The American Dream is Alive and Well

The American Dream Is Alive and Well

The Archbridge Institute recently launched a new short video series delving into different concepts related to the American Dream. In the first video, we start with one of the most timely questions of our day: Is the American Dream dead? You can watch the video here, but I wanted to delve a little deeper into the data and explanations behind the video.

First of all, the current vibe on the American Dream is negative. Politicians like Donald Trump and Bernie Sanders tell us that the American Dream is dead. Journalists say the same thing. New York Times reporter David Leonhardt published a book on his thesis that the American Dream is indeed dead. The WSJ, Fox News, and other outlets like Axios like to remind us that it’s dead. Even Captain America jumped on the bandwagon.

However, is the American Dream truly over and done with? The American Dream is usually measured in two ways: the first is how the academic literature in the social sciences measure it, which is to link the American Dream to the rate of income mobility across generations. This is basically how many people are out-earning their parents at the same age, around 32–40 years old, depending on the study. Here is David Leonhardt again citing research by Raj Chetty and his team at Opportunity Insights.

According to this measure, Raj Chetty and his team have found that the American Dream has been declining, with only 5 out 10 kids out-earning their parents as adults today, down from 9 out of 10 Americans of those who were born in the 1940s. However, other researchers like Scott Winship are not as negative. He has corrected the results on that data and shows by his own estimations that it is more like 7 in 10 Americans who out-earn their parents—a trend that has held pretty steady in the last few decades.

So the situation is not as dire as some claim, but do you wake up every day thinking that your American Dream is to make more money than your parents did? Is that what the American Dream means? More on that in a different post.

But now let’s turn to examine the second way of measuring if the American Dream is dead, which is just asking the American people directly. And for that we can go to opinion surveys. First, let’s go with the negative. One of the most-cited recent surveys was done by the WSJ last year, along with NORC at the University of Chicago. In that recent survey people were asked:

Clearly, more people are negative about it than in the past, and less people were positive about it. Other outlets like ABC News also recently published a survey in partnership with IPSOS using that same question and reaching a similar conclusion.

However, is working hard and getting ahead financially the main definition of the American Dream? And is framing the question externally and not internally to people the way that question should be asked?

First of all, the definition is much more nuanced. The original definition came from James Truslow Adams in his 1931 book The Epic of America, which continues to be relevant today:

[The American Dream] is that dream of a land in which life should be better and richer and fuller for every man and woman, with opportunity for each according to his ability or achievement. . . . It is not a dream of motor cars and high wages merely, but a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.

This can certainly include hard work and getting ahead financially, but the full definition is much more holistic and inclusive than just that. Coincidentally, I’ve conducted a survey for the last four years on attitudes about the American Dream, with the same survey firm, NORC at the University of Chicago, and with a bigger sample, of almost 2,200 respondents. However, instead of providing a definition of the American Dream just based on the definition of hard work, my institute directly asked Americans if they have either achieved the American Dream, are on their way to achieving it, or if they think it is out of reach. That is the same question as other polling organizations such as Pew Research Trust have used in the past.

This table shows the results for the last four years:

In all those years, about 8 in 10 people were positive about the American Dream, answering that they have either achieved the American Dream or are on their way to achieving it. Only 2 in 10 people say it is out of reach. So, the American Dream is not dead. It is alive and well. That was true across ages, races, income groups, and education levels. There is a slight decline in 2023 but not as steep as the declines showcased by the WSJ and ABC polls.

When we restrict the meaning to one narrow definition, and don’t allow people to think about it in terms of their own lives and definitions, we can get different answers. However, our survey also asked additional questions: Do people think they have more opportunities than their parents did? Do they think their kids will have more opportunities than they do? Again, the picture is much more positive than some researchers might think:

Turning back to the question about the American Dream found in the original WSJ/NORC survey, the question is not asking people directly about their own American Dream but about what they see around them. In a different survey we conducted on hope in America we found that when asked about their own lives, people said they were hopeful about the future. But when asked about their attitudes regarding the future of the country, people were much less hopeful. More than 80 percent of Americans said they were hopeful for their own futures and the futures of their families, but only 56 percent claim they are hopeful for the future of the United States.

This is strange, seeing as we would expect people to be more hopeful as a nation if individually we all think that we will be ok. The same can go for the American Dream. Despite more people saying that the American Dream is not what it used to be at a societal level based on just the definition of hard work, if we ask people directly about their experience pursuing the American Dream, our survey results are much more positive.

It can also be that the bad vibe on the American Dream we see from leading policymakers, elites, and journalists is itself producing a bad vibe cycle, which is affecting our cultural perspective on the subject.

We shouldn’t disregard valid complaints people might have about the American Dream or say that there is no room for improvement. Interest rates are high, precluding people from buying a home, which some interpret as a fundamental pillar of achieving the American Dream (even though it’s not what we found people value as “essential” to the American Dream as some other things). There are barriers to the American Dream, like a decline in business dynamism and increases in occupational licensing that serve as barriers for people looking for more paths to flourishing. But those bad vibes in leading elite circles could be affecting our perception of the American Dream.

We should be careful not to induce a self-fulfilling prophecy in which fewer people are motivated to exercise their agency and pursue their dreams despite any obstacles that are in their way, and regardless of where they started. As I recently wrote elsewhere:

Psychology tells us that when we feel anxious or under attack, we become less optimistic and retreat into a defensive mindset that is not conducive to a dynamic view of ourselves and the world. Today, more Americans are embracing a defensive mindset. Democrats and Republicans stoke fear by telling us our way of life, our culture, and our democracy are being attacked by the other side. Exacerbating the alarmism, Americans are more anxious, more lonely, and less trusting of institutions than in the past. Facing such perceived calamity, what are Americans to do but retreat into defensive mode?

Lastly, as our survey clearly shows, being on your way to achieving the American Dream is also about a positive outlook and is a key feature—not a bug—of the American Dream. It is about pursuing happiness, pursuing a better life, without any assurances that you will get there. That is also a fundamental part of the American ethos that cannot be overlooked. It’s more about the journey than the destination. Psychologically being more open and positive about your opportunity to pursue the American Dream can embolden you to pursue it and can even be a unifying narrative across America, which desperately needs it during this election year.

The bad vibe can start changing quicker than we think, if we just share this more positive news about the American Dream. As I mentioned at the close of the video referenced at the beginning of the article: “What can you do to make sure the American dream remains alive and well? Share these facts with people and tell them there is hope for the American Dream, pursue your own dreams, and take actions that will put you on a path to success. That way you can also be living the dream.”