ECONOMIC INEQUALITY AND THE EROSION OF THE AMERICAN DREAM

The Nazca lines are a series of ancient geoglyphs in the Nazca Desert in southern Peru. The hundreds of individual figures range in complexity from simple lines to stylized hummingbirds, spiders, fish, and lizards. Archeologists, ethnologists, and anthropologists have studied the ancient Nazca culture to try to determine the purpose of the lines and figures, but no single theory or explanation has come to be widely accepted. One interesting hypothesis is that the construction of the lines kept the Nazca people busy. In addition to farming and hunting, ongoing construction of the lines gave the community a sense of purpose and structure so that the people could move forward in a productive way and not get bogged down in competition and conflict.

The creation of the Nazca lines may serve a similar societal purpose to that of the American Dream. Numerous opinion polls conducted since the 1980s indicate that the majority of Americans believe that working hard is the most important element of getting ahead. These same polls also indicate that achieving the dream through fair means is becoming increasingly difficult for future generations. The main cause of the disappearing American Dream is economic inequality. The product of a variety of decisions and actions, income inequality has grown at an alarming rate over the last several decades. According to the Congressional Budget Office October 2011 report “Trends in the Distribution of Household Income Between 1979 and 2007,” overall real average (after-tax) household income grew 62% over this 28-year period. However, for the top 1% of earners, household income grew 275%, and for the bottom 20% of earners, it grew only 18%. Today, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.

Is this a problem? Most assuredly. When so much income and wealth is held at the top, the rest of Americans simply do not have the purchasing power to keep the economy going at full employment. Moreover, a new U.S. Census Bureau report issued in September 2013 confirms the continuing sluggish job market and long-term wage stagnation. Put simply, the vast majority of working Americans are becoming less well off with each passing year. Left unchecked, this trajectory will eventually result in the death of the American Dream. As millions of people come to realize that no matter how hard they work, they will only be able to get by instead of being able to pursue wealth, ownership, and happiness, then our society will gradually lose its purpose and structure.

The U.S. economy needs a major overhaul. Our objective should be to keep everybody busy and striving towards a better life. At the policy level, this will take significant corporate and individual tax reform that results in more fairness. It will take streamlined government operations and reduced expenditures, both in social services and defense. It will take well-conceived policies in areas of universal concern such as education, healthcare, and security. But most of all, it will take a change in philosophy. We need to start thinking about what is good for ALL Americans when making policies and decisions, and we need to adopt an intergenerational perspective instead of gearing our actions to election cycles. Clearly, this will not be easy, but if we can muster the collective will to change, the solutions can be worked out.     

By Charles Snow