The Dual Promise of the American Dream — and Why It’s Worth Defending

By Scott Winship

Sunday, January 29, 2023

 

The American Dream is a dual promise — that life should be better for each generation, and that everyone should have a chance to achieve their aspirations if they work hard and play by the rules. But the way that too many of today’s progressives and conservatives talk about opportunity ends up hopelessly confusing our policy debates.

 

Is American life better today than it was for past generations? The answer depends on whether our yardstick measures economic progress or social conditions. Consider economics first. Rising populism on both the left and the right has spread the declensionist view that the typical American is worse off economically than in previous generations.

 

This view is simply wrong. Whether the metric is the hourly or annual earnings of men or women (see Figures 7, 10, and 11), household income (see Exhibits 3 and 18), or adult or child poverty, things have never been better in the United States. Assessing wealth trends is complicated by several factors, but recent generations are on track to accumulate as much wealth as earlier ones. The share of Americans who make more than their parents did has declined, but that was almost inevitable, given that the starting point compares parents in the Depression to grown children in the postwar boom. And even as it has declined, it remains high (see Figure 4), has fallen less than initially believed (see pages 34–41), and seems to be rising again (see Figure 1).

 

How the War on Poverty Is Going: Material vs. Social Deprivation

Notes: Poverty estimates from Burkhauser, Corinth, Elwell, and Larrimore (2021), Figure 9, https://www.nber.org/system/files/working_papers/w26532/w26532.pdf. Child living arrangement estimates are unpublished but from analyses in Winship (2022), https:/

Economic problems do exist, but they are often poorly understood. While the pay of everyday men and women has been rising healthily for nearly 30 years, productivity growth — the engine of wage growth over time — remains lower than it was during the mid 20th century. Greater technological innovation — more computers and robots — would help, not worsen, the problem. Men’s employment has fallen, but about three-quarters of the decline has occurred among men who say they do not want a job (see Figures 13 and 15). Rather than trade or low wages driving this trend, the increasing accessibility and generosity of federal disability benefits is implicated.

 

Consider next the other aspect of the American Dream’s health: Is social life better today than it was in the past? Does anyone believe so?

 

Family disruption has become the norm for children, but family connections have weakened in other ways as well. By most measurements of “associational life” — what we do together — the U.S. has seen a deterioration over the past half century. We do less with our neighbors, we’re less civically engaged, we spend less time with coworkers outside of work, we are less involved in religious activities, and our trust and confidence in a variety of institutions is lower. Technology has given us new ways to maintain relationships remotely and create communities with people we’ve never met. But it has also made our personal relationships more remote and encouraged incivility toward people we’ve never met.

 

Not only do we tend to neglect social-capital disparities and declines versus economic challenges; we also blame economic challenges for our rising social poverty and inequality. This does not square with the economic facts. Unfortunately, it seems more likely that our social problems stem from the rising affluence of the nation. This has afforded us the freedom to need others less, to abandon pro-social norms and bourgeois morality, to prioritize professional and material pursuits while neglecting our communitarian needs, and to weave a poorly designed safety net that discourages upward mobility.

 

Where the American Dream is ailing — or, simply continues to be out of reach for too many people — is in regards to its second promise: the ability to achieve one’s aspirations. The United States continues to have a general problem with upward mobility out of poverty and a specific problem of persistently large black–white social-mobility gaps. If a person is born at the bottom, they should be able to transcend their origins so they are not still at the bottom in adulthood. For black Americans there is the added challenge of avoiding falling to the bottom if one starts in the middle. The golden promise of the American Dream is tarnished by the embarrassing fact that these problems have persisted for a half-century or more.

 

A less confused politics would worry far more about upward intergenerational mobility out of poverty and about social poverty than about what this year’s poverty rate is. That would require liberals to abandon their current emphasis on simply giving people cash and to trust more in the American economy to deliver prosperity. It would require conservatives to devote far more time and attention to the problems of the most disadvantaged Americans and to prioritize finding ways for government — including the federal government — to help poor kids so they are ready to forge their own opportunities on reaching adulthood.

 

“Artificial Weights”: Early Disadvantage Persists

Note: “Most-Disadvantaged” means either (1) children entering kindergarten in fall, 2010 whose parents were in the bottom fifth of a socioeconomic status measure based on education, occupation, and income or (2) children whose parents were in the bottom

Earlier this month, the American Enterprise Institute launched the American Dream Initiative, an organization-wide effort to strengthen the Dream and increase opportunity throughout the nation. For my part, I’ll be running the new Center for Opportunity and Social Mobility alongside Kevin Corinth, the Center’s new deputy director — producing work on intergenerational mobility, poverty, and social capital. It will also be a home for new research and policy projects focused on opportunity.

 

We hope to bring a conviction to policy debates that the American economy is strong, but we need more dynamism and smarter public investment to raise living standards and increase mobility. Helping the disadvantaged requires attention to the ways that policies affect the social influences and social resources of poor kids. It requires worrying about unintended consequences and incentives. And it requires well-delineated roles for federal, state, and local government and civil society.

 

Policymakers should balance fiscal responsibility and the recognition that investments — real investments rather than transfers dressed up as investments — can save money in the long run. They should emphasize personal agency but acknowledge structural and historical barriers to upward mobility. They should not let the failures of Head Start justify defeatism about closing the large socioeconomic gaps in school readiness that exist when kids enter kindergarten.

 

The American Dream is nothing if not optimistic. Our politics have become hostage not only to polarization but also to pessimism. A reform conservatism can revive the promise of the Dream for those kids facing long odds who deserve our help (which is to say, all of them). Helping the “lost Einsteins” and others who never come near their potential will promote values of self-reliance and independence (we don’t expect children to be either), strengthen the economy, renew optimism in the Dream, and create a more just society.

 

Abraham Lincoln, on the first Fourth of July of the Civil War, asserted in an address to Congress that “the leading object” of the federal government was “to elevate the condition of men; to lift artificial weights from all shoulders; to clear the paths of laudable pursuit for all; to afford all an unfettered start and a fair chance in the race of life.” Let that be the credo of a new reform conservatism.