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Economic mobility gains may be due to dual-income families

Published: Tuesday, Feb. 26 2013 3:40 p.m. MST

Dr. Jaren C. Argyle works with patient Jeff Kitchen in his dentist office. Argyle grew up in a family with six children.

Ravell Call, Deseret News

SYRACUSE, Utah — If parents are happier when their children do better financially than they did, then there should be a lot of happy parents in the United States.

But more American families reach that status today through dual incomes, according to a new report released Tuesday.

Jaren C. Argyle, a dentist practicing in Syracuse, Utah, hesitated just a moment this week when asked if he thought he made more than his parents did at the same age. The latest data from the Pew Economic Mobility Project, however, almost answered the question before it was asked: Eighty-three percent of adult children make more than their parents did.

"I would say that we are financially better off than my parents were at this age," said Argyle, who grew up about an hour north, in Tremonton, in a family with six kids.

"I'd definitely classify that as a big family," he said.

His father was a nurse anesthetist. "He's done well for himself," Argyle said. "Things were tight growing up with six kids. So we didn't have a lot of the things we wanted, but we always had the things we needed. We had opportunities and plenty of family vacations. … I had a great childhood."

Although Argyle grew up in a single-earner family, his wife, Natalie, grew up in a dual-earner family. Whether families in general are doing better economically than their parents' families has to do with dual-income, a new interactive graphic released this week by the Pew Economic Mobility Project demonstrates.

A previous look at absolute economic mobility by Pew showed how 83 percent of families make more than their parents did, adjusting for inflation and family size. A new interactive graphic at www.pewstates.org digs deeper into the data — giving people a look at the extent of how people are doing better and dividing the information up by race, education and number of earners.

The study shows that a greater proportion of dual-earner families have more income than their parents did when compared with single-earner families. Ninety-three percent of dual-earner families are making more than their parents, while 77 percent of single-earner families are making more.

Setting the graphic to see how many dual-earner families are making at least $25,000 more than their parents shows a starker difference. Sixty-two percent of dual-earner families are making at least 25,000 more than their parents, while only 35 percent of single-earner families do the same.

But if the interactive data is set to show what percentage of dual- and single-earner families are making at least $100,000 more in income, the gap between the number of earners disappears. Six percent of both dual- and single-earners make that much more than their parents.

"I think that is a really important contribution," said Diana Elliott, research manager at the Economic Mobility Project, "We are finding, increasingly, that mobility is a family enterprise. Part of the mobility gain from this generation compared to the last generation can be attributed to having more dual-earner families."

It is increasingly the case that having two workers in a family is important for upward mobility," Elliott said. "Given that we have more dual-earner families in this country and we also have this growth in upward income mobility, (the data) points to this connection between dual-earner families and upward income mobility."

Argyle's family is a single-earner family, and so bucks the data a little bit.

Argyle guessed that three of his parents' six children have families that are doing better than their parents were doing at those ages. "They are all pretty much single-income families," he said.

The Pew data in this new interactive graphic is looking at what is called absolute mobility — how the general improvement in the economy has raised just about everybody's income relative to their parents' — even when accounting for inflation and family size.

"It is really important to bear in mind that interpreting these findings requires a certain amount of care and context," Elliott said.

There have been many broader changes in income and wealth over the last 40 years, she said. "We know that those raised in the bottom, three out of four have $10,000 more in income than their parents did. But what does that income get you on the ladder?"

Even if a person is making $10,000 more in inflation-adjusted dollars, it isn't necessarily enough to guarantee they will rise to the next highest fifth in income.

"It is also important to consider what does that increase of $10,000 buy you given today's incomes and constraints in the economic climate generally," Elliott said.

The data also doesn't show what percentage of that income comes from welfare, Social Security and so forth.

Other findings from the new interactive tool include how 61 percent of adult children with a college degree exceeded their parents' income by at least $25,000. Only 42 percent of adult children without a degree exceeded their parents' income by that amount. If people in the bottom fifth of income acquire a college degree, 27 percent are making $50,000 or more than their parents.

The idea of his two children growing up and making more income than him doesn't bother Argyle, it is part of the American Dream.

"I would prefer for them to do better than I do," he said. "I have no problem with them being able to surpass where I am at. As long as they are responsible with it."

EMAIL: mdegroote@deseretnews.com

Twitter: @degroote

Facebook: facebook.com/madegroote

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