Where is the American dream now?

A lot of Americans tell pollsters they fear the American dream is dead. And depending on how you define "American dream," the data supports that concern — up to a point. Doubts about upward mobility and a sunnier tomorrow are nothing new: Polls show Americans also lost faith in the American dream during the early 1990s and mid-2010s, for example. But this bout of pessimism may be something new. Just what is the American dream, and what kind of state is it in today?

What is the American dream?

David Leonhardt of The New York Times traces the phrase back to historian James Truslow Adams, who wrote in his 1931 book "The Epic of America" that the American dream is "of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement," and "regardless of the fortuitous circumstances of birth or position."

Today the American dream is generally understood to mean that the U.S. is an upwardly mobile society where one generation can do better financially than the last with the aid of hard work and perseverance.

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Adams was writing at the height of the Great Depression. His American dream concept is aspirational, and a decade after he published "The Epic of America," the American dream was coming true. Americans born in 1940 had a 92% chance of obtaining a higher household income than their parents — that is, it was a near certainty this cohort would live out the American dream, Leonhardt says, citing research by Harvard economist Raj Chetty.

But Americans born in 1980 have only a 50-50 shot at doing better than their parents, Chetty found. Leonhardt calls this the Great American Stagnation.

Why do Americans think the dream is dying?

The numbers, to some extent, speak for themselves.

A typical U.S. family had a slightly lower net worth in 2019 than a typical family in 2001, Leonhardt reported in his new book about the fading of the American dream, "Ours Was the Shining Future." "There has not been such a long period of wealth stagnation since the Great Depression," he wrote. Former Labor Secretary Robert Reich added at Substack that "the earnings of the typical American have barely budged (adjusted for inflation)" over the past 40 years, while the compensation for CEOs of large corporations has skyrocketed to 300 times the pay of their typical worker, from 20 times in the 1950s and '60s. The wealthiest 1% of Americans now bring home more than 40% of the country's total income, up from 10% in the 1950s and '60s, and they control 31% of the nation's wealth while the bottom 50% has only 2.5%.

"Income and wealth inequality have both soared" in America, but the "clearest sign of our problems" is the "stagnation of life expectancy for working-class people," Leonhardt argued at the Times. "In 1980, the U.S. had a typical life expectancy for an affluent country," but now it ranks lower than its peers and even many poorer countries.

"These kinds of changes in our economy have led a lot of people to express frustration about this being a country where it's no longer easy to get ahead, even through hard work," Harvard's Chetty said at an Oct. 18 forum on "Education, Elitism and Economic Opportunity."

In fact, an Oct. 19-24 Wall Street Journal/NORC poll found that only 36% of voters said the American dream — "that if you work hard you'll get ahead" — still holds true, down from 53% and 48% in similar polls in 2012 and 2016, respectively. A 45% plurality of respondents said that notion held true once but not anymore. An NBC News poll conducted Nov. 10-14 found that a record-low 19% of voters said they feel confident life for their children's generation will be better than for their own generation, while 75% were not confident their children will be better off.

This pessimism about the American dream reflects "a mix of economic and social data that show broad improvement in living standards over time, but also challenges for workers," the Journal suggested.

The U.S. is coming off a year of high inflation and the rising borrowing costs from the Federal Reserve's aggressive moves to fight inflation by slowing economic growth. The rising interest rates have hit one big marker of the American dream — home ownership — especially hard. High mortgage costs mixed with low housing inventory and elevated prices have put that dream out of reach for a sizable number of Americans.

What else is eroding the American dream?

Soaring wealth and income inequality are probably the main fuel for the belief that the American dream is dying. Also, despite America's reputation as a land of opportunity, "there is less movement up and down the economic ladder here than in many other countries," a 2022 Brookings Institution report found. In America today, "wealth inequality is high. And wealth status is sticky," and this combination creates "sharp class divides which are at odds with the American dream."

Leonhardt primarily blames this stratification on the restructuring of the U.S. economy, from the democratic capitalism that helped create America's large middle class, to the laissez-faire "greed is good" policies that replaced it starting in the 1980s. And thanks to political shifts — Democrats, increasingly college-educated and socially liberal, haven't been able to win enough power to tip the economy back in the other direction, and Republicans aren't interested — "there is no longer a mass movement focused on improving economic outcomes for most Americans," he wrote in "Ours Was the Shining Future." "The country's largest activist groups, on both the left and the right, are focused on other subjects."

The "conventional explanation" for the decline of the American dream also posits that "globalization and technological change have made most Americans less competitive," Reich argued, but the larger cause is "the increasing concentration of political power in a corporate and financial elite" that have spent years "actively reorganizing the market for their own benefit" — and hoping you, the average-ish American, don't notice. 

At the same time, "centers of countervailing power that between the 1930s and 1980s enabled America's middle and lower-middle classes to exert their own influence — labor unions, small businesses, family farms and political parties anchored at the local and state levels — have withered," Reich added. Americans correctly perceive that "our economic and political system" is now "rigged," and "when most people stop believing they and their children have a fair chance" at the American dream that also damages America's social cohesion.

Can it be revived?

If "the American political system helped create today's problems," then surely "the American political system can solve them," Leonhardt wrote at the Times. The American dream was made real largely by organized labor, civil rights crusaders and other "often grass-roots political movements" that steadily nudged the government into creating the America they envisioned. If the revitalized labor movement and other groups representing the bottom 90% of Americans can coalesce into a "mass movement organized around the goal of lifting living standards" for the middle class and working class, he added, it "might well succeed. It has before."

American history "provides some direction as well as some comfort," Reich agreed, pointing to three specific periods when America successfully "readapted the rules of the political economy" to constrain "the political power of wealthy minorities at the top": the Jacksonian 1830s, turn-of-the-20th-century progressive reforms and the New Deal 1930s.

Are there other definitions of the American dream that show it in better shape?

The path to reviving the American dream depends on which dream you are trying to save. And it may not even need resuscitation, depending on whom you ask. 

An Axios-Ipsos Latino Poll from May 2022 found that 61% of Latinos agreed that if they work hard, they can achieve the American dream. That's because "the American dream is of individual upward mobility, not social progress toward uniformity," John Early and former Sen. Phil Gramm (R-Texas) wrote at the libertarian Cato Institute in January 2023. And that "American dream is alive and well." Three recent studies, they said, suggest that the "vast majority" of U.S. adults still "have higher income than their parents did." 

For many people, "the American dream is not about money or getting ahead in life," but rather "living your life to the fullest," Gabriel Nadales argued at The Hill. He pointed to a 2019 American Enterprise Institute study which found that only 16% of respondents said the American dream was to become wealthy, while 85% defined it as "the freedom of choice in how to live one's life." And that same poll, he added, found that "82% of Americans believed they were on their way to or had already achieved the American dream."

Look, "it is better to be born rich, brilliant and beautiful," Early and Gramm conceded, "but poor, ordinary and homely people succeed in America every day."