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Moving on up: Can the American Dream still become a reality today?

Published: Saturday, July 21 2012 5:53 p.m. MDT

The American Dream has always been an amorphous idea, meaning different things to different people, says Mark Edwards, the executive director of Opportunity Nation, a nonpartisan campaign to increase economic mobility. "In the broader sense, it is the idea that no matter who you are, no matter what your background is, that if you work hard you should be able to improve your lot in life and take care of you and your family."

Politicians across the political spectrum worry that ideal may be under threat. Former Republican presidential candidate Rick Santorum argued last fall that economic mobility was actually easier to achieve in many parts of Europe than it is in America, a position supported by an article in the National Review, a conservative magazine.

According to a 2006 study by Miles Corak, Germany is 1.5 times more mobile than the United States. Canada is almost 2.5 times more mobile. Denmark is three times more mobile. A similar study that year by Swedish economist Markus Jantti found similar results. Of those born at the bottom in Denmark, only 25 percent are stuck there. In Britain it is 30 percent. Where Pew found that only 4 percent born at the bottom in America will make it into the top fifth of income, Jantti found 14 percent of Danish people in the bottom rise to the top fifth in their country.

Edwards agrees there is a problem — and it isn't just comparing the U.S. to other countries. "The American Dream was more accessible to people 40 or 50 years ago than it is today," he says.

But long-term historical data that goes back to the first half of the last century or earlier is not easy to find, says Erin Currier, project manager at Pew's Economic Mobility Project.

"The academic community doesn't have a clear feeling or determination that economic mobility has changed over time," she says.

Since hard data similar to Pew's 1960s/2000s studies isn't available, people look at the social and economic issues known to affect opportunity. For example, Edwards looks at the level of education and training people needed to get a good job today compared to four or five decades ago. "There was a time, not that long ago, when simply having a high school degree was enough to give you access to a job, a career, a lifestyle," he says. "But those kinds of jobs are much less plentiful than they were 30 years ago. That is a real structural change."

Edwards also points to the demographic changes in families, such as more children being born to single mothers. He says he isn't making a moral judgement but a structural observation. "It is a significant change," he says.

The most troubling aspect of the new Pew study, researchers say, is what it says about those at the very bottom: 43 percent will stay there, and those that get out won't make it very far. Seventy percent only make it to the next rung in the ladder, meaning their household income never rises above $44,000 a year.

"That really does call into question Americans' perception of equality of opportunity and what makes our country unique," Currier at Pew says.

Of those who start at the top, 40 percent are locked in at the top. Experts call this persistence at the top and bottom ends "stickiness."

"It is particularly acute now because if you marry 'stickiness' with increasing income inequality you essentially have a caste system," says Edwards at Opportunity Nation. "You don't have motion. You have real inequality. That is just not what this country is founded on. That's not the best that we have to offer."

But Currier says this is a "glass half empty" view because it only captures "relative mobility" — measuring how people stack up compared to their parents.

A concept called "absolute mobility" provides a fuller picture, Currier says. As she explains it, if relative mobility is like a ladder or stairs, absolute mobility is more like an escalator with everybody moving up together. "As the economy grows and gets stronger, it can propel a lot of people up along the income distribution," Currier says. "And that is, in fact, what the data show."

And what the data shows is that as absolute income has increased, Americans across income levels make more than their parents, and this is even true at the bottom.

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