Is the American dream really dead?
Research shows that poor people in the US are 20 times less likely to believe hard work will get them ahead than their (poorer) Latin American counterparts – with white Americans particularly pessimistic. What’s driving their despair?
By Carol Graham
Jun 20 2017
The United States has a long-held reputation for exceptional tolerance of income inequality, explained by its high levels of social mobility. This combination underpins the American dream – initially conceived of by Thomas Jefferson as each citizen’s right to the pursuit of life, liberty and the pursuit of happiness.
This dream is not about guaranteed outcomes, of course, but the pursuit of opportunities. The dream found a persona in the fictional characters of the 19th-century writer Horatio Alger Jr – in which young working-class protagonists go from from rags to riches (or at least become middle class) in part due to entrepreneurial spirit and hard work.
Yet the opportunity to live the American dream is much less widely shared today than it was several decades ago. While 90% of the children born in 1940 ended up in higher ranks of the income distribution than their parents, only 40% of those born in 1980 have done so.
Attitudes about inequality have also changed. In 2001, a study found the only Americans who reported lower levels of happiness amid greater inequality were left-leaning rich people – with the poor seeing inequality as a sign of future opportunity. Such optimism has since been substantially tempered: in 2016, only 38% of Americans thought their children would be better off than they are.
In the meantime, the public discussion about inequality has completely by-passed a critical element of the American dream: luck.
Just as in many of Alger’s stories the main character benefits from the assistance of a generous philanthropist, there are countless real examples of success in the US where different forms of luck have played a major role. And yet, social support for the unlucky – in particular, the poor who cannot stay in full-time employment – has been falling substantially in recent years, and is facing even more threats today.
In short, from new research based on some novel metrics of wellbeing, I find strong evidence that the American dream is in tatters, at least.
White despair, minority hope
My research began by comparing mobility attitudes in the US with those in Latin America, a region long known for high levels of poverty and inequality (although with progress in the past decades). I explored a question in the Gallup world poll, which asks respondents a classic American dream question: “Can an individual who works hard in this country get ahead?”
I found very large gaps between the responses of ‘the rich’ and ‘the poor’ in the US (represented by the top and bottom 20% income distributions of the Gallup respondents). This was in stark contrast to Latin America, where there was no significant difference in attitudes across income groups. Poor people in the US were 20 times less likely to believe hard work would get them ahead than were the poor in Latin America, even though the latter are significantly worse off in material terms.