By Robert J. Samuelson
Wednesday, November 28, 2007
Few phrases in our political vocabulary are more abused than "the American dream." The standards for achieving the dream have become so open-ended and expansive that, inevitably, we must fail. Does it mean becoming a homeowner? Enjoying increased living standards? Having "opportunity"? Rising above your parents' class? Achieving economic security if you "play by the rules"? Or all of the above -- and more?
It's a mushy concept that inspires endless debates over who's been cheated and why. What's lost in these noisy controversies is the bedrock reality that we're more prosperous than at any time in our history. But the selective and highly critical reading of economic and social trends distorts our vision. Consider as a case in point a well-publicized report from the Economic Mobility Project, a group established by the Pew Charitable Trusts.
"The dream that one can rise up from humble beginnings and achieve a comfortable middle-class living . . . transcends racial lines," the report begins. "But is this a reality for black and white families alike?" Well, no, it concludes.
The study compared the adult incomes of whites and blacks whose parents were middle-aged (average: 41) in the late 1960s. As adults, only 31 percent of the black children born into middle-income families had inflation-adjusted incomes exceeding their parents' at a similar stage of life. Meanwhile, 68 percent of the comparable white children had higher incomes than their parents. Somehow, the report said, middle-class black parents couldn't protect their children from downward mobility.
Press reports duly echoed the theme. "Middle-Class Dream Eludes African American Families," headlined The Post. The message: The already-small black middle class is in eclipse. The reality is different: Since the 1960s, the black middle class has steadily expanded.
Although blacks' economic status lags that of whites, the advances are still sizable. In 1972, only 6.2 percent of black households had incomes exceeding $75,000 in inflation-adjusted "2006 dollars"; in 2006, 16.8 percent did. Over the same years, the share of non-Hispanic white households with incomes above $75,000 went from 18.4 percent to 33.8 percent. Yet in 1972, the ratio of whites to blacks in this income bracket was 3 to 1; now it's 2 to 1.
Reconciling these apparently contradictory conclusions is easy. In the late 1960s, the black middle class was tiny. The group cited by Pew represented only about 8 percent of black children. Whatever happened to them has been overwhelmed by the gains of other black families. (A further drag on black gains is lower marriage rates, which often deprive families of a second earner. But that's not the fault of the economy.) Contrary to media coverage, the findings in three recent Pew studies qualify mostly as good news:
• When compared with their parents in the late 1960s, these families today have a median income that's 29 percent higher at $71,900 (and this understates gains in living standards, because families are about 25 percent smaller and the income figures exclude fringe benefits and non-cash government benefits).
• About two-thirds of today's adults have incomes higher than their parents did -- a result that is roughly similar for both blacks and whites (the children of the middle-income group of blacks were not typical).
• Almost 60 percent of the children born of the poorest families moved up the income distribution (23 percent into the second-poorest fifth and 6 percent into the richest fifth).
Indeed, the high degree of intergenerational economic mobility is Pew's most interesting finding. What happens at the bottom of the income scale also happens at the top. About 60 percent of children born of the richest fifth of parents do not themselves end up among the richest fifth; about 23 percent drop into the next-to-highest group and 9 percent fall to the bottom. Parents influence their children's destiny but do not determine it.
Everyone knows that economic inequality has increased in recent decades. The richest 10 to 20 percent of Americans have gotten richer faster than the rest. But the people at the top are not all the same people or even the children of the same people. This vindicates one version of the American dream. There is opportunity. People do move up -- in both total income and class rank. Economic success is not static.
But there's a rub. The possibility that their children will move down the economic ladder, in class position if not income, is one of the great anxieties that assault the vast middle class, even at its highest reaches. Mobility is a great thing, but it often comes at someone else's expense. As some rise in rank, others must fall. To some extent, the American dream is inherently an impossible dream because it cannot fulfill people's expectations of both opportunity and peace of mind.