Millennials and the American myth
Working to ease the equality gap benefits us all, not just the poor
Raj Chetty of Stanford University and associates analyzed the likelihood that an American child will earn more than his father. In their 2016 study, they found 90 percent of us Baby Boomers did. But for people born in the ’80s, the chances fall to only 50 percent.
This is hard for Baby Boomers to believe, because most of us did so well. My annual salary rose to 45 times that of my father’s highest salary. Many had similar results, especially around the prosperous Bay Area.
My parents were factory workers. They could only get the four of us through public schools. But public schools were good. Students could manage the cost of college in the ’60s with work, borrowing and modest scholarships. Good jobs abounded. Wages increased. Economic growth was strong.
The country was also much more equal in wealth and incomes.
Underscoring the crisis, Donald Trump rode to the presidency on a wave of anger over jobs, wages and loss of opportunity.
Americans are also blinded by a stubborn national prejudice preventing us from accepting loss of opportunity. Since our founding, Americans have prided themselves on individuality. Notwithstanding the facts, the myth of American opportunity available for all has strengthened, even in the face of declining opportunity. More of us say we don’t need government, because this is the land of opportunity. Everyone can make it without help, if only they try.
While many of us have the money to protect opportunity for our own kids, opportunity has plummeted for the underprivileged. If the average achieving the American dream has fallen from 90 percent to 50 percent, the chances for a kid of color from a poor neighborhood are now dismal.
Chetty’s group found slowing economic growth explained 29 percent of the decline. Rising inequality explained 71 percent. If growth and inequality had stayed the same, then opportunity would not have declined. They concluded: “If one wants to revive the ‘American Dream’ of high rates of absolute mobility (opportunity), one must have an interest in growth that is shared more broadly across the income distribution.”
We are advancing toward a highly stratified society of haves and have-nots. This will make walking down the street unpleasant, maybe dangerous. Crime, drug addiction, homelessness and other societal costs will increase.
Eventually, continuance of this trend will result in bloodshed and revolution.
Antitax hawk Grover Norquist says we should drown government in the bathtub, but it turns out opportunity goes down the drain with it.
We don’t need to grow government. We can reallocate to provide funds. Local and state governments can do a lot.
Let’s take the first step by agreeing that our priorities are restoring shared prosperity and opportunity.
It’s not just in the interest for the underprivileged among us. It’s in everyone’s best interest.
Dale Walker is a San Francisco retired financial services executive. He serves on the boards of Pacific Vision Foundation, the Graduate Theological Union and Beneficial State Bank. He is a 2017 Fellow in Harvard’s Advanced Leadership Initiative.