The concept that every individual deserves the freedom to prosper has been a powerful American ideal since the founding of our nation. America is at its best when the promise of "life, liberty and the pursuit of happiness" is honored and expanded.
The American Dream faces challenges in each generation. The current sluggish economy threatens hopes for lasting and sustainable prosperity and the Great Recession pummeled the net worth of America's households.
Consequently, debates about the American Dream are front and center on this year's campaign trail. President Barack Obama has emphasized that those who work hard and play by the rules should have a fair shot at prosperity. The presumptive Republican rival for the presidency, former Massachusetts Gov. Mitt Romney, has stressed similar themes, emphasizing the importance of personal responsibility, education and family as keys to joining and staying in the middle class.
This year's discussion of economic opportunity, however, seems particularly laced with concerns about fairness and equality. Obama and his supporters have made Romney's career and his personal wealth a target of populist concern about a widening gap between the ultra-rich and everyone else. And as scholars look closely at the issues of economic inequality and mobility, there are indeed troubling indicators.
For example, a child born into a prosperous family (the top 20 percent) is more than twice as likely to end up in the middle class or above as a child born into a family from the bottom 20 percent. Black families remain stuck at the bottom of the income scale, with 49 percent of black families in the bottom 20 percent (compared with 15 percent of white families). All of this comes from a report about income equality and economic mobility produced by the Pew Charitable Trusts, "Pursuing the American Dream," that is discussed at length in a report by Michael DeGroote in today's Deseret News.
But the positive indicators in the report outweigh the bad. By comparing the income of Americans in their 40s with that of their parents at the same age in the late 1960s and early 1970s, the report shows that most Americans (84 percent) earn more than their parents in absolute, inflation-adjusted terms.
And economic mobility appears to be both dynamic and explainable. More than half of those born into poorest families (57 percent) find themselves in higher income classes, with college education explaining the greatest leaps. Conversely, a similar percentage of those born into the richest families fell from affluence, although college education seems to provide a backstop against downward mobility.
Moreover, "the inequality of personal well-being is sharply down over the past hundred years," according to economist Tyler Cowen. What Cowen means is that the vast majority of Americans have roughly equal access to basic sanitation, clean food, medicine, transportation and even technical innovations and entertainment on a scale unthinkable just one century ago.
With absolute prosperity improving across generations, continued social mobility still in play, and broad economic growth and technical improvements supporting overall well-being, is all well with the American Dream?
Several stubborn structural trends trouble us.
One concern is the stagnation in wage growth for the median worker since the 1970s. Although the Pew report found most Americans making more than their parents, other data show that income growth for non-wealthy families has been modest at best, and that for males, median wages have fallen during this period.
Another concern relates to the correlation between wealth and family structure. Stable marriage is increasingly an attribute of the wealthiest Americans and an institution absent in the lives of the poorest Americans. The continued dissolution of marriages and the explosion of unwed childbearing directly threaten lasting prosperity.
Finally, the issues of inequality seem to be exacerbated by excessively high returns to the financial sector. "From 1973 to 1985," writes Simon Johnson, "the financial sector never earned more than 16 percent of domestic corporate profits." During the first decade of the 21st century, however, Johnson notes how the financial sector's portion of profits reached 41 percent.
But none of these concerns has one simple fix. How can companies increase wages in the face of global competition? How can communities successfully inculcate family values in a permissive and sexualized culture? How can one cultivate genuinely competitive enterprises in a sector that is purposefully protected from failure through regulation, insurance and bailouts?19 comments on this story
Writing in the 1830s about America, Alexis de Tocqueville said, "Among democratic peoples new families continually rise from nothing while others fall, and nobody's position is quite stable." That dynamic instability can be exhausting, but it should also be both inspiring and accessible.
We regret that this year's debate about the American Dream has become so uncivilly personalized. Nonetheless, we welcome a robust, open and honest debate about how to expand the opportunity for all to prosper if it can add light, rather than mere heat, to this fundamental, and fundamentally American question.