The American Dream is feeling less and less tangible for people in the United States, with confidence rapidly plummeting. A recent survey by the Wall Street Journal and the National Opinion Research Center found that merely 36% of voters said the American Dream “still holds true,” down from the 53% who believed in U.S. prospects in a 2012 edition of the survey and 48% in 2016.
For decades, people were sold on the idea that anyone could achieve the American Dream. This was characterized by the belief that anyone could achieve great things in the U.S. if they applied themselves and worked hard. There was an accepted understanding that anyone—regardless of their background—could attain financial security, prosperity and upward mobility by being industrious.
Millions of people from all over the world wanted to emigrate to the U.S. to participate in the American Dream and make a better life for themselves and their families. Unfortunately, there are growing signs that the dream may be turning into a nightmare for many people.
Americans are currently facing various economic challenges, including the cost of living outpacing wages, rising housing costs, high inflation, income inequality and the burden of student loans and record-high credit card debt. In the labor market, they must contend with companies offshoring jobs, the hyperspecialization of roles, fewer job listings available, lengthy hiring durations and the ascendancy of artificial intelligence, which threaten job security.
Signs That The American Dream Is Cracking
A byproduct of the American Dream was the outcome that children would have a better life than their parents. Sadly, upward economic mobility rates have plunged over the past few decades. Absolute mobility—the chances that a child born into poverty rises to a higher standard of living—across generations has been in continuous decline in the U.S. since 1980, according to Opportunity Insights.
“We are thought to be the country of the American dream, [where] once you start from the bottom, you move to the top,” Kreg Steven Brown, director of economic mobility policy at the Washington Center for Equitable Growth, told CNBC. “But that’s just not really what we see.”
Rising income inequality, the disparity between the rich and the poor in the U.S., has been growing for decades. In 2021, the top 1% of earners controlled 32.3% of the nation’s wealth, while the bottom 50% controlled just 2.6%.
Middle-class incomes have been relatively stagnant since the 1970s—especially for men who saw manufacturing going abroad. Now, Gen-Z is concerned they can never attain the prior standards of middle-class affluence their parents held.
The ever-growing costs in sectors, such as healthcare, housing, real estate and education, have outpaced wage growth, causing a strain on the household budget. Families are maxing out their credit cards and raiding their retirement accounts to stay afloat.
Employment Challenges
There’s a noticeable slowdown in hiring for white-collar workers. Listings for technology roles are down 55% from a year ago, banking vacancies fell more than 40% and insurance listings dropped 18%, according to research from Indeed.
Companies are looking for job seekers who possess highly specific and hard-to-find skills that match the requirements of the job descriptions. They are more discerning when hiring white-collar workers, as these professionals often incur higher costs. Job seekers are then boxed out of jobs as companies require hyperspecialization.
Research by human capital advisory firm Josh Bersin Company and workforce solutions business AMS found that the duration for global hiring is at an “all-time high.” The recruitment process now averages about 43 days, which the report calls “unsustainable if companies are to remain competitive and keep pace with the fast-changing needs of their industry.”
There is a perception that AI will ultimately cause a permanent shift in labor demand that will disrupt the work life of millions of Americans whose jobs will be lost, diminished or revamped partly through artificial intelligence. In a March 2023 report, Goldman Sachs predicted that 300 million jobs could be lost or diminished due to this fast-growing technology.
Organizations are also accelerating their efforts to send jobs to lower-cost countries. A 2023 Federal Reserve Bank of Atlanta survey found that 7.3% of leadership in the United States plans to move more jobs offshore as the next step from remote work within America.
“About 10% to 20% of U.S. service support jobs, like software developers, human-resources professionals and payroll administrators, could move overseas in the next decade,” Nicholas Bloom, an economist at Stanford University and an expert in workplace matters, told the Wall Street Journal.
Source: Forbes
