The End of the American Dream?
by KevinApril 27th, 2006
The American Dream has always been some variation of if you work hard and play by the rules, you will be rewarded. If that was ever true, it is much less true today:
The likelihood that a child born into a poor family will make it into the top five percent is just one percent, according to “Understanding Mobility in America,” a study by economist Tom Hertz from American University.
By contrast, a child born rich had a 22 percent chance of being rich as an adult, he said.
“In other words, the chances of getting rich are about 20 times higher if you are born rich than if you are born in a low-income family,” he told an audience at the Center for American Progress, a liberal think-tank sponsoring the work.
Almost every industrial country affords more mobility than us, with the exception of the UK — the country that has the economic system closest to ours:
He also found the United States had one of the lowest levels of inter-generational mobility in the wealthy world, on a par with Britain but way behind most of Europe.
“Consider a rich and poor family in the United States and a similar pair of families in Denmark, and ask how much of the difference in the parents’ incomes would be transmitted, on average, to their grandchildren,” Hertz said.
And the system in general is no longer designed to assist social mobility. College tuition has been rising much faster than inflation for years, meaning that it is harder for poor and middle class kids to earn the education that now is almost a requirement for economic mobility:
A good rule of thumb is that tuition rates will increase at about twice the general inflation rate. During any 17-year period from 1958 to 2001, the average annual tuition inflation rate was between 6% and 9%, ranging from 1.2 times general inflation to 2.1 times general inflation. On average, tuition tends to increase about 8% per year. An 8% college inflation rate means that the cost of college doubles every nine years. For a baby born today, this means that college costs will be more than three times current rates when the child matriculates in college. This section of FinAid provides detailed information about the rate of increase of college tuition.
More and more working people are finding themselves without insurance:
The percentage of working-age Americans with moderate to middle incomes who lacked health insurance for at least part of the year rose to 41 percent in 2005, a dramatic increase from the 28 percent in 2001 without coverage, a study released on Wednesday found.
Moreover, more than half of the uninsured adults said they were having problems paying their medical bills or had incurred debt to cover their expenses, according to a report by the Commonwealth Fund, a New York-based private, health care policy foundation. The study of 4,350 adults also found that people without insurance were more likely to forgo recommended health screenings such as mammograms than those with coverage, and were less likely to have a regular doctor than their insured counterparts.
The lack of insurance means that people have o put off seeking treatment, which means that when they are forced to seek treatment they require more costly treatments, which drives them into debt.
People are running faster and faster every day just to stay in place. It gets harder for each generation to advance themselves. And the GOP thinks tax breaks for the wealthiest among us are the top economic priority. It is not. The top priority should be providing people with as level a playing field as possible. Without the ability for the talented and hardworking among all of us to rise to the top, the country suffers. And if I have to choose between a government that tries to help everyone get a leg up and one that helps Paris Hilton avoid paying taxes the decision is easy.
Good points Kevin - Bondad at dembloggers.com has made similar posts on this subject. But soemthing I think is being missed here is education is not the ticket to a decent job/career that it used to be. Unless one is looking for a job or field where a college degree is an absolute requirement, getting a degree is a waste of time and money. And most of the jobs being created in this “global” economy pay less and generally don’t require academic education. That, I think, is a huge factor in the shrinking middle class and the increasing difficulty of even getting there.
Let’s just take all the money away from everyone who has assets of $1 million or more and divide the assets evenly among the population. It is not right that some people have more money than others. If someone wants to work hard, achieve, and accumulate wealth, it is extremely selfish of him to want to keep his assets for himself and to want to pass it on to his children. His investment of his accumulated wealth should not be used to provide jobs so that others can produce and gain wealth. Of course, why bother to try to get to the top if when you get there socialists want to divide your hard earned gains among the “less fortunate?”?
So Fred, every single wealthy person in this country got that way TOTALLY by their own hard work - NO employees, NO government grants, NO tax breaks, NO subsidies, NO help from Daddy, NO assistance of any kind, right?
The reality of the matter, Fred, is there is no such thing as a totally independent self-made man - They do exist, but you could count them on one hand with fingers to spare.
And obviously the converse must be true - EVERY single person who doesn’t make a decent living is shiftless and uneducated, and just needs to work harder or get more education, right?
Our current president is a perfect example of our economic mobility: he was accepted into an Ivy-league school based on his academic record and intellectual acumen alone, not through family connections and donations. Through hard work and insightful decision-making he was able to increase the profits of an oil company he bought and managed, much to the delight of the company’s stock holders. (This fiscal responsibility and competence would pay off down the road when became president). And of course, through his uncontested land-slide victory in 2000, he won the White House. The rest is history.
Wordmonger Says:
So Fred, every single wealthy person in this country got that way TOTALLY by their own hard work - NO employees, NO government grants, NO tax breaks, NO subsidies, NO help from Daddy, NO assistance of any kind, right?
The reality of the matter, Fred, is there is no such thing as a totally independent self-made man - They do exist, but you could count them on one hand with fingers to spare.
And obviously the converse must be true - EVERY single person who doesn’t make a decent living is shiftless and uneducated, and just needs to work harder or get more education, right?
Fred: For a wordmonger, you don’t have a very good command of words. Everyone of your assumptions about what I have said is ludicrous. Of course, people have help. There is no such thing as a self-made man. If you are going to argue with something I say, at least argue with something I say, not what your fertile imagination comes up with.
Unless we live on Lake Woebegone, where all the children are above average, mobility among wealth percentiles is a zero sum game (relative wealth mobility). For every person that moves up, another must move down.
If the top 80% remain unchanged and the bottom 20% all attain a comfortable life (zero relative wealth mobility, significant absolute mobility), the population as a whole is much better off than if we have 100% relative wealth mobility and zero absolute mobility so that everyone born rich becomes poor and everyone born poor becomes rich.
I discount the importance of relative wealth mobility as a social goal, but I am very much in favor of enhancing absolute wealth mobility. And I believe Kevin has hit the most important factors regarding this in his blog.
Nice try Fred, but you oh-so-subtly implied every word I said. I just took your argument to its logical conclusion. It’s a conservative trick I’m getting weary of.
I implied no such thing. It’s a liberal lie I’m getting weary of.
Oh yes you did Fred - Conservatives do it all the time (Poor people are poor because they want to be, etc). You may think your you know what doesn’t stink but your farts give you away.
Wordmonger, why do you lie so much? Grow up.
Keep squirming Fred, and I’ll keep showing how ignorant and in denial you are.
Wordmonger: Keep squirming Fred, and I’ll keep showing how ignorant and in denial you are.
Fred: Don’t flatter yourself. You don’t have the intellectual ability to make me squirm. You have taken your own biases and prejudices and projected them upon me. That is dishonest.
I don’t have to flatter myself, Fred, Your intellectual capacity amounts to a pimple on mosquito’s rear - with enough room left over for the Chinese army.