Is the American Dream a Mirage? Two in Three Americans Say So

In another discouraging sign of Americans’ persistent pessimism over the economy and prospects for upward mobility, the share of Americans who still think the American dream is attainable shrank for another year.

A recent Wall Street Journal/NORC poll finds that 34% of Americans believe that the American dream—if you work hard, you’ll get ahead regardless of your background—still holds true. 

This share is down two points from last year’s (36%), and down steeply from 2012, when over half (53%) believed so, or even from 2016, when just under half (48%) held that view.

Pessimism is on the Rise

Generally, the share of Americans who once believed in the attainability of the American has held steady at between 40% and 50% over the past decade. 

The growth in pessimism is truly among those who never believed that by working hard one could get ahead could get ahead. That share skyrocketed to 18% in 2023 from just 6% in 2023. 

These are individuals who no doubt not only feel left behind but left out. Younger generations are not hitting generational milestones of getting married, buying homes—a building block of generational wealth—and starting families. High housing costs and interest rates have kept them sidelined from the housing market. Meanwhile, many are saddled with student loan debt.

At the same time, many older generations find themselves less financially stable than they had anticipated in their later years due to sustained high prices and inflation. 

Homeownership is a critical but fleeting aspiration. Nearly nine out of ten people in the poll said homeownership is essential or important for the future. However, there’s a 70-point gulf between those who hold that view and those who say homeownership is easily (or somewhat) attainable.

Financial security and retirement rank even higher among Americans but are viewed as just as difficult to achieve as homeownership.

The Mobility Crisis

The affordability crisis today is robbing Americans of a decent standard of living and the prospects of a better future. Economic mobility is tumbling for younger generations, according to Harvard University and MIT economists. Their research found that mobility rates plummeted from approximately 90% for children born in 1940 to 50% for children born in the 1980s. Therefore, a Millennial has just a 50-50 shot of being better off than her parents compared to her grandmother, who was almost assured to be better off than her grandmother.

The prospect of moving up and leaving one’s children better off has always been the dream of generations. Due to inflation, rising costs, housing unaffordability, high interest rates, and other economic issues (some more recent and others a long time in the making), young people are pessimistic about the future.

Solutions

Time will not be enough to overcome generational delays. Policy changes are needed to right this ship. 

Beginning with housing, we need to expand the housing supply by increasing the construction of new homes as well as individual abodes on existing plots of land such as guest houses and finishing basements that can be rented out. 

To do so, policymakers at all levels should loosen regulations that add costs to the production of goods or the construction of homes, as well as reform land and zoning regulations. The outcome will be to trigger a housing boom that will ease housing price pressures in the long run. 

Next, cut taxes for businesses large and small to stimulate growth. Companies reinvest the savings into the business by purchasing new equipment or into their workforce through new benefits and higher pay. 

Allow individuals and households to keep more of what they earn. Don’t raise taxes on individuals whose paychecks are eaten up by inflation by allowing the 2017 tax cuts to expire, but make the tax cuts permanent.

Additionally, ease regulations. Repeal restrictions which make it difficult to start businesses and undo ill-advised new labor regulations that make it difficult to work independently or make money through gig work and side hustles. 

Bottom Line

Americans are not afraid to work hard to achieve their American dream. However, they don’t need the government to create obstacles and place unnecessary burdens on their shoulders.

Leadership that paints a picture of what’s possible again is needed in this time to inspire younger generations to believe that their American dream is indeed attainable.