Most of the decline in upward mobility across America, according to the Stanford researchers, can be blamed on growing income disparity between those at the top of the economic pile and those in the middle. "The economy is growing slower, and almost all the growth has accrued to the top (earners)," Manduca said. "Wages for the bottom 50 percent haven't gone up in 40 years (adjusted for inflation)."

The widening gap between the haves and have-nots is exemplified in Michigan, with its history of a large, prosperous blue-collar middle class, said Michigan State University economist Charles Ballard. "My friend's father came here from Poland in the 1940s, penniless," Ballard said. "For 30 years, he attached the left rear door handle on cars, and he went from nothing to the middle class.

"We rode the manufacturing wave so successfully in the 20th Century," Ballard said. "It made perfect rational sense to not go to college. You weren't dumb to not go to college when you could walk across the street to the Fisher Body plant and make upper middle class wages."

Today, a high school diploma is a more difficult ticket to the middle class. While the unemployment rate in Michigan is lower than it has been in more than a decade (the preliminary figure for April is 4.7 percent), a lot of those jobs aren't paying what they used to. For example, new General Motors workers make significantly less (about $16 an hour) than what Bryan Kaminski earned ($26 an hour in today's dollars) straight out of high school in 1977.

The median hourly wage in Michigan is lower today ($17.32) than it was 10 years ago ($18.67). That 7 percent decline ranks Michigan dead last among states, with Michigan being one of only eight states where residents have lost ground since 2007.

And that's only the adults who are working.

Michigan also ranks 40th in the nation in the share of adults in the workforce, another data point hidden by that upbeat unemployment rate, which only measures those actively looking for jobs, said Lou Glazer, president of Michigan Future, an Ann Arbor-based nonprofit working to improve the state's economy.

In 2014, just 56 percent of Michigan residents over the age of 16 had jobs, compared with 67 percent in Minnesota. If the same percentage of Michigan residents were employed as they are in Minnesota, there would be 847,000 more people bringing home paychecks.

"Our former avenue to the middle class has been cut off now," Ballard said. "And we in Michigan have been a day late and a dollar short in adjusting to these changes."