The widening income gap has become a controversial issue in the United States, as liberals decry the decline of the middle class and conservatives argue that a healthy market economy must reward effort, enterprise and risk taking. But on the related issue of economic mobility, or individuals’ ability to move up the income ladder, most people appear to agree: Upward mobility is good. more

On tonight’s Special Report with Bret Baier, James Rosen investigates the rising rate of downward mobility among the middle class. In a recent study, the Pew Charitable Trust found that 1 out of every 3 American middle class kids has fallen out of that class by the time they are an adult.

Adam Katz is happy to talk to reporters when he is promoting his business, a charter flight company based on Long Island called Talon Air. But when the subject was his position as one of America’s top earners, he balked. Seated at a desk fashioned from a jet fuel cell, wearing a button-down shirt with the company logo, he considered the public relations benefits and found them lacking: “It’s not very popular to be in the 1 percent these days, is it?”

America will recover from today’s slump. But not all Americans. The Pew survey collects sobering data on what happens to Americans who experience sharp income losses. Most eventually struggle back to their feet. But a substantial minority never do.

Nearly one-third of Americans who were raised in the middle class dropped down the economic ladder as adults—and that's before the Great Recession hit. more