Posts Tagged ‘American Dream’

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One of the most pernicious myths in the United States is that higher education successfully levels the playing field across students with different backgrounds and therefore reduces wealth inequality.

The reality is quite different—for the population as a whole and, especially, for racial and ethnic minorities.

As is clear from the chart above, the share of wealth owned by the top 1 percent has risen dramatically since the mid-1970s, rising from 22.9 percent in 1976 to 38.6 percent in 2014. Meanwhile, the share owned by the bottom 90 percent has declined, falling from 34.2 percent to 27 percent. And that of the bottom 50 percent? It has remained virtually unchanged at a negligible amount, falling from 0.9 percent to zero.

During that same period, according to the U.S. Census Bureau (pdf), the proportion of Americans aged 25 to 29 with a bachelor’s degree or higher rose from 24 percent to 36 percent. (For the entire population 25 and older, the percentage with that level of education rose from 15 to 33.)

So, no, higher education has not leveled the playing field or reduced wealth inequality. In fact, it seems, quite the opposite appears to be the case.

And that’s true, too, for racial and ethnic disparities in wealth. As William R. Emmons and Lowell R. Ricketts (pdf) of the Federal Reserve Bank of St. Louis have concluded,

Despite generations of generally rising college-graduation rates, higher education’s promise of significantly reducing income and wealth disparities across all races and ethnicities remains largely unfulfilled. . .rather than promoting economic equality across all races and ethnicities, higher education unintentionally has become an engine for growing disparities.

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Thus, for example, median Hispanic and black wealth levels decline relative to similarly educated whites as education increases until the very top. Moreover, only about 7 percent of black families and 5 percent of Hispanic families have postgraduate degrees, and wealth disparities remain large even there.

Darrick Hamilton and William A. Darity, Jr. (pdf), who participated in the same symposium, go even further. According to them, the United States has a fundamental problem in discussing wealth disparities according to race and ethnicity:

Much of the framing around wealth disparity, including the use of alternative financial service products, focuses on the poor financial choices and decisionmaking on the part of largely Black, Latino, and poor borrowers, which is often tied to a culture of poverty thesis regarding an undervaluing and low acquisition of education.

Thus, while they agree that a college degree is positively associated with wealth within racial and ethnic groups, it is still the case that it does little to address the massive wealth gap across such groups.

And yet the myth persists. American elites and policymakers still to choose to emphasize the economic returns to education as the panacea to address socially established wealth disparities and structural barriers of racial and ethnic economic inclusion.

The question is, why?

According to Hamilton and Darity, such a view

follows from a neoliberal perspective, where the free market, as long as individual agents are properly incentivized, is supposed to be the solution to all our problems, economic or otherwise. The transcendence of Barack Obama becomes the ideal symbolism and spokesperson of this political perspective. His ascendency becomes an allegory of hard work, merit, efficiency, social mobility, freedom and fairness, individual agency, and personal responsibility. The neoliberal ideology is not limited to race. It more generally places the onus on individual actions, and more broadly leads to deficiency narratives for low achievement, but this is especially the case when considering race and other stigmatized workers. Perhaps the greatest rhetorical victory of this paradigm is convincing the masses that implicit in unfettered markets is the “American Dream”—the hope that, even if your lot in life is subpar, with patience and individual hard work, you can turn your proverbial “rags into riches.”

And so the myth of college and the American Dream is perpetuated, while the unequal distribution of wealth—across the entire population, and especially with respect to ethnic and racial minorities—which has been growing for decades, continues unabated.

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Young Americans are caught between two contradictory messages. On one hand, they’re told to go to college, to maintain pace with new technologies and job requirements. On the other hand, they’re told to “get out”—because, for most, a college education is simply unaffordable.

The American Dream, for them, looks more and more like “the sunken place.”

The Institute for Higher Education Policy [ht: mfa] is the latest group to document the unaffordability of a college education. While students from the highest income quintile (from families earning around $160 thousand or more) can afford most of the more than 2,000 colleges studied, low- and moderate-income students (bringing in around $69 thousand or less) can only afford to attend a tiny percentage of those colleges.

The Institute bases its conclusion on an “affordability benchmark” (the so-called Rule of 10, the idea that 10-year savings plus part-time earnings should cover the entire cost of a four-year degree) compared to the net price of a college education (equal to the cost of attendance minus grant aid). They then illustrate their findings with ten student profiles: five dependent students representing a different income quintile, and possessing attributes based on national averages for students in their quintile (Sonja, Hakim, Ava, Sergio, and Maria), and five independent students characterizing the diverse array of personal and family circumstances among independent students (Anthony, Traval, Aneesa, Jon Sook, and Mohammed).

As readers can see from the figure at the top of the post, while the student from the highest income bracket could afford to attend 90 percent of colleges in the sample, the low- and moderate-income students with fewer financial resources could only afford 1 to 5 percent of colleges.

Colleges were most dramatically unaffordable for students near the bottom of the income distribution, including all five of the independent students. Out of more than 2,000 colleges, nearly half (48 percent) were affordable for only the wealthiest student (with a family income over $160,000) and more than one-third (35 percent) were affordable only for that student and the next wealthiest (with a family income over $100,000).

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Not only do working-class students face financial barriers in attempting to enroll in most colleges, which they can only afford by burying themselves and their families under mountains of debt. They’re also far less likely to complete their students, often because working long hours to finance their education gets in the way of their studies (not to mention all the other activities traditionally associated with being in college).

As the authors of the report conclude,

This inability for low-earners to afford an education or improve their station erodes belief in a nation founded on the rejection of entrenched social stratification.

The only question for the nation is, will this educational horror film have a happy ending?

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The American Dream has all but collapsed under the weight of growing inequality. It’s becoming increasingly difficult for the American working-class to sustain a decent standard of living, and their children are increasingly unlikely to be better off than they are.

But those who hang on to the American Dream—or at least the selling of that dream to others—believe that sending young people to the nation’s colleges and universities is the solution.

The problem, of course, is that even as enrollment in higher education has grown so has income inequality—and, with it, access to college remains profoundly unequal. The United States is therefore moving further and further away from being able to fulfill the American Dream.

According to a new study by Raj Chetty and the rest of the Equality of Opportunity Project team, while the number of children from low-income families attending college rose rapidly over the 2000s—both in absolute numbers and as a share of total college enrollment—the share of students from bottom-quintile families at four-year colleges and selective schools did not change significantly over the 2000s. Even at the Ivy-Plus colleges, which enacted substantial tuition reductions and other outreach policies during this period, the fraction of students from lower quintiles of the parent income distribution did not increase significantly.* They enroll more students from families in the top 1 percent of the income distribution (14.5 percent) than the bottom half of the income distribution (13.5 percent). And only 3.8 percent of students come from the bottom 20 percent of the income distribution.**

Even at the institutions of higher education with the highest mobility rates (with a high fraction of its students who come from the bottom quintile of the income distribution and end up in the top quintile)—for instance, SUNY-Stony Brook and Glendale Community College—the fraction of students from low-income families fell sharply over the 2000s. As a result, the average student from a low-income family now attends a college with lower success rates than in 2000. In short, the colleges that may have offered many low-income students pathways to success are becoming less accessible to them.

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As it turns out, the degree of income segregation across colleges is comparable to income segregation across census tracts in the average American city.

Contrary to the common perception that children interact with a more socioeconomically diverse group of peers when they reach college, colleges in America are just as segregated as the neighborhoods in which children grow up.

Now, it is true: the United States still has a large number of great working-class colleges. For example,

At City College, in Manhattan, 76 percent of students who enrolled in the late 1990s and came from families in the bottom fifth of the income distribution have ended up in the top three-fifths of the distribution. These students entered college poor. They left on their way to the middle class and often the upper middle class.

In fact,

the City University of New York system propelled almost six times as many low-income students into the middle class and beyond as all eight Ivy League campuses, plus Duke, M.I.T., Stanford and Chicago, combined.

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The problem is, the share of low-income students at at many public colleges has fallen over the last 15 years as state funding has plummeted. Working-class students, who remain shut out of the nation’s elite colleges and universities, are finding it increasingly hard to attend and complete their degrees at public institutions.

What we’re left with then is a system of higher education that, outside the elite schools, is not flush with cash and, as a result, is leaving “our young and beautiful students” with less and less access to a high-quality college or university education.

That’s why, continuing to promise the American Dream to the children of the working-class is the real American carnage.

 

*Ivy-Plus colleges include the eight Ivy League colleges (Brown, Columbia, Cornell, Dartmouth, Harvard, the University of Pennsylvania, Princeton, and Yale), the University of Chicago, Stanford University, the Massachusetts Institute of Technology, and Duke.

**At the University of Notre Dame, where I teach, 15.4 percent of students (for the 1991 cohort, approximately the class of 2013) had parents in the top 1 percent, while only 10 percent came from families in the bottom three quintiles.

I keep finding myself reminding relatives and friends that, when it comes to the pronouncements of mainstream economists (like Greg Mankiw) and presidential candidates (of which we’re now down to two, at least in terms of major political parties), there’s another America out there, which many of us only dimly view.

But every once in a while, we get a sense of what is going on, often through good reporting (in addition to, as Bill Moyers suggests, short stories, novels, and plays by working-class writers).

One example is the remarkable—and bone-chilling—article by Shane Bauer for Mother Jones. Back in 2014, Bauer went undercover at a private, for-private prison in Louisiana, working as a guard. Conditions at the prison were extraordinarily bad, for inmates and guards alike. Four months later he was found out, when a Mother Jones videographer was arrested while gathering footage nearby. The resulting essay is 35,000-word opus accompanied by a six-part video series (of which the first is at the top of this post). Basically, it’s a story of how the corporate search for profits led to a lack of resources in the cell blocks Bauer patrolled, while low wages created a constant turnover among employees. Inmates lived in overcrowded squalor and were routinely denied health care for serious psychological and physical sickness. And prison officials and guards resorted to the use of arbitrary force in the absence of of proper staffing and facilities.

Here’s a short excerpt (from chapter 3):

The walk is eerily quiet. Crows caw, fog hangs low over the basketball courts. The prison is locked down. Programs have been canceled. With the exception of kitchen workers, none of the inmates can leave their dorms. Usually, lockdowns occur when there are major disturbances, but today, with some officers out for the holidays, guards say there just aren’t enough people to run the prison. (CCA says Winn was never put on lockdown due to staffing shortages.) The unit manager tells me to shadow one of the two floor officers, a burly white Marine veteran. His name is Jefferson, and as we walk the floor an inmate asks him what the lockdown is about. “You know half of the fucking people don’t want to work here,” Jefferson tells him. “We so short-staffed and shit, so most of the gates ain’t got officers.” He sighs dramatically. (CCA claims to have “no knowledge” of gates going unmanned at Winn.)

“It’s messed up,” the prisoner says.

“Man, it’s so fucked up it’s pitiful,” Jefferson replies. “The first thing the warden asked me [was] what would boost morale around here. The first two words out of my mouth: pay raise.” He takes a gulp of coffee from his travel mug.

“They do need to give y’all a pay raise,” the prisoner says.

It’s a story, in other words, of contemporary America—not just of private prisons (although it is an indictment of the growth of for-private incarceration), but also of the frustrations associated with the military-like occupation of U.S. streets (with an understanding of what that means for both the occupiers and the occupied).

The second article appeared in Tuesday’s New York Times, on the uneven recovery in Las Vegas, the epicenter of the housing crisis. The story is very different, about middle-class people who couldn’t be more different from inmates and prison guards, who are suffering from being underwater on their mortgages and struggling to negotiate a sale to avoid foreclosure.

But I was struck by two similarities—of people imprisoned in their homes (because they can’t get out from under their high mortgage payments) and of the violence (real or perceived) of their once-prosperous housing developments. Consider the story of Michael Hutchings who, with his wife and their children, still lives in their 10-year-old dream home.

A Marine veteran, Mr. Hutchings is now a block captain for the neighborhood association near Sunrise Mountain, 10 miles east of the Strip. Like many residents of the scattered American cities where violent crime is rising, he got so concerned that he installed iron gates and 12 security cameras to watch over his 1-year-old son, Maxim, and 3-year-old daughter, Natalia, as they play. When he takes them to the park, he goes armed.

The inmates and guards of the Winn Correctional Center and the Las Vegas homeowners who still have not experienced a recovery from the crash of 2007-08 are, in their different ways, prisoners of the American Dream.

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As part of his analysis of changing household structure in the United States, Steven Ruggles [pdf] presents the two charts above summarizing data about the relative income of young men.*

What Ruggles finds is that, when comparing the wages of 25-29 year olds to the wage rates of their fathers 25 years earlier (when the fathers were 25-29), relative income peaked in 1958, when young men made about four times as much as their fathers had a quarter-century before. In the 1960s and 1970s, young men’s relative income collapsed, and since the mid-1980s young men have been making less than their fathers had at the same age.

Ruggles also presents a second measure of relative income: comparing current income to an ideal based on the affluent, for example, the income of young men relative to the income of the top 1 percent. As it turns out, this measure peaked in 1970, when 25-29 year old men were making about 13 percent as much as the average income of the top 1 percent; by 2012, it was down to 2.3 percent.

By both measures, then, the rising relative fortunes of young men in the postwar period—a key premise of the American Dream—was short-lived. It quickly and dramatically dropped (during the 1960s and 1970s) and has stagnated (beginning in the early-1980s) ever since.

As Stephanie Coontz explains,

If we want to revive and achieve the American Dream, we need to change a situation in which the people whose hard work makes this country run cannot earn a living wage, while bankers, speculators and corporate elites – the real “takers” in today’s society – skim off far more than their fair share.

 

*Ruggles’s argument (echoing that of V. K. Oppenheimer) is that “the spectacular decline in the position of young men is the most obvious driver of the decline of marriage since the 1960s.” Unfortunately, Ruggles focuses on the decline of marriage rather than on changes in the structure of households—as if the decline in marriage rates is itself a negative trend. One alternative is that, as a consequence of the declining fortunes of young men (along with the stagnation in the incomes of young women), men and women are inventing new household structures, new ways of living alone and together, that do not share the premises of traditional (postwar) marriages.

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