The American Dream was first coined by historian James Truslow Adams in 1931. It is the idea that each individual has the opportunity to achieve success through high levels of hard work, education, and determination. For many years, the American Dream was a central concept in the country’s culture. It served as a guiding principle and provided the motivation for millions of people to come to the United States, believing that they can achieve the same standard of living as the rich Americans. However, is this still the case in today’s society? Is the American Dream still attainable?
In the 20th century, the American Dream was associated with homeownership, a stable career with benefits, the opportunity to provide a better life for one’s children and the concept of an upwardly mobile lifestyle. Throughout the years, the American dream has expanded to include other aspects such as having the freedom to pursue one’s own individual interests, having the ability to retire comfortably or having the chance to create a business, but how achievable is this dream today?
The Middle-Class Squeeze
The main barrier in achieving the American Dream is the Middle-Class Squeeze. The squeeze is a result of rising costs and stagnating wages, which is making it difficult for working-class Americans to attain their desired lifestyle. The cost of living has risen so quickly that the average worker’s real earnings haven’t been increasing at the same pace. In 1980, the median household income for the middle-class was $48,157. In 2016, it was $59,039, an increase of just over $10,000 over 36 years. While that may seem like a substantial rise, that number likely doesn’t account for the cost of living inflation over the same period.
The increase in cost of living has made it impossible for many Americans to achieve the American Dream. It’s said that around 44% of Americans live paycheck to paycheck, meaning that they don’t have enough money saved for emergency expenses, let alone the ability to save for retirement, buy a home or start a business. The cost of housing, education, and healthcare is rising, and if that wasn’t bad enough, salaries and wages are not keeping up with those expenses.
The cost of a college education is a prime example of the squeeze. As we all know, college tuition keeps skyrocketing, and the debt students accumulate has become a major financial and educational impediment. Students who were once able to work summer jobs to pay for college tuition are now graduating with enormous student loan debt, often equal to or more than most people’s yearly income. This debt is not only a severe financial burden, but it also means students are struggling to buy homes, start families, and save for their future.
The lack of access to affordable healthcare options is also a huge barrier to achieving the American Dream. Many middle-class families are one illness away from financial ruin, and because healthcare is so expensive, it is difficult to save for those rainy days. Healthcare expenses are one of the top reasons for declaring bankruptcy in America.
Starting a Business
Despite the Middle-Class Squeeze and the ever-growing costs of living, starting a business is still seen as a path to the American Dream. Entrepreneurship provides a way to achieve success on one’s terms and create the lifestyle that they dream of. With the advancements in technology and the rise of the gig economy, starting a business has been made more accessible, but it doesn’t mean that it’s any less difficult.
According to the Bureau of Labor Statistics, only 20% of small businesses survive their first year, and only 50% will make it past five years. With this in mind, it’s clear that starting a business is not an easy feat, even though it can be a direct path to the American Dream.
For someone who wants to start a business, the financial burden is coupled with the desire to create a product or service that is both unique and valuable. During the initial stages, a business owner must fund their startup costs, cover the overhead expenses, and advertise to attract clients or customers. Until the business starts making money, an entrepreneur must rely on their savings or loans, and if the business inevitably fails, it could mean financial ruin for the individual.
The Role of Education
One of the keys to achieving the American Dream is attaining a quality education, which is itself also becoming increasingly expensive. In today’s society, it’s not enough to have a high school diploma to earn a living wage. Most entry-level jobs require a college degree, and those jobs that don’t require such an advanced education are often highly competitive due to the scarcity of jobs.
Education provides the necessary tools to achieve a higher quality of life. However, even though the value of education cannot be overstated, the significance of education is marginalized by the current system of underfunded public schools, predatory student loans, poor allocation of school resources, and under-compensated teachers. Children from underprivileged backgrounds attend schools that don’t fully prepare them for college or the workforce, which hinders their ability to achieve their American Dream.
Additionally, higher education has become a toxic cycle. Students pursue a college degree and become saddled with enormous student loan debt. They then must work to pay off the debt rather than starting their own business or saving for retirement. As a result, the benefits of earning a higher degree are being undermined by the financial constraints and the lack of quality education available to everyone.
For years, the idea of the American Dream has given hope and motivation to millions, but unfortunately, for many of today’s Americans, the dream is no longer attainable. The Middle-Class Squeeze is a significant barrier to achieving one’s desired lifestyle, and the rising cost of living is making it increasingly difficult for people to save or invest in their future. The ever-increasing costs of education, healthcare, and housing, coupled with stagnant salaries and wages, are making it hard for Americans to achieve their goals of retiring comfortably, owning a home, or starting a business.
However, even though the situation seems dire, there is still hope. We need to create policies and initiatives that enable people to achieve their American Dream, such as affordable and accessible healthcare and education, living wages, and affordable housing. We need to support entrepreneurship, as entrepreneurs are often responsible for the majority of job creation in America. And finally, we need to ensure that our children are equipped with the tools they need to pursue their dreams, and that everyone, regardless of their background, has access to an education that enables them to achieve their full potential. We need to rekindle the true meaning of the American Dream, one built on real opportunity and equality, not impossible odds that many people face today.