Pretending the American Dream is still intact in the same way it once was will only drive the country further away from the ideal it was founded on: equal opportunity for all.
By Veena Murali
The United States is a country that, for over 200 years, has idealized the concept of the “American Dream.” Immigrants from all around the world flock to this melting pot- my parents included- with the vision that they have an equal opportunity for social and economic mobility in life. However, the previously established value of equality is diminishing quickly in our present day and age. In fact, the gap between rich and poor is at its widest in the last fifty years. It’s safe to say that the American Dream is broken.
With inequality on the rise, groups at the bottom of the wealth and income distribution have a small chance of moving upward, even if they follow all the steps of the typical American Dream- getting a job, working hard, saving money, etc.
To illustrate the severity of income inequality in the United States, let’s say a pie represents the estimated $98 trillion of household wealth in the United States. Nine slices, or 90 percent, of the pie belong to the richest 20 percent of Americans. Furthermore, 4 out of those 9 slices belong to the wealthiest 1 percent of Americans. The upper middle and middle classes take 1 slice, or 10 percent, of the pie, while the lower middle class would share 0.3 percent of the pie. The poorest 20 percent of Americans do not get a slice. Essentially, 90 percent of all household wealth in the United States is distributed among the top 20 percent of the wealth distribution, while the remaining 10 percent of household wealth is spread out among 80 percent of Americans.
Many of the politicians and analysts that wish to ignore imbalances in the wealth distribution prefer to argue that economic growth can help ease poverty and inequality. But even in the face of a decade-long economic expansion, income inequality is growing. Although economic growth does help ease poverty, research shows that the number one factor driving poverty is income inequality followed by education, family structure, and race. The links between inequality, mobility, and poverty contradict the “growth as a remedy” school of thought. Instead we need structural changes and resource redistribution.
So why does any of this matter? Many of us, being students at NYU, are not personally affected by the problem of income inequality and therefore, may not be able to fathom why it must be addressed. However, for those at the lower end of the wealth distribution, income inequality is reducing mobility and equal opportunity due to many reasons. For one, income inequality leads to increasing residential segregation by income, which creates higher concentrations of families in either great poverty or great wealth. The proportion of middle-income neighborhoods went from 65 percent to 49 percent between 1970 and 2009. High poverty neighborhoods create long-lasting disadvantages for residents, through exposure to crime, health problems, and poor education.
Additionally, income inequality equates to unequal access to high-quality education opportunities, creating a wide achievement gap among wealthy and poor children. Richer parents have more money to invest into their children’s future in the form of classes, summer camps, tutors, prestigious universities, and more. They also have more time to spend enriching their children’s education at home, whereas poorer parents spend longer hours working minimum-wage jobs to pay bills.
Finally, income inequality is polarizing society beyond the economy. Social trends like assortative mating explain how humans naturally flock to marry, befriend, and be associated with those similar to themselves. It’s not surprising that humans tend to marry or be friends with someone from a similar background. But wealthier people have access to opportunities only the wealthy can afford, ultimately creating a realm of exclusivity the poor simply cannot penetrate. For example, wealthy families can afford to send their children to private university, where students meet other students from wealthy backgrounds and surround themselves with one distinct archetype, leading to the alienation of the poor. Income inequality feeds on these social trends, which drives both social and economic polarization between the rich and poor.
Addressing income inequality means addressing the unfairness that underlies much of the American economy. Pretending the American Dream is still intact in the same way it once was will only drive the country further away from the ideal it was founded on: equal opportunity for all.
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