobility, these data challenge the two-century-old presumption that each successive generation will be better off than the one that came before. The findings rely on new analysis of U.S. Census Bureau data.

In addition to the Principals' Group, the project is also guided by a nonpartisan advisory board of nationally recognized economists, social scientists and policy experts. The initiative was launched in February and comes at a period of intense scrutiny of such issues as executive pay, the minimum wage and the quality of America's public school system -- the latter being of particular concern because education is widely agreed to be a keydriver of mobility.

"The expectation that each generation will do better than their parentshas become a fundamental part of what we call 'The American Dream,' but this new analysis suggests this bedrock belief may be shifting under ourfeet," says Morton. "Income is not the only factor in overall economic mobility, but it is clearly a key component and today's data suggest thatduring a thirty-year period of economic expansion, a rising tide did not lift all boats."

"In modern America, mobility is increasingly a family enterprise," says Sawhill. "While male incomes have decreased from that of the generation that came before, family incomes have risen slightly because more women have gone to work, adding a second earner to the family."

The broader mobility story is complex with data challenges and many important questions left to be answered. Over the next year and a half, the Economic Mobility Project and its partners will research, analyze and present data to the broader public about the status of economic mobility in the United States. Future releases will include: a comprehensive fact book containing key data and trends about mobility, featuring chapters on race, gender, immigration and cross-national comparisons; a report on the leading factors or indicators behind economic mobility; and an analysis of shifting federal investments in education and other policies that may impact mobility.

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Higher Minimum Wage Would Help 13 Million U.S. Workers

Since 1997, the federal minimum wage has been stuck at $5.15. A bill moving through the new Congress would raise the minimum wage to $7.25—an increase that is long overdue, according to the left-leaning Center for American Progress, a Washington think tank.

This minimum wage increase would boost earnings for 13 million American workers—9.8 percent of the workforce, the think tank says.

The U.S. House of Representatives passed a federal minimum wage increase, and now it is up to the U.S. Senate to consider the bill.

• Twelve million adult wage-earners, 80 percent of the minimum wage-earning population, will directly benefit from a minimum wage increase.
• Seven million families with children—46 percent of the total low wage-earning families with children—currently receive all of their earnings from minimum wage jobs.
• Nine million women (59 percent of minimum wage earners) and six million people of color (40 percent of minimum wage earners) will directly benefit from a minimum wage increase.
• Raising the minimum wage will increase annual earnings to $15,000 from $10,700. Without this increase, a family of three supported by one minimum wage earner will live roughly $5,400 below the federal poverty line.
• At the 350 largest public companies, the average CEO total direct compensation was $11.6 million in 2005. At this rate of compensation, it takes the average CEO only one hour and 55 minutes to earn the annual pay of a minimum wage worker.

The minimum wage increase will not harm our economy, the think tank says:

• The minimum wage increase will not cause price inflation. In Arizona, for example, the total cost of the wage increases is equal to 0.08 percent of total sales. The average business can fully cover the cost of the minimum wage by increasing revenue by less than 0.1 percent.
• The minimum wage increase will not destroy job growth. Between 1997 and 2003, small business employment increased by 9.4 percent in higher minimum wage states, compared to 6.6 percent in states at the federal level.
• The minimum wage increase will not shut down small businesses. Between 1998 and 2003, the number of small businesses increased by 5.5 percent in higher minimum wage states, compared to 4.2 percent in states at the federal minimum wage level.

Raising the minimum wage is a progressive issue that resonates with the American public and bridges the partisan divide, the center adds.

• A 2006 opinion poll found that 83 percent of Americans support an increase in the federal minimum wage.
• A decade of federal inaction has prompted 29 states (including D.C.) to raise the minimum wage above $5.15.
• The minimum wage is an opportunity for bipartisanship. In 2006, the governors and state legislatures of California, Michigan, and Pennsylvania worked across party lines to raise the minimum wage.
• In 2006, the minimum wage ballot initiatives had a “6-0” winning record in six states that voted for President Bush in 2000 and 2004. The minimum wage presents an issue that can unite, rather than divide, America.


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