The American Dream, as James Thurow coined and described it in 1931, is about the equality of opportunity. If you believe that Thurow is right, then you need to wake up and open your eyes … now, because organizations from the American Federal Reserve to the International Monetary Fund to Science magazine have all released reports this year showing that inequality is dangerously high. The reports caution that if nothing is done to address the inequality of opportunity in the United States, the American Dream will slowly become a nightmare for Uncle Sam.
The nightmare is being conjured up by two interconnected trends: a growing income gap fueled by diminishing educational opportunities. Educational opportunity provides the surest footing when climbing America’s socio-economic ladder but that foothold is slipping away from an increasing number of Americans each year. In other words, education is becoming less of a force for economic opportunity because the number of Americans each year that have the resources to pursue educational achievements (which will help them climb the socio-economic ladder) is fewer and fewer.
Janet Yellen, Chairperson of the United States Federal Reserve, recently explained (October 17, 2014) “The extent and continuing increase in inequality in the United States greatly concern me…I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity.” The International Monetary Fund (IMF) warned in March 2014 that the level of inequality in the U.S. “has returned to levels not seen since before the Great Depression” and more generally that “rising income inequality is weighing on global economic growth and fueling political instability.” Science magazine focused its entire May 2014 issue on inequality and one of its main findings was that “the United States has both the lowest [socio-economic] mobility and highest inequality among all wealthy democratic countries.” There are many other non-partisan reports, books and articles released this year but I think you get the point: inequality and, more specifically, inequality of opportunity is rapidly growing thereby slowly killing the American Dream (it is neither a Democrat nor Republican issue but an American challenge).
The best way to keep the American Dream alive has been and continues to be through education, especially a college education (it offers every individual an opportunity to climb the socio-economic ladder). Although Yellen called early education and higher education the “cornerstones of opportunity,” she worried aloud stating “I fear the large and growing burden of paying for it may make it harder for many young people to take advantage of the opportunity higher education offers.” She cited a report showing that “the median annual earnings of full-time workers with a four-year bachelor’s degree are 79 percent higher than the median for those with only a high school diploma” but also provided statistics that showed that every year there are fewer Americans who have the resources to pursue such an opportunity:
…the wealthiest 5 percent of American households held 54 percent of all wealth reported in the 1989 survey. Their share rose to 61 percent in 2010 and reached 63 percent in 2013. By contrast, the rest of those in the top half of the wealth distribution—families that in 2013 had a net worth between $81,000 and $1.9 million—held 43 percent of wealth in 1989 and only 36 percent in 2013. The lower half of households by wealth held just 3 percent of wealth in 1989 and only 1 percent in 2013.
The problem is that although education is the key for unlocking economic prosperity—especially in a globalized-knowledge based economy—the key is out of reach for an increasing proportion of Americans every year. Education has been our society’s equalizer until the last couple of decades. However, a new college-rating index that ranks colleges on their ability to provide “pathways for social and economic mobility” was released this month and it seeks to refocus and strengthen America’s great equalizer: higher-education.
The Social Mobility Index (SMI), which was created by CollegeNET and PayScale, was constructed to “stimulate other schools to move beyond opportunity rhetoric towards meaningful action.” Some universities such as Western Connecticut State University (ranked #11 in the country and #1 in Connecticut), where I am fortunate to be a professor, are taking meaningful actions—but there are too few WCSUs “contributing in a responsible way to solving the dangerous problem of economic immobility in our country” (SMI). In answering the question “What should students and their families take away from the SMI rankings?” the authors reply: “If a student wants to pursue academics in an institution that models awareness and civic responsibility, the SMI can provide a valuable guide.” Shouldn’t all educational institutions and organizations strive to pursue such meaningful actions? Wouldn’t a focus on SMI rankings rather than “pursuing the false prestige in popular periodicals” (you know the ones) make our society stronger and more dynamic?
T.E. Lawrence (a.k.a. Lawrence of Arabia) said “All men dream: but not equally. Those who dream by night in the dusty recesses of their minds wake in the day to find that it was vanity. But the dreamers of the day are dangerous men, for they may act their dream with open eyes, to make it possible.” While WCSU is one of this country’s leading universities in creating Lawrence’s day dreamers, educational institutions and leaders at all levels have important roles to play in creating and sustaining America’s day dream believers (men and women capable of transforming their dreams into reality). This country was built on the equality of opportunity and education has been a cornerstone of not only building the American Dream but for its realization. Those who diminish and weaken our educational institutions and opportunities at any level (local, state & national) and for any reason will abruptly awaken to a living nightmare created by their own vanity. Education on the pre-K, primary, secondary and higher-ed levels are the ‘pillars’ upon which the strength of America rests and the ‘pillows’ upon which the American Dream occurs.
Binyamin Appelbaum, “Janet Yellen Warns of Inequality Threat,” The New York Times, October 18, 2014
Gilbert Chin and Elizabeth Culotta, “The Science of Inequality: What the Numbers Tell Us,” Science, May 2104
Pedro Nicolaci da Costa, “Janet Yellen Decries Widening Wealth Disparity,” The Wall Street Journal, October 17, 2014.
Nicholas Kristof, “It’s Now the Canadian Dream,” The New York Times, May 14, 2014
Survey Acknowledges WCSU as a Leader in Promoting Social Mobility Western Connecticut State University website
Ian Talley, “IMF Warns on the Dangers of Growing Income Inequality,” 3/14/2014, The Wall Street Journal
Yellen, Janet L., “Perspectives on Inequality and Opportunity from the Survey of Consumer Finances,” Speech at the Board of Governors of the Federal Reserve System at the Conference on Economic Opportunity and Inequality (October 17, 2014), Boston, MA.
Chris is Professor of Political Science at Western Connecticut State University, a Fulbright Scholar, Director of the Kathwari Honors Program, and founding Director of the Center for Compassion, Creativity & Innovation. He is also the author of "The Compassionate Achiever: How Helping Others Fuels Success" (HarperOne, 2017).
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