Note: This post is for both my talk at the Lansing Community College Centre for Engagement and for this week’s class discussions in Comparative Systems.
For those of us who have grown up in the late 20th century or the early 21st century, the American Dream has been a familiar relative – an Uncle Sam that was always there. The American Dream was the myth that united us. More than any other nation perhaps, the U.S. has always been defined more by concepts and ideals – these myths or stories – than by the traditions of blood, tribal roots, or land that defined so many other nations throughout history.
It can be argued that the American Dream, or at least our modern conception of it, was born in 1931 in pages written by James Truslow Adams. Wikipedia recounts for us:
The American Dream is a national ethos of the United States, the set of ideals (democracy, rights, liberty, opportunity, and equality) in which freedom includes the opportunity for prosperity and success, and an upward social mobility for the family and children, achieved through hard work in a society with few barriers. In the definition of the American Dream by James Truslow Adams in 1931, “life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement” regardless of social class or circumstances of birth.
There are lot of ways to operationalize the concept of the American Dream, but for these purposes I’m going to basically identify three features, all of which are primarily economic.
The “American Dream” meant that anybody in America, regardless of birth or station or inheritance, could through ordinary hard work do the following:
- “do better than Dad”. In other words, income and wealth for each succeeding generation should be significantly higher. In inflation adjusted terms, sons and daughters should make more money and have more wealth than their dad or mother did at the same age.
- homeownership – Americans should have their own property -usually a freestanding house.
- upward mobility – it should be possible through strength of character and hard work – “merit” – to rise up to higher income and social classes than what a person was born into. This is the classic Horatio Alger story.
If the American Dream were a person born in 1931 when Adams coined the phrase, then by these criteria we can describe his (her) life as:
- a hard scrabble childhood in the Depresssion
- emerging as a teenager in 1945 from World War II, the American Dream hits a stride. The dream was real, if unevenly distributed across races, between 1946 and roughly 1980.
- Starting around 1980, our midlife Dream now begins to slow down. It is increasingly faking it by borrowing money to keep up appearances of success but not really making it happen.
- In this century, the Dream collapses. Slow economic growth, rising income inequality, and massive shifts in economic policies mean then end of the American Dream.
By the time the Millenials arrive on the scene as young adults, the concept of American Dream is more a nightmare or cruel joke than a dream.
From here I’m going to try to explain what has happened using mostly data and graphs. First we’re going to look at the evidence that indeed, upward mobility and the ability to “earn more than dad” are dead. For the next section here, I’m going to use graphs from
- The American Dream, Quantified at Last, by David Leonhardt in NYTimes, based on research by a team of economists led by Raj Chetty .
- Upward Mobility declines sharply as the rich make off with the growth – by Bill Mitchell on Billy Blog.
Next, we’ll take a look at the specifics of how that has affected so-called “millennials”:
- Steven Rattner’s New York Times Sunday Review piece on “We’re Making Life Too Hard for Millennials”.
- The Financial Health of Young America, a report by Young Invincibles based upon Federal Reserve Board Survey of Consumer Finances.
If we have time, I’ll speculate on the causes and what can be done.
My slides that I’ll use in addition to the graphs in the above links are here. If this embedded view won’t display in your browser or allow you to download, use this link: