Is the sun setting on the American dream?


LAST MONTH Kansas City unveiled plans to create a new attraction. The National Museum of Suburbia will allow visitors to wander through a re-created ranch-style home, peep through a white picket fence and spy on fake neighbours played by actors. There will also be a bowling alley for visitors to play on, along with exhibits of suburban and middle-class life.

“For many, suburbia equates to the American dream, a hopeful vision with roots dating to the Great Depression,” reads a promotional brochure. “It is a dream of home ownership and better opportunities for one’s self and one’s children.”

The timing seems apt, for in the United States today there is gnawing uncertainty and anxiety about what future awaits the country’s middle class.

As the presidential election barrels towards its conclusion next week, many of the bedrock assumptions of American life – that hard work yields rewards, that responsibility will be rewarded and that a brighter tomorrow lies around the corner – are being shaken.

A rapid fall-off in well-paid manufacturing jobs, replaced by low-paid service-industry jobs with fewer healthcare or pension benefits, means many citizens are falling behind and social mobility is stalling. For a slim majority, Americans now define success as “not falling behind”.

The Democratic and Republican presidential campaigns have been bombarding swing states, such as Ohio, with messages about protecting the middle class and leading the country on the path to prosperity.

Barack Obama has tried to connect with voters on the bases that “we’re better together” and that stronger safety nets are better for society.

Mitt Romney’s vision is that tax cuts and less regulation are the way to rekindle the fire of the American dream.

Yet neither candidate has really faced up to the full scale of the challenge facing the US. It’s as if the nation requires ongoing reassurance that the country’s values and successes are extraordinary and that the American dream remains intact.

It might explain an aching nostalgia for a time when days seemed brighter, work was better paid and affluence was a possibility for all. What better way to do this than encase that way of life in a museum for visitors of the future to admire?

TOM GAULRAPPnever thought it would come to this. But on Monday, the day before the presidential election, he is due to be laid off after 33 years of work. He has been working for Sensata Technologies in Freeport, Illinois, which makes motor sensors. The company is profitable, but the owners stand to make more money by shifting the work to China.

Gaulrapp is used to earning a fairly decent wage of about $18 an hour, or $40,000 (€31,000) a year. Now he fears scrabbling to find a low-paid job on half those wages. The only saving grace, he says, is that he doesn’t have children to support. “If all of this continues we won’t have any middle class left,” he says. “All that we’re left with are minimum wage jobs with no benefits.”

He isn’t alone. While most jobs lost during the recession have been in the midrange of wages, most of those added during the recovery have been in low-paid areas of work. It’s part of a long-term trend that some refer to as a hollowing out of the workforce. “We don’t just have a jobs deficit; we have a good-jobs deficit,” Annette Bernhardt, a policy codirector at the National Employment Law Project, told reporters recently.

What’s driving this decline? The biggest causes, say most economists, are not even the issues that are dominating the presidential debate. A key factor is the digital revolution, which has allowed computers to replace many forms of human work, and the wave of globalisation that means millions of low-wage workers are now competing with Americans.

Education, too, is seen as a vital factor. Where once the US education system led the world, nowadays it has fallen well down international rankings. College is also becoming more expensive, as taxpayer support for tuition fees has shrunk over recent decades. This is happening at precisely the time when educational attainment and skills levels are needed to ensure the country can compete in a globalised world.

High healthcare costs – up to three times those in Europe – are an issue, as are immigration policies that seem to penalise the highly educated yet attract lower-skilled workers who then compete with Americans for low-paid jobs.

All of these changes mean the ladder of opportunity is being pulled up higher for many while wealth is being concentrated in the hands of a smaller minority.

As a result the dream of mass affluence may well be fading. In 1973 the top 1 per cent of earners took home 8 per cent of the national income. By 2007 – before the downturn – that figure had risen to 18 per cent. Over this same time frame, wages for the middle class, when adjusted for inflation, have been stagnant, according to most calculations. All in all, those at the top in the US haven’t enjoyed such a concentration of wealth since before the Great Depression.

“In the US as a whole the biggest story of the last 35 years is the phenomenal increase in income inequality,” says Michigan State University’s economics professor, Charles Ballard. “We like to think of America as the land of opportunity – and indeed it still is, in many ways. So we’re uncomfortable about the evidence that opportunities are far, far better for some than for others.”

The physical signs of inequality are often shocking to behold. Take the Rust Belt city of Pontiac in Michigan. It has lost most of the texture of a functioning city. Its police force and fire department were dispanded because of bankruptcy. (Their responsibilities have been taken over by neighbouring areas.) Empty or boarded-up homes with overgrown gardens and peeling picket fences are reminiscent of a postapocalyptic landscape in a science-fiction movie. A sign on one road reads: “Drug-free school zone”.

Around the next corner the school’s windows and doors are covered with sheets of metal. It’s one of eight public schools to close here in recent times, a result of depopulation and shrinking public spending. Average family incomes here are about $30,000, just above the poverty threshold.

About six kilometres south of the city is Bloomfield Hills, a pristine tree-lined enclave of large homes that is ranked as one of the five wealthiest cities in the US. There are Mercedes-Benz dealerships and a dog-grooming parlour. There are no bus stops (the locals opposed them). The average family income here is about $300,000.

Luxury and poverty have always coexisted in uneasy tension. But the widening gap between rich and poor means it is set to become a far more important political issue than it has been in recent times.

THE NOTION OF AMERICANdeclinism is nothing new. In the late 1980s, as Japan ascended on an ever-upwards trajectory, many fretted that the US would be left in the slipstream of a country that combined a highly competitive economy, thrifty citizens and excellent education. The country’s boom turned out to be a property bubble.

Today China poses a similar threat. Bookshelves in this election year creak under the weight of titles such as Who Stole the American Dream?, That Used to be Us and The Party Is Over. They all ask the same question: what does the US need to do to rebuild itself?

The solutions tend to differ. Some call for a Marshall Plan-type investment in US education and infrastructure and a managed decline of the country’s military might.

Other say boost training to encourage highly skilled manufacturing jobs. Some suggest the flaws lie in dysfunctional government. No one is really confident of what to do about these things, any one of which would be a challenge.

Optimism is, increasingly, a currency in short supply for younger people. Prof Mark Rice, chair of American studies at St John Fisher College, in New York, says many of his students are gloomy about their future.

“They see their older brothers and sisters, their aunts and uncles, their moms and dads, struggling to find and hold on to meaningful work. Many of them are being saddled with heavy loads of student loan,” he says.

But he points out that he, too, worried about his prospects as a student. He recalls being in high school in the 1980s and having serious conversations with friends about not wanting to bring children into what appeared to be a dangerous, violent, economically uncertain world.

“Optimism waxes and wanes, and I don’t think that where we are now means the end of the American dream,” he says. “I have enough optimism left in me to believe that things will get better, and I try to convey some of that optimism to my students without seeming naive or Pollyannaish.”

Despite all the challenges facing the US, this is a country that repeatedly confounds its critics. Places such as Silicon Valley remain the most dynamic in the world to set up a company and create a disruptive technology.

The top third-level colleges in the US remain the best anywhere. The key question remains, though: will there room in the future for the United States’ middle class to prosper in a globalised and more competitive world? This week, as the storms lashed the US’s eastern seaboard, President Obama spoke about the resilience of the American people in times of trouble.

But he could just as easily have been speaking of the daunting challenges that face the country in the coming years. “That kind of spirit of resilience and strength, but most importantly looking out for one another, that’s why we always bounce back from these kinds of disasters,” Obama said. “This is a tough time for a lot of people . . . But America’s tough. And we’re tougher because we pull together and we leave nobody behind. We make sure we respond as a nation.”

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