What happened to American Dream?

It would be comforting to conclude the dashed dreams of Amanda Wheless were a result of timing.

The young woman, with a bachelor’s degree in elementary education, entered the job market just as the recession hit. Faced with falling revenue, Alabama schools were cutting jobs rather than adding them. With admirable resolve, the Decatur resident adjusted. She put her dreams on hold, working instead at a coffee shop and now a car-rental store.

As a story in Sunday’s edition of The Decatur Daily explained, the frustrating experience of Wheless is commonplace in the economic slump that began with the 2008 recession. Half the jobs lost in the Great Recession were middle-class jobs. Seventy percent of the 3.5 million jobs created in the nation’s slow rebound are in low-paying industries.

Wheless is now struggling on the front end of her career, but she and most Americans also will struggle on the back end. The Center for Retirement Research, using Federal Reserve data, estimates that 53 percent of American workers 30 and older will be unprepared for retirement. In 2001, only 38 percent of Americans faced declining living standards in old age. In 1989, 30 percent faced that risk.

The average household has a $57,000 deficit in retirement savings, according to a recent U.S. Senate report.

While the recession exacerbated the problem, it did not start it. Since about 1970, Americans at all but the top income levels have seen a steady decline in real income. A few decades ago a family with one income earner could make it into the middle class. Now both parents typically have jobs, and the percentage of those families making it into the middle class is falling.

This trend has continued in times of deregulation and low taxes. High taxes and heavy regulatory burdens have not changed it. Except for an elite few, American workers are going backwards. They are less likely to be able to purchase a house and they are less likely to be able to send their children to college. Income mobility, a hallmark of the American Dream, has dropped as inequality of wealth and income have grown.

The solutions will not be simple, but America needs to pursue them. Low taxes and deregulation have not been successful at returning the ladder of income mobility to the motivated poor, but high taxes and clumsy social welfare programs have not done much better.

The goal needs to be to restore opportunity to the poor so they have a shot at meaningful participation in the economy. Health-care reform, pre-kindergarten programs and affordable colleges provide opportunity without fostering dependence. If the nation acknowledges the problem and sheds ideological barriers, even better strategies may emerge.

America has never been a nation that guaranteed success to its citizens. For previous generations, though, it was a nation that prided itself on expanding opportunities for those willing to work for their dreams. As a nation, America needs to again embrace its determination to offer expanded opportunity for each succeeding generation. Or it needs to acknowledge the American Dream, once so central to the U.S. identity, is a historical artifact.

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Filed under education, Income inequality, Poverty, Recession

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