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The End of the American Dream [1]
['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']
Date: 2023-12-22
Over the last few decades, the gap between earnings of people with and without a college degree has widened. This has occurred as a direct result of the dismantling of what was once the greatest economy , not just on earth, but in history. The power of unions has been blunted, taxes on the rich have fallen, investments in public works have plummeted, and social safety nets have been thinned. Today, America performs very poorly on global rankings based on human development . Today, Europe leads the way in terms of standard of living. Not only has America become more unequal, but income mobility is declining. For children born in 1940, 92% of Americans earned more than their parents did. Of those born in 1980, just half did. Most Americans born in this generation will do worse than their parents. Polling shows that a majority of Americans believe that America has seen its best days. Few imagine that they will enjoy higher standards of living than their parents or receive some kind of financial bonanza. This widening inequality and declining income mobility has resulted in the rise of a politics of resentment, a politics of anger. People are angry, and many people want to blow the system up, and that’s a function of the gutting of the once greatest economy in history.
An Economy for the Rich
Source: Federal Reserve
The myth of meritocracy exists at a time when the class a person is born into matters more than ever. The next generation of billionaires is more likely to have inherited their wealth rather than created it. The American Dream is dead. The American Dream serves, instead, as a kind of propaganda that entrenches the power of the wealthy. If you only work hard enough, you too can become rich, or at least financially free. Workers without college degrees have suffered the brunt of the dismantling of a once egalitarian, growing economy. The system is rigged in favor of corporations. Workers have been euthanized, with the power of unions significantly blunted, and, more broadly, the ability of workers to collectively bargain sharply narrowed. The United Auto Workers (UAW) successful strike against the Detroit Big Three this year was the first real blow against corporations since the Reagan Administration, and even there, the terms agreed upon will result in lower wages than auto workers earned in that time. Unions are fighting back, and 2024 promises to see unions engaged in a number of contract fights .
Yet, workers without college degrees are not the only ones who have suffered from this gutting of the greatest economy. According to the Congressional Research Service , although, overall, all classes witnessed a growth in real wages (nominal wages adjusted for inflation), the richest, the 90th percentile, were easily the biggest beneficiaries between 1979 and 2018, with their wealth growing by 37.6%. For the average American, real wages grow by just 6.1%. The poorest, the 10th percentile, saw real wages grow by 1.6%. When the data is broken down by gender, the poorest men witnessed a 13.3% decline in real wages, and the average man had a 5.1% decrease in real wages.
Source: Congressional Research Service
When the data is broken down by ethnicity, black and Hispanic workers had the slowest real wage growth, with white and non-Hispanic workers enjoying real wage growth greater than everyone else. The poorest black workers, and the poorest Hispanic and the average Hispanic workers, had real wage decline.
Source: Congressional Research Service
The Normalization of Neoliberalism
The America we live in now is totally subject to free markets. The gains go to the richest, and everyone else gets the crumbs off the top table, or, gets poorer. The typical American’s economic security is so precarious that 56% of Americans cannot pay for a $1000 emergency bill from their savings. Facing such a bill, those Americans are forced to seek loans, and, often, that means loans with high interest rates such as title loans. It is easy for someone in such a precarious position to go from needing to pay $1000 to owing thousands in dollars thanks to the absence of social security nets. Since the Reagan Administration, this has been seen as the price of entry into the American Dream. We have accepted a free-market, neoliberal philosophy as normal. Where the greatest economy was founded on the idea that society had to be built to serve all, that we exist as a community, the neoliberal, market-oriented worldview places individual freedom and unfettered capitalism at the heart of its project. When we see a homeless person, we are taught to believe that that person must have done something wrong, we no longer ask how society has failed that person. This is the triumph of the Reaganite project. We have been taught to believe that this is the American way, and yet, until the Reagan Administration, few thought that it was! America then had a similar economic system to the Scandinavian economies.
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