5 Signs You're Falling Behind--Maybe For Good

The rich are getting richer, but the bigger problem is that fewer people are climbing the social ladder.

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We know what happened during the recession: The economy quaked, joblessness soared, home values plunged and a big chunk of the middle class fell way behind.

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Economists and other experts are now trying to figure out what's likely to happen next. It's well known that income inequality has deteriorated over the last couple of decades. The incomes of top earners have risen sharply, while median income has stagnated. By some measures, the concentration of wealth among the top one percent of earners is at the highest levels since the 1920s. Nobody disputes that the rich are getting richer while others are stuck in a rut.

The real problem, though, isn't that the wealthy are doing well. It's that people who used to be able to improve their lives and move up the social ladder are having a harder time doing so. "The American Dream, to me, is about social mobility, not equality," Harvard historian Niall Ferguson said at the recent Milken Institute conference in Los Angeles. "What we need to figure out is 'Why has mobility declined?'"

America's stalled social escalator is fueling the Occupy movement, the incendiary debate over wealth in this year's elections and perhaps even long-term cultural change. Experts still aren't entirely sure why it has gotten harder to get ahead, but they're forming and testing a variety of theories. Here are five signs that your prospects may be declining, even if it doesn't feel that way right now.

You've stopped learning. It goes without saying that education is the single most important contributor to success. Those with college and advanced degrees earn far more than those who merely graduated from high school, and many of the manufacturing jobs that used to be pathways to prosperity for high school grads no longer exist. "We have to have kids who, after high school, learn how to do things that will allow them to make a good living," says political scientist Charles Murray, author of the new book, Coming Apart.

But beyond simply getting a degree, people who are striving to move upward need to keep learning and adding to their skills, to keep up with an economy that changes faster than ever. That could mean formal courses, on-the-job training programs or informal tutorials from friends or colleagues. One hallmark of innovators is the ability to apply ideas from one discipline to another. "Creativity is a new connection between old ideas," says Jonah Lehrer, author of the new book Imagine. That requires keeping up with what's new in other fields, as well as in your own.

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You don't associate with influential people. In Coming Apart, Murray describes a kind of socioeconomic segregation that has occurred in America since 1960, as disparate income groups that used to live in the same communities have drifted into closed enclaves that mainly include people like themselves. So well-educated high earners tend to meet, marry and do business with people just like themselves, and live in towns where things that matter to the affluent—such as good education—are priorities. Less-educated lower earners, meanwhile, have less access to the kinds of influences that might help them, or their kids, climb the social ladder. Murray's research is controversial, but it does seem self-evident that exposure to successful people is more helpful than exposure to strugglers.

Technology threatens your livelihood. One bright spot in the economy is the tech sector, with companies like Apple, Facebook and Google adding jobs, creating new markets and racking up profits. But technology, of course, can upend and transform old industries, as it has already done with music, travel, and publishing and may soon do with entertainment, law, accounting and even medicine.

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The U.S. manufacturing sector, as one example, seems to be poised for an impressive revival, as improved costs, favorable currency rates and other factors lure many companies back to U.S. factories. But modern plants are no longer filled with assembly line workers handling every small task. They're high-tech marvels that rely heavily on specialized equipment, and small numbers of well-trained workers with the skills to operate it. Just about everybody in this economy should be looking around the corner to see how technology is likely to change what they earn a living at—or make it obsolete.

You're flying solo. Murray and others have highlighted the difficulties that single parents face keeping up with their kids' education, job demands, career opportunities and the need for social involvement. Women have made impressive economic strides over the last 30 years that have left them far less dependent on men. But one consequence of that may be more economic isolation, especially for lower-earning women.

You're too dependent on government. More than half the U.S. population depends on government for a major part of their income, according to economist Gary Shilling. That ought to be terrifying, because it is a virtual certainty that government spending has to shrink, and taxes must rise, to keep the nation from going broke. The pain of spending cuts will be spread among government workers (including teachers and others employed by local government), Medicare and Social Security recipients, soldiers, pensioners and many contractors whose work is funded by the government. Most working people, meanwhile, will see their taxes rise. For anybody living on the edge, that's a ticking time bomb. But at least you know it's going to blow.

Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.