Opinion, Berkeley Blogs

American Dream, twisting

By Claude Fischer

white picket fence

A political solicitation from the Democrats that I just got reads, “We have to do everything we can to make sure that [the] opportunity to pursue the American dream is still possible today.” The 2012 Republican platform highlighted its program for “Restoring the American Dream.” “The American Dream” seems often under threat and just out of grasp.

white picket fence

(Those three words, by the way, emerged as a catchphrase only in the 1930s. Now, the Library of Congress lists 900 book titles using it, the first published in 1934, Religion and the American Dream, and the last, scheduled for 2014, Between Islam and the American Dream.)

Mark Rank, Thomas A. Hirschl, and Kirk A. Foster have a book coming out next spring, Chasing the American Dream: Understanding What Shapes Our Fortunes, which helps clarify what average Americans hear when they hear the words, “The American Dream.”

The book also helps clarify why so many Americans feel that the dream is drifting out of reach. Whether Americans attain that dream, Rank and colleagues say, is increasingly subject to — borrowing from Bob Dylan – a “simple twist of fate.” And finally, the forthcoming book may also help clarify why Americans are not politically mobilized to save that Dream.

Walking the tightrope

Rank and his colleagues first give us a rich description of what average Americans mean by “The American Dream,” drawing on long interviews with 75 respondents, several focus groups, and others’ survey studies. The Dream, they conclude, has three basic components: one, freedom – “the opportunity to make your life into what you’d like it to be”; two, economic security – not, the authors insist, wealth or glittery consumption, but stability; and three, optimism – confidence that one and one’s children will do better.

Rank and his colleagues then show how at least the last two elements of the Dream are under increasing threat. Drawing largely on the PSID, a survey that has been following thousands of families since 1968, they show that about 80 percent of Americans experience, between age 25 and age 60, at least one year of economic insecurity – poverty, getting welfare , or having an unemployed head of the family.

Over one-third of Americans experience at least one these deprivations for five years or more between ages 25 and 60. Moreover, the proportion of Americans going through that insecurity has grown over the last 40 years. A closer look shows that what has changed since the 1970s is not poverty rates for 25-to-60-year-olds, but that more Americans are cycling through short bouts of economic insecurity.

A just-released study by Marah A. Curtis and colleagues in Demography illustrates how a twist of fate can be so financially consequential. Using the large “Fragile Families” survey of at-risk soon-to-be mothers, the researchers looked at what happened when these women were hit by a health accident — having a baby born with a random, critical defect like Downs Syndrome. That event alone, other characteristics of the mothers taken into account, increased the odds that mother and child would be homeless three years later. Homelessness was especially likely to follow birth defects if the family lived in urban areas with high housing costs.

A similar study found that such a birth raised the chances of the baby’s father being convicted of a crime in the subsequent three years (presumably because of his greater sense of desperation). These studies reinforce the point of a 2000 book, The Fragile Middle Class, by Teresa Sullivan, Elizabeth Warren – yes, that Elizabeth Warren – and Jay Westbrook: Sudden misfortunes – very often, medical crises – push stable middle-class families into bankruptcy.

Rank and colleagues review the evidence that the third element of the Dream, progress for self and children, also has been undermined. Although Americans tend to be optimistic about their families’ futures, chances of upward mobility are lower here than elsewhere in the western world and have been declining in the last few decades (see also here).

This is pretty bleak news. (Side note: It seems that all the posts I write about economic trends these days are bleak, but the bleakness depends on the period under discussion. Looking at the last 40 years leads to depressing findings; looking back a century or more leads to cheerier findings.)

A brighter view

Rank and colleagues do not consider the critiques some economists have of such doleful descriptions of economic woes (e.g., here). These critics argue that the downbeat analyses do not sufficiently take into account increases in wage substitutes for workers, like employer-paid insurance and other fringe benefits, as well as government assistance such as food stamps and the Earned Income Tax Credit, all of which make the fate of low-income Americans not as dire as depicted.

home for sale (foreclosure) sign

Moreover, they point out that the declining real costs of consumer goods have made elements of the good life – washing machines, air conditioning, computers, etc. – available to all but a few Americans. In the end, however, this positivity does not work. The big-ticket items of the American Dream – the security of health insurance, home ownership, and the promise of a college education for one’s children – have moved farther out of average Americans’ grasps even if they can now grab onto cheap smartphones.

Another set of findings in Chasing the American Dream are more positive – and perhaps help explain why public opinion has not rallied to the kinds of government interventionist policies that the authors propose at the end of the book. Many Americans, it turns out, also experience periods of affluence.

The same PSID data show that about half of Americans will, between the ages of 25 and 60, be in a household with at least $150,000 of income for at least one year; about 20 percent will experience five years with that much household income. There is just a lot of up-and-down movement over the course of Americans’ working years. Most, for example, experience at least one drop of $50,000 or more in household income. (It is not clear in Chasing the American Dream whether this volatility has increased, but it probably has.)

One implication of this accelerating yo-yo pattern is that Americans’ economic lives are more unpredictable than they used to be, making serious planning and restful nights that much harder to achieve. One political implication may be that, because many Americans have experienced briefly being poor and then emerging out of poverty and many have also tasted affluence even if briefly, sympathy for the chronically poor is that much harder to come by.

Cross-posted from Claude Fischer’s blog, Made in America: Notes on American life from American history.