MYTH: The American Dream is still alive and well, no matter what the New York Times may say

 

People were also asked about what they thought their own personal prospects were for becoming rich. Amazingly, 11 percent said that they thought it was very likely. Another 34 percent thought it was somewhat likely. Only 22 percent thought they had no chance at all. This may explain why so many people in the Times poll said that they favor the abolition of the estate tax. Only 17 percent of people favor this tax and an overwhelming 76 percent oppose it. Obviously, many people who know that they themselves will never, ever pay this tax nevertheless favor its abolition. I believe that the recent media interest in inequality is part of a last-ditch effort to save the estate tax from repeal this year. The Times poll suggests that it will be an uphill effort. (Bruce Bartlett, “Economic Class Stagnation Bull,” National Review, 6/13/05)

 

Interestingly, the strongest evidence is found in the most recent poll, taken in March by, ironically, the New York Times. According to this study, 18 percent of people reported living in the lower class as children. But today, only 7 percent say they belong to that class. Another 44 percent say they had a working class childhood. However, only 35 percent say they are part of the working class today. In short, the percentage of the population living in the bottom two income classes fell from 62 percent to 42 percent — an impressive improvement, greater than in any other survey. (Bartlett)

 

It doesn’t come as much of a surprise that inequality is an issue that plays for Democrats. Bashing the rich is in their blood and no Democrat is happier than when he is engaging in class warfare. Consequently, it is in the Democrats’ interest to play up inequality and any sign that the rich are getting richer, especially if they can show that it is coming at the expense of the poor and the middle class. (Bartlett)

 

Reality

Unfortunately, if one examines the statistics on class that are cited by Bruce Bartlett, you see that the stats are not based on actual, hard numbers, but on people’s perceptions of their economic situation.

 

The reality is that the American Dream is slowly drifting away from us. The likelihood that we will live as well as our parents becomes smaller with each passing decade. In response, and accord, with the pieces published in The New York Times and The Wall Street Journal regarding the importance of class in determining such important matters as life and death, The Economist’s Lexington column also devoted space to the discussion of the slipping away of the American Dream. In this latter column, the writer cites the fact that “In 1980-2002 the share of total income earned by the top 0.1% of earners more than doubled. But there is also growing evidence that the ladder is getting stickier: that intergenerational mobility is no longer increasing, as it did during the long post-war boom, and may well be decreasing.” A New York Times editorial echoed these same facts, stating that:

[T]here is far less mobility up and down the economic ladder than economists once thought or than most Americans believe. Class based on economic and social differences remains a powerful force in American life and has come to play a greater, not lesser, role over the last three decades. A parallel series in The Wall Street Journal found that as the gap between rich and poor has widened in America, the odds that a child will climb from poverty to wealth, or fall from wealth to the middle class, have remained stuck, leaving Americans no more likely to rise or fall from their parents' economic class than they were 35 years ago.

If economists state that class mobility has stagnated, how can people believe they are in fact moving up the social ladder?

 

Regardless of their own perceptions of the situation, it is clear that with each subsequent generation, the possibility of being better off than your parents is diminishing. What can be done to fix this problem, to prolong the reality that once was the American Dream? The first suggestion of many economists is to make higher education a venue based more on meritocracy, opposed to legacy and familial connections. A web site called IvySuccess wrote that:

The Wall Street Journal recently put a statistical face on alumni clout in admissions. Children of graduates make up 10 to 15 percent of incoming classes at most Ivy League schools, according to the Journal. Harvard accepts 40 percent and Princeton accepts 35 percent of legacies but only 11 percent of all applicants. The University of Pennsylvania rakes 41 percent of legacy applicants yet only 2 1 percent overall. At Notre Dame, nearly a quarter of students are children of graduates.

How are non-legacy applicants supposed to compete with that? The Economist column cited earlier also states that “access to college is increasingly determined by social class. The proportion of students from upper-income families at the country's elite colleges is growing once again, having declined dramatically after the second world war. Only 3% of students in the most selective universities come from the bottom income quartile, and only 10% come from the bottom half of the income scale.” Another option, in addition to making college admissions based more on meritocracy is to create programs for the poor and less fortunate, such as child care and job training.

 

Aside from higher education reform, another option for making change in the social mobility possibilities in this country, as suggested by The New York Times, is to direct more of the country’s tax cuts toward the middle-class. We, as a country, have to get away from the right’s love of supply-side economics and tax cuts for the rich. Instead of putting more money into the pockets of the rich, give more money back to the men and women who are struggling to get by, pay for health care, save for retirement etc. Such a move may not move a middle class family into the upper middle class, but it would make living and existing in the middle class more bearable. And THAT would be real progress.