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BUSINESS Monday 6 May 2019
A25

Many college grads feel their grip on middle class loosening

By JOSH BOAK in 2017 had student loans,
EMILY SWANSON with the average borrower
Associated Press leaving college with about
WASHINGTON (AP) — A col- $30,000 in debt, according
lege degree has long been to the College Board.
a ticket to the U.S. middle "Young people are fac-
class. ing unprecedented chal-
It typically confers higher lenges that are preventing
pay, stronger job security, them from achieving what
greater home ownership we all consider to be the
and comparatively stable American Dream," said
households. Those benefits Soncia Coleman, a senior
have long been seen as director at Young Invinci-
worth the sacrifices often bles, an advocacy group
required, from deferred in- for millennials.
come to student debt. "They need the education,
Yet college graduates but the cost to get it is as-
aren't as likely as they once tronomical."
were to feel they belong to What's more, disparities in
the middle class, accord- pay have widened within
ing to a collaborative anal- individual job categories
ysis of the 2018 General over the past decade, ac-
Social Survey by The Asso- cording to an analysis by
ciated Press-NORC Center In this May 17, 2018, file photo, new graduates line up before the start of the Bergen Community Martha Gimbel, research
for Public Affairs Research College commencement at MetLife Stadium in East Rutherford, N.J. director at Indeed.com,
and GSS staff. The survey Associated Press the jobs site. Using data
found that 35% of gradu- from the Bureau of Labor
ates described themselves well as those under 35, are identification with the duce his debts. Statistics, Gimbel studied
as working or lower class, less likely than they were middle class. Both people "I'm chipping at marble the gap between what
up from just 20% who felt in 1993 to describe them- who have graduated from with a spoon," Provo said. the top 10% of a profession
that way in 1983. By con- selves as middle or upper college and those who "I'm making some progress, earned compared with the
trast, only 64% of college class. haven't are now as likely but I don't feel like I'm get- bottom 10%.
grads say they feel they Not surprisingly, Americans as they were before the re- ting anywhere." Gimbel found that the most
belong to the middle or up- without a college degree cession to say their financial All told, student debt to- unequal incomes now exist
per class. have long felt even less situations have improved in tals roughly $1.5 trillion among financial services
The findings might seem sur- connected to the middle the past year. — a more than five-fold sales agents, medical doc-
prising given that the nearly class. Last year, six in 10 of But Americans are also increase since 2004, ac- tors and real estate agents.
decade-long U.S. econom- them described themselves more likely than they were cording to the Federal Re- Education, race, gender
ic expansion is on the verge as working or lower class, before the recession to say serve Bank of New York. To and age were relatively mi-
of becoming the longest about the same as the pro- they feel overworked. Col- help manage the burden, nor factors in the worsening
on record and unemploy- portion who said so in 1983. lege graduates are likelier many parents and older wage equality within occu-
ment is an ultra-low 3.8 per- (The survey didn't define than those without degrees family members have bor- pations. Among the more
cent. Yet the financial in- middle class; respondents to say they work overtime rowed to fund their chil- influential factors were
securities that afflict many replied based on their own (80% to 70 and that they dren's educations. the likelihood that workers
college graduates point to perceptions.) have more work to do than Fed researchers concluded are paid with bonuses, a
the widening gap between All of which suggests that they can complete (40% to that the increase in educa- concentration of high pay
the richest Americans and while college still offers a 30%). tion debt between 2005 among superstar perform-
everyone else. Dan Black, path upward, that route Among college graduates and 2014 has prevented ers and unequal profits
an economist at the Univer- has been narrowed by who feel untethered from home ownership for rough- among employers. q
sity of Chicago, suggested student debt loads, an the middle class is Justin ly 400,000 young people.
that the consequences of outpacing of home prices Provo of Chicago. At age At the same time, many
the trend could include relative to wages and wid- 28, Provo says student debt surveys show that student
delayed family formation, ening economic inequality. has inhibited his path to the debt has also delayed
lower levels of consumer The income disparities go middle class. He borrowed marriages and household
spending and, eventually, well beyond the gap be- a total of $58,000 to gradu- formation. The problem has
slower economic growth. tween the top 1% of earners ate in 2017 from Roosevelt emerged as an issue for the
"Concerns like this will defi- and all other households. University with a degree in 2020 presidential election,
nitely have impacts for the Disparities are widening economics and philoso- with multiple Democratic
economy, Black said. even within many occu- phy. candidates — most promi-
The survey shows that pations, including financial Now a portfolio manager nently Sen. Elizabeth War-
Americans — both col- advisers, lawyers and phy- for a mortgage servicing ren — calling for some form
lege graduates and those sicians. The result is that an company, he says his in- of student debt forgiveness.
without degrees — have ostensibly middle class job come-based loan repay- Economists have noted
broadly benefited as the title may provide a pay lev- ment plan isn't enough to that rising college debt has
country healed from the el more associated with a fully cover the interest on in effect become an en-
Great Recession, which lower middle class job. his loans. So his debt load try fee for the job market.
ended in 2009. But across The survey finds that Ameri- keeps rising even though Nearly 80% of the net 2 mil-
age groups, a college de- cans' satisfaction with their Provo is making his regular lion job gains last year went
gree has become less of personal finances has fi- loan payments. Just last to college graduates, even
an assurance of upward nally regained its pre-re- week, he received a real though just a third of adults
mobility. College gradu- cession levels even though estate license in hopes of hold a degree. But roughly
ates ages 50 and over, as this hasn't led to increased earning extra income to re- 60% of college graduates