The “American Dream”, which I previously had so much faith in, seems to be more and more just that, a dream. The “American Dream” still exists, it is definitely attainable – but less so than before.
Many of the articles I read actually argued that the mobility rate in the U.S. economy is the same as it always was, just that there are huge amounts of inequality and the middle class is disappearing. That to me though, contradicts itself, as those same articles state that the middle class is the class that moves the most and “a thinner middle class… means fewer stepping stones available to people born into low-income families”.1 With such a wide gap between the rich and poor and less and less in between, how can we expect people to move up in the world? Michael M. Phillips writes, “in any 10-year period, roughly 60% of Americans change rungs on the ladder, some moving up and some moving down”.2 Yet, with the middle class in decline, this socio-economic “ladder” referred to in nearly every article seems to have only a few rungs at the bottom and a few rungs at the top, leaving a huge space in between. People can easily fall down, but to get up you really need to be able to jump. With a dwindling middle class, getting to the top is harder than ever.
Data from the U.S. Census Bureau’s Current Population Survey showed that from 1994 to 2007 “the “disappearing” middle class continued to “disappear” into higher tax brackets”, A.K.A. they made more money.3 This I find hard to believe though, as the median income declined from 1999 to 2009.1 According to the U.S. Census Bureau, by far most people had an income of over $100,000- if that is true, then how come in 2007 the bottom 90% had an average income of only $32,000?4 Especially with the recent Great Recession, I think it is more obvious then ever that the middle class is falling down the ladder, not going up.
According to the Economic Mobility Project, people are more likely to gain income than loose income over two and ten year periods, and when people do experience income loss, it’s about a 50% chance that they will recover in a few years. Well, looking at this “glass half empty”, 34% did not recover after 10 years for short-term income drops, and 49% did not recover after 10 years for a long-term income drop. Even after recovery, the article states, “they may not be as well off as when they started…because the same percentage drop and subsequent gain do not lead to a full recovery”, and those who experienced a large 10 year income drop but then recovered still had incomes lower than their peers.5 Once people are hit, it’s hard to recover, let alone improve from what you had before. Not to mention, that data was taken from 1967-2004, beforethe 2007 recession, so I’m sure in the past couple years this information has changed dramatically; there is no way people are more likely to gain income than loose income in our current economy. In the past couple years, our economy has been anything but upwardly mobile.
To most Americans, income inequality is not a huge issue because they believe that everyone has an equal opportunity to change their circumstances. I really don’t believe this is the case though, and I blame it mostly on education. “The return on education has risen in recent decades”, yet not all K-12 schools are equal in quality and the cost of higher education is rising at incredible rates. In this economy, where low-skill jobs are being replaced by technology or going overseas, not even college is good enough, to really get job protection, you need graduate school as well, says Don Peck.1 Well if higher education is the answer, why do college graduates make up only 30% of the population and 58% of the adult population only have a high school diploma? Most reasons point to their socio-economic class: to be successful, you must already be successful. The community you can afford to live in dictates how good the schools are that your children get to attend, being surrounded by others in your “class” influences that education (if it’s valued or not) and if they continue their education (if it’s expected or not), and finally, your economic success or struggle decides whether or not you can afford to wait a few years before entering the work force, the resources helpful to getting into college (paying for tutors, tests, application fees, etc.), and, of course, college itself. The “American Dream” is not free, and the sad truth is that the poor can’t “get the education they need to get into occupations that would allow them to move ahead”. In the United States “the link between parents’ earnings and children’s economic attainment was the strongest”, along with the United Kingdom, out of the eight most industrialized countries.6 Our “American Dream” is more of a reality in other countries. Also, many of the best colleges have “legacy” admissions, which basically gives more opportunity to those who come from “successful” backgrounds and less to those who have not (if you believe there’s an “informal quota system”). Without parents who went to college, you are already at a disadvantage.
So is the American economy as upwardly mobile as people believe it to be? Especially coming out of a recession, with poverty, unemployment, and college tuition on the rise, I strongly believe the answer is no. With the rich getting richer and the poor getting poorer, it’s becoming more and more difficult for the people on the bottom to afford the tools necessary to even get the opportunity to get on the top. And even if their goal is not to get to the top, as Bryan Caplan says, “incomes differ because priorities differ”, I’m sure their goal was not to be at the bottom either.7 That’s like saying since they don’t care about being rich, they like being poor- no one wants to spend their life struggling. That seems to be the case though, as for those few that do move up or down the ladder, most of them spent 80% of their lives where they started.2 And as for future generations changing their position, “it takes an average of 6 generations for wealthy families’ economic advantage to stop influencing the economic status of their children” and 22% of sons who’s father is in the bottom tenth of the income distribution stay in the bottom tenth later in life.6 The U.S. economy is still in a bad state right now, so with poverty so widespread it is difficult to think that it is possible to move up. Your parent’s economic situation seems to dictate how difficult or easy it will be to attain the “American Dream”, which is not what the “American Dream” is suppose to be about at all.
1 = “Can the Middle Class Be Saved?” by Don Peck
2 = “The Outlook: Inequality May Grow for Lifetime Earnings” by Michael M. Phillips
3 = “A Goy and His Blog”
4 = Visualizing Economics (In-Class Sheet)
5 = “Ups and Downs: Americans’ prospects for recovery after an income loss”
6 = “Is Upward Mobility Still Possible?” by Marcia Clemmitt
7 = “Kahneman, Greed and Success” by Bryan Caplan
Grade: A) A very sound statement and support of your point of view. You cite many valid data-driven conclusions-but overall I was left wondering what you agree: conservative or liberal minded fiscal policies? As early as 1866, 60 percent of people worked for other people. Now, it’s 90-something percent. Are we back to where we were during the Gilded Age?The concentration of wealth is not quite at the Gilded Age chasm, but we’re getting there. Back then Americans could not imagine a fairer society; inequality was continuous with the unequal past. Today we can remember a fairer past—the New Deal era from the 1940s to 1970 saw real family incomes double, high marginal tax rates on the rich, and unions representing more than a third of the private-sector workforce. Memory is a radical organ in today’s America. Between 1950 and 1970 for every additional dollar earned by the bottom 90 percent of the income distribution, the top .01 percent earned $162. Today, the top .01 percent earn $18,000. Gilded Age Americans lived before equality. We live after equality. Outrage over business rule and the un-American concentration of wealth and power spurred the early twentieth-century reform movement known as Progressivism. Corporate contributions to political campaigns were outlawed. Monopolies were broken up. Progressive income and inheritance taxes were passed. Will history repeat itself? The Gilded Age has repeated itself; why not the Progressive Era? That should be the question...
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