- Dec 5, 2010
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The 'American Dream' of Upward Mobility is Broken
A poll conducted by the PEW Charitable Trusts in 2009 found that about three-quarters of Americans strongly held the view that the American Dream meant “being free to accomplish anything with hard work,”and about 90% said hard work and having ambition were either essential or very important to getting ahead in life. (Economic Mobility Project 2009).
Yet, according to recent research, the United States has far less mobility and equality of opportunity today than the European Union or other OECD countries.
A lower elasticity means a society with more mobility. An intergenerational elasticity in earnings of tells us that if one father makes 100% more than another then the son of the high income father will, as an adult, earn 60% more than the son of the relatively lower income father. An elasticity of 0.2 says this 100% difference between the fathers would only lead to a 20% difference between the sons.
One of the reasons for lower US mobility is that the ladder of opportunity has become much harder to climb – because the rungs of the ladder have grown further apart. This is evidenced by the rising levels of income and wealth inequality. Currently, those in the top 20% of the income distribution earn nearly nine times more than those in the bottom 20%. This difference is far greater than in the European Union or the United Kingdom. Wealth inequality is even more skewed. In the United States, the top 5% of the population own three-quarters of the entire financial wealth of the country, while the bottom 60% possess less than 1%.
In addition, the United States has frequently viewed poverty and inequities through the lens of race and ethnicity. Poverty is often seen as a “black problem” rather than as an “American problem”. Race has been used to divide poor blacks and whites from seeing their common economic interests. As President Lyndon Johnson once explained to an aide in 1960, “I’ll tell you what’s at the bottom of it. If you can convince the lowest white man that he’s better than the best colored man, he won’t notice you picking his pocket. Hell, give him somebody to look down on, and he’ll empty his pockets for you.”