Time for a New American Dream?

Photo by Aaron Burden on Unsplash

Everyone in the world knows about “the American Dream” — our defining national ideal that equality of opportunity is afforded to every American. That through hard work, one's highest aspirations can be achieved. That in a free, democratic country with few societal barriers (apart from social media shaming) anyone, even from the humblest of beginnings, can realize success, prosperity and upward economic mobility for themselves, their family and their children. That through discipline, accountability and perseverance, we can have a better lives than our parents and our children can have better lives than us.

Over the last two centuries, the American Dream has been arguably the single biggest reason for the ascendency of the United States to world super power. Beyond its inspiration for our own citizens, people have been drawn from all over the world by the American Dream — and not just anyone, these were the people who had the guts and determination to find a better life. A global self-selection process of people who were willing to work their fingers to the bone to realize that American Dream and were thankful every day for that opportunity. Though many were impoverished financially, they were rich in work ethic, honesty and intellect. Because of the American Dream, each generation of Americans has believed they can improve their own prosperity, and that motivation has lifted our collective prosperity as a nation.

The problem is the American Dream may be as unattainable as witnesses in a Senate impeachment trial. Despite Americans being better educated, more employed, and more productive than ever before, many feel they are falling behind. The stats are depressing. In a survey by New America, Gen Z adults (age 18-22) were asked if it’s easier or harder to find a good paying job compared to their parents, 65% said it was harder, and only 4% said it was “much easier” — a dramatic decrease from the 19% expressing that optimism among their grandparents’ generation. The pessimism was even greater when asked if they could afford a family, with only 2% on Gen Z adults responding it was “much easier” and 71% saying it was harder than for their parents.

This precipitous drop in the perceived attainability of the American Dream should come as no surprise given that real wages (essentially the buying power of salaries adjusted for inflation) are virtually unchanged since 1970. If 1970 marks the high point of American prosperity, that should be enough to piss anyone off. As the costs of housing, education, health care and other necessities have increased and wages have stagnated, 76% of Americans are now living paycheck-to-paycheck.

The reality, of course, is that the American Dream has been fading for a while. My generation may have been the last to realize a higher standard of living than our parents. The trend line has been down since then. But what has exacerbated that economic reality is social media. When I was a kid, the only window into extravagant wealth I got was a weekly dose of “Lifestyles of the Rich and Famous.” Today, kids are constantly barraged by celebrities, athletes and regular friends who have more — better houses, cars, clothes, lives. And everyone is, themselves, trying to portray on social media how great their lives are. This is toxic.

Never before in history has there been such a collision between narcissism and envy. Gen Z’ers are essentially earning less, while pretending to be rich, and consuming a steady diet of social media posts about gorgeous celebrities drinking champagne in their Bugattis. “Champagne wishes and caviar dreams,” indeed. As someone with two children almost in that Gen Z range, all of this worries me a lot. What are the psychological effects of simultaneously projecting affluence while falling further behind financially? What happens when people don’t believe they can realize a better life through hard work? They elect a reality TV con man as president, that’s what!

So what do we do? It’s too late to put the social networking menace back in the bottle. Celebrities aren’t going to stop bragging about their wealth and every tabloid in the supermarket would tell you we’re not going to stop reading about it. Besides, hearing those fantastic stories about a better life is supposed to inspire us, isn’t it?

So that leaves two options:

Option 1 -- Set lower expectations. Maybe it’s time to define a new “American Dream.” Sorry, what we were talking about as a founding ideal these last 244 years was an overstatement. I mean, c’mon… we can’t all have a better life than our parents. In fact, that shouldn’t be your goal at all. You should be happy settling for crippling student loan debt to get a degree that doesn’t get you a job, racking up massive credit card loans to afford groceries, living in a studio apartment with 12 roommates, saving for 38 years to afford a down payment on a house, and waiting to have children until you’re financially independent - some time in your mid-70s. What’s the problem?

Somehow I can’t imagine that new American Dream being very appealing.

OR

Option 2 — create real economic opportunity. Much of the national discourse on this topic has focused on economic opportunity at the personal level — better access to education, affordable childcare, universal healthcare, reducing income inequality, etc. And these are important. But we also need better economic opportunity in business too. We are living in an era of oligopolies. From baby formula to caskets, virtually every major market is dominated by just a handful of huge vendors. It’s so bad that the only challengers in these markets are other monopolists — like the overnight shipping market (91% controlled by 3 companies) and getting disrupted by Amazon. The effect of this concentration of market power is that fewer and fewer businesses are started — not just the kind of startups we obsess over in Silicon Valley, but small, family-run businesses in all sectors of the economy.

The two main avenues for realizing the American Dream, for creating generationally uplifting wealth, were owning a home and starting a business. With those two levers harder to reach than ever, what are the bootstraps on which we expect people to pull themselves up? We need more systemic change in the economic opportunities we afford our people. Or the political discontent of the last few years will prove to be a preamble not an aberration.