Sunday, October 26, 2014

Is the American Dream Dying?

A good article in AlterNet a few days ago continued a dialogue I have been writing about for some time – the slow, painful death of the American Dream. As I’ve reported in the past, income mobility has slowed dramatically in recent years and left the U.S. only middle of the road among OECD countries. Real wages for most Americans have barely grown for most of the past four decades, while the rich get richer and the super rich toward Plutocratic status. The return on education is in decline and debt is killing stability and undermining investment, risk taking and long-term economic stability.

The article included seven facts that highlight the death of the key mythology (or Monomyth) that has sustained America for at least a century: 1. The middle class hasn’t seen its wages rise in 15 years (FiveThirtyEight), the percentage of middle class families is falling and wages have declined for the middle class since 2008, while they have risen for the wealthy. In fact, the wealth of the super rich has DOUBLED SINCE 2000 while corporate revenue is at record levels (in 2013 alone, corporate profits rose five times faster than wages (Business Week). 2. The idea of a stay-at-home parent is dead, as wages have declined so much that two-parent families arguably struggle more than one-earner families (with more children) in the past. 3. Rich are increasingly debt free while others are swamped with debt that undermines their ability to save. The argument is essentially that American households are now living on debt to maintain their lifestyle in the face of stagnant wages (New America Foundation). 4. In a similar vein, student loan debt is crushing an entire generation of non-rich Americans, saddled with payments that push their spending well below income levels and undermine the ability to save anything when you are young. Even public universities tuition is rising quickly as scholarships and grants fall, forcing most students to take on the burden of debt. This seems particularly ironic as Chile, once the incubator for American-led neoliberal globalization, pushes to make higher education free. 5. Vacations are on the decline in the country with the least hours of vacation and most hours worked in the entire OECD. In fact, we are the only advanced economy in the world that doesn’t require employers to offer vacation (CEPR). 6. Even with health insurance, healthcare is becoming increasingly unaffordable for most. Employer-funded portions of healthcare have risen 52 percent since 2007, but household costs have risen 73 percent during that same period (to $9,144 per household). 7. Finally, is the question of retirement. One can define a nation, to some extent, by how it treats its young and old and here the old are in trouble – with fewer and fewer able to retire at 65, or ever. One group actually placed the U.S. 19th among advanced countries in its retirement security (Durable Portfolios).

Looking across this list, what we see is individuals and families squeezed by stagnant wages, bulging debt, exorbitant healthcare costs, growing insecurity and little chance of retirement. Yet all this occurs as productivity and corporate revenues and profits continue to rise and the few reap the benefits of the work of the many. This is classic exploitation, with workers getting less and less of the fruits of their labor, while traditionally corporate-funded healthcare and retirement are transferred to those same workers and state-funded higher education pushed back on families and the young.

Many might ask why? There are three rather obvious, though complex, phenomena at the heart of the dying American dream: 1. The decline of unions, that gave us employee-funded retirement, employee-paid healthcare, vacations, overtime, child labor laws, COLA increases tied to inflation and the like. Without unions to push for fair wages and working conditions, almost everyone in the economy suffers (except the super rich). 2. The retrenchment of government since the conservative revolution of the 80s. Economic history shows us that active government intervention in the economy, which we are so often told is bad, is actually good for the average person who sees less economic instability, fewer recessions, higher economic growth and more income equality. This is even more true when we add regulation of financial markets and corporations, who tend to act increasingly irresponsibly when times are good and they feel comfortable they won’t be punished for their excess or mistakes. 3. The decline of democracy in general, and the Democratic Party in particular. Many in the country are cynical for good reason, as our representatives on both sides of the aisle increasingly support the interests of corporate America and a few wealthy donors. This undermines not only democracy as a concept but as a mechanism to enact the will of the people (popular sovereignty).

Not surprisingly, over 50 percent of the public in a recent poll argued that the American dream either doesn’t exist any longer or never did at all. While this may be true, it is essential to somehow find a way to inspire and then galvanize people to believe we can recuperate it again and save the country from the endemic greed and injustice that have killed the country’s spirit and “soul.” Rather than miring ourselves in continued cataloguing of this situation, however, it is time to stand up and act!

No comments: