Elmgreen and Dragset, “Social Mobility (Staircase)” (2005)
The American Dream is often used to disprove the existence of a class structure in the United States. It is predicated on the idea that class mobility exists, that each succeeding generation will be better off economically than the previous generation.
So, how is that dream faring?
According to a recent report by the Pew Charitable Trusts, Pursuing the American Dream: Economic Mobility Across Generations, the dream gets a mixed review. While a majority of Americans exceed their parents’ family income and wealth, the extent of their absolute mobility gains is not always enough to move them up the economic ladder, and the results are different for groups at different points on the ladder.
Here are some of the key results with respect to income:
- Eighty-four percent of Americans have higher family incomes than their parents did.
- Those born at the top and bottom of the income ladder are likely to stay there as adults. More than 40 percent of Americans raised in the bottom quintile of the family income ladder remain stuck there as adults, and 70 percent remain below the middle.
- Only 4 percent of those raised in the bottom quintile make it all the way to the top as adults, confirming that the “rags-to-riches” story is more often found in Hollywood than in reality. Similarly, just 8 percent of those raised in the top quintile fall all the way to the bottom.
As Catherine Rampell explains,
The median person in the panel today earns a family income of $51,177, whereas the comparable figure from a generation ago was $27,036 after adjusting for inflation. You can see similar bumps upward for the typical family in other quintiles, and that the very highest earners got the biggest raises.
The median family in the top quintile earned $49,075 a generation ago, and $111,115 today, an increase of 126 percent in inflation-adjusted terms. That’s a much bigger raise, no doubt, but at least every income strata saw its earnings rise.
Here are some of the key results concerning mobility with respect to wealth:
- Only 50 percent of Americans have greater wealth than their parents did at the same age.
- Seventy-two percent of Americans whose parents were in the bottom fifth of the wealth ladder and 55 percent of those whose parents were in the middle quintile exceed their parents’ family wealth as adults.
- Sixty-six percent of those raised in the bottom of the wealth ladder remain on the bottom two rungs themselves, and 66 percent of those raised in the top of the wealth ladder remain on the top two rungs.
Again, here’s Rampell:
Unlike with income, there were not across-the-board gains for wealth. The median person in the poorest quintile has a family net worth that is 63 percent less than that of his counterpart a generation ago: $2,748, versus $7,439.
There were similar drops in wealth for the next two socioeconomic strata.
On the other hand, the top fourth and fifth quintiles by wealth have gotten richer.
The median family in the top socioeconomic class today (i.e., the family at the 90th percentile) is worth $629,853, compared to $495,510 in the last generation. That’s a 27 percent increase in the size of the median fortune in the top income stratum.
In other words, compared to the last generation, wealth has been become more concentrated in the hands (and bank accounts and houses) of the richest Americans.
The American Dream never did successfully do its work to undermine the idea that the United States has a class structure. And now, when the poor are becoming poorer and the rich richer, it’s become the impossible dream.