Where Intelligence Meets News Analysis.

The American Dream is Dead

No other idea enjoys widespread recognition or acceptance as that which the American Dream proffers. It is the magnetic field that tugs at every heart. It is a promise of sorts, backed by the full faith of the most prosperous nation on earth: As James Tuslow Adams defines it in 1931, that “life should be better and richer for everyone, with opportunity for each according to ability or achievement,” and thus upward mobility an accessible commodity to everyone and anyone at any time.

Alas, recent reports by venerable institutions and works by noted scholars lead to a discomforting yet reasonable conclusion—the American Dream is today a pipe dream.

For over 30 years now, American life has been caught within the throes of a vengeful chasm. The disparity between the haves and the have-nots is at a level not seen pre-The Great Depression.  According to an analysis by the Congressional Budget Office of this time span, the top 1% of Americans after taxes, saw their income grow 275% while the bottom 20% of Americans saw a paltry increase of 18%. In more easily digestible numbers, the richest 1 percent now makes an average of $1.3 million in after-tax income compared to $17,700 for the poorest 20 percent.

Social scientists will be quick to point to a myriad causes for this, and a good number will be right in their assessments. Data shows that as the American economy has gradually transitioned from production-heavy activities, such as manufacturing, to service-heavy activities, such as finance and investment, income at these higher levels requires skilled knowledge achievable only through higher education—which millions of middle-class and poorer Americans do not have.

Thus, equal opportunity, the crux of the American Dream, is now increasingly conjoined with education. And, education, tied to the amount of dollars in one’s pocket.

As can be deduced and as figures also do show, a vicious cycle kicks in.  In a report by the Pew Research Center, 75% of the public now claim college is too expensive for most Americans to afford, while 71% of adults say it’s harder for today’s young people to pay for college than it was for their parents’ generation. And of those students who took out college loans and are no longer in school, 48% say repaying the debt has made it harder to make ends meet.

It is the tale of the American meritocratic system which birthed the American Dream, and now so visibly fails to live up to the promise. A point Christopher Hayes of MSNBC and the Nation vehemently argues in his book, “Twilight of the Elites.” Although America is still a meritocratic society, he defends the tension that the game has become so rigged that wealthy and affluent Americans, who might have achieved elitism themselves through good grades, effort, and merit, fight tooth and nail to destroy the ladder with which they climbed up—so as to maintain exclusivity.  A good example he makes is his own educational upbringing at the elite Hunter College High School in New York City, where rich parents have their kids prepped at expensive and intensive prep centers so as to pass the entrance test; while more and more kids of black and Hispanic parents (historically of less economic wherewithal) are locked out.

It is a point Charles Murray echoes in his book, “Coming Apart.” He writes: “The reason that upper-middle-class children dominate the population of elite schools is that the parents of the upper-middle class now produce a disproportionate number of the smartest children.” He goes on to conclude that “highly disproportionate numbers of exceptionally able children in the next generation will come from parents in the upper-middle class, and more specifically from parents who are already part of the broad elite.”

So wherein lies the hope for middle-income and low-income Americans, if a necessary tool for upward mobility seems so grossly out of reach?

According to a just-released study by the Pew Charitable Trust, only 4% of people raised at the bottom quintile of American society will ever make it to the top.  More than 40 percent of Americans raised in the bottom quintile of the family income ladder remain stuck there as adults, and 70 percent remain below the middle. The study proves even more ominous for minorities such as African Americans, who are more likely to be stuck at the bottom and fall from the middle of the economic ladder across a generation. In short, in American society, if you are born at the bottom of the income ladder, you are likely to stay there as an adult.

Erin Currier, the project manager who helped prepare the study, candidly states what becomes obvious, “The rags-to-riches story is more often found in Hollywood than in reality.”

And, of course, there’s no denying that economic policies play a pivotal role in this morass. Jacob S. Hacker and Paul Pierson in their book, “Winner-Take-All Politics,” go to great length to show how economic predation by the rich and affluent have stagnated income at the middle-class level and pushed lower-income Americans farther into penury. Through the power which their wealth commands, rich Americans have been able to secure for themselves tax cuts and cheap tax rates, incinerate most efforts at corporate oversight and regulation of financial markets, and even succeeded in instituting laws and policies that cut back on social assistance to middle and lower-income families.

In a survey released earlier this year by the Pew Research Center, more Americans now rank conflicts between the poor and the rich ahead of three other potential sources of group tension in America—between immigrants and the native born; between blacks and whites; and between young and old.

The American Dream ceases to be THE Dream if only a few exceptions are privy to it.  Equal access is the premise of the promise. International studies now show that if you seek upward mobility, you will do better going to countries like Canada, Sweden, Denmark, Finland, France, and Germany—Among high-income countries for which data is available, only the United Kingdom had a lower rate of mobility than the United States.

There’s still hope of resurrecting the American Dream. If education is important for mobility in this technology age, the burden is on government to engineer ways to lower the cost of education for those disproportionately disadvantaged families in society—so it ceases to be a boogeyman to hardworking parents trying to enrich their children’s lives. A more empowered citizenry with higher income repays government through higher tax receipts. Policies that invest in public schools, such as increasing teacher pay to attract the best teachers possible, modernizing classrooms, etc. will go a long way in forestalling the doom ahead.

Ultimately, a fiscal policy that requires more from the affluent to support those at the bottom rung of the economic ladder is indispensable to the revival of the American Dream. This is not to mandate a government takeover or handout, rather, a hand-up in achieving that “family, 2.5 kids, a dog, and a house with a white picket fence” that was once-upon-a-time the poster image of the American Dream.  To quote United States Supreme Court Justice Louis Brandeis, “We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.” From here, the future is clear.

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