Income gap a threat to the American Dream
The American Dream is a story we tell ourselves, how anyone--with determination and hard work--can rise from humble circumstances to achieve material success. It's a powerful story that has been repeated in many forms. In the stories of the countless pioneers, many of them immigrants, who settled the American West. In Horatio Alger's 19th century tale of Ragged Dick, a honest youth who rises out of poverty by seizing every opportunity for advancement. And in the stories of the many famous inventors and entrepreneurs--Thomas Edison, Sam Walton, and Bill Gates, to name a few--who rose to the top in an economic system that rewards enterprise and innovation.
It was a fortuitous moment in 1776 when the founding fathers, influenced by the European Enlightenment, planted the seeds of democracy and economic freedom on our shores. The abundant natural resources of the North American continent provided a fertile ground for economic growth and prosperity. The vast frontier bred a spirit of self-reliance that still endures. Capitalism flourished here like nowhere else on earth, making the American Dream possible.
But there is another side to the story. The success of the American way of life is not just due to our market economy. The free market forces of capitalism have been balanced by the prudent intervention of government to prevent wealth from being too concentrated at the top of the economic ladder. Inheritance taxes were first proposed by Republican President Theodore Roosevelt and later enacted into law. The emergence of labor unions in the nineteenth and twentieth centuries helped to expand the middle class, creating an achievable American Dream for millions.
How is the American Dream faring today? It depends on where you look. Our country is still seen as the land of opportunity by millions of people around the world who are living in extreme poverty and seeking a better life. Some of them find their way here, legally or illegally, and take jobs at the bottom of the economic ladder. Perhaps these immigrants are the current embodiment of the American Dream.
At the middle rung of the economic ladder is the American middle class, which has been in economic stagnation for decades. According to the U.S. Census Bureau, the median income for male workers in the U.S. after adjusting for inflation only rose from $28,892 in 1973 to $29,931 in 2003. Middle class families have made economic gains only because two adults are working now, where only one might have been working in the past.
At the top of the economic ladder are the 400 richest Americans in the annual tally conducted by Forbes magazine. This year, for the first time, you had to be a billionaire to make the list. Thirty years ago the top 100 CEOs in America were paid salaries averaging $1.3 million, or 39 times the pay of the average worker. Today they are paid $37.5 million, over 1,000 times the pay of the average worker.
The economic gap between rich and poor in America is growing ever wider. In addition, a study by sociologist Earl Wysong at Indiana University suggests that upward mobility isn't what it used to be. In other words, it's getting harder to move up the economic ladder to a position above the one you were born into. This is an indication that the American Dream--our national story--is in trouble.
It was a fortuitous moment in 1776 when the founding fathers, influenced by the European Enlightenment, planted the seeds of democracy and economic freedom on our shores. The abundant natural resources of the North American continent provided a fertile ground for economic growth and prosperity. The vast frontier bred a spirit of self-reliance that still endures. Capitalism flourished here like nowhere else on earth, making the American Dream possible.
But there is another side to the story. The success of the American way of life is not just due to our market economy. The free market forces of capitalism have been balanced by the prudent intervention of government to prevent wealth from being too concentrated at the top of the economic ladder. Inheritance taxes were first proposed by Republican President Theodore Roosevelt and later enacted into law. The emergence of labor unions in the nineteenth and twentieth centuries helped to expand the middle class, creating an achievable American Dream for millions.
How is the American Dream faring today? It depends on where you look. Our country is still seen as the land of opportunity by millions of people around the world who are living in extreme poverty and seeking a better life. Some of them find their way here, legally or illegally, and take jobs at the bottom of the economic ladder. Perhaps these immigrants are the current embodiment of the American Dream.
At the middle rung of the economic ladder is the American middle class, which has been in economic stagnation for decades. According to the U.S. Census Bureau, the median income for male workers in the U.S. after adjusting for inflation only rose from $28,892 in 1973 to $29,931 in 2003. Middle class families have made economic gains only because two adults are working now, where only one might have been working in the past.
At the top of the economic ladder are the 400 richest Americans in the annual tally conducted by Forbes magazine. This year, for the first time, you had to be a billionaire to make the list. Thirty years ago the top 100 CEOs in America were paid salaries averaging $1.3 million, or 39 times the pay of the average worker. Today they are paid $37.5 million, over 1,000 times the pay of the average worker.
The economic gap between rich and poor in America is growing ever wider. In addition, a study by sociologist Earl Wysong at Indiana University suggests that upward mobility isn't what it used to be. In other words, it's getting harder to move up the economic ladder to a position above the one you were born into. This is an indication that the American Dream--our national story--is in trouble.
Stories are important. They help to define cultural values and pass them on from one generation to the next. Implicit in the American Dream are the values of honesty, self-reliance, and hard work that are part of the American character. Let's not let go of the dream. But let's fix those deficiencies in our economic system that are undermining that dream, by finding ways to redistribute some of our country's wealth, so that those who do an honest day's work will be paid a decent wage.
--Published in the Attleboro Sun Chronicle, 8 October 2006
posted by Charles Adler at 10:39 PM
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