'American Dream' Proves Elusive for Many --- Journal poll finds younger generations particularly struggle to meet key goals

 

"Americans overwhelmingly desire all the traditional trappings of the American dream -- owning a home, having a family and looking forward to a comfortable retirement. But very few believe they can easily achieve it.

A July Wall Street Journal/NORC poll of 1,502 U.S. adults shows a stark gap between people's wishes and their expectations. The trend was consistent across gender and party lines, but held more true for younger generations, who have been priced out of homeownership and saddled with high interest rates and student debt.

While 89% of respondents said owning a home is either essential or important to their vision of the future, only 10% said homeownership is easy or somewhat easy to achieve. Financial security and a comfortable retirement were similarly labeled as essential or important by 96% and 95% of people, respectively, but rated as easy or somewhat easy to pull off by only 9% and 8%.

Twelve years ago, when researchers at Public Religion Research Institute asked 2,501 people if the American dream "still holds true," more than half said it did. When The Wall Street Journal asked the same question in July, that dropped to about a third of respondents.

By many measures, economists say, people are right to feel that their shot at success has diminished.

"Key aspects of the American dream seem out of reach in a way that they were not in past generations," says Emerson Sprick, an economist at Washington, D.C., think tank the Bipartisan Policy Center.

Sprick points to the continued decline of private-sector pensions -- leading to their near-disappearance -- and the surge in the cost of homeownership as two of the biggest economic changes over the past decade.

Marquell Washington remembers that his elementary-school teachers instilled in him that high grades and a college degree would be his ticket out of the Chicago neighborhood where he grew up "hearing gunshots every day."

The promise, the now-22-year-old says, was that "you'd get a good job and enjoy the rest of your life in a house with a front gate." He was the first person in his family to go to college but dropped out during his junior year after three of his close friends were killed within months of one another.

He now makes around $30,000 a year working part time for a youth development nonprofit My Block, My Hood, My City. He says he can't afford to move out of his mother's Section 8 apartment where he grew up, let alone to resolve the $10,000 debt he needs to transfer his transcripts to a school closer to home. He hasn't given up on his American dream, he says, but he's finding it much less straightforward than he thought.

"They don't tell you how hard it is to obtain the American dream," says Washington. "You have to learn that on your own."

Economic mobility has declined in recent decades on the whole, economists say.

While around 90% of children born in 1940 were ultimately better off than their parents, according to research by Massachusetts Institute of Technology economics professor Nathaniel Hendren and Harvard University economist Raj Chetty, only around half of those born in the 1980s were able to say the same. Younger cohorts appear to be in a similar position based on median income growth, Hendren says, but likely experienced a slight post-Covid boost as wages for lower-income Americans have outpaced other earners.

"It's still a coin flip whether or not you'll earn more than your parents, but mobility probably hit a record low in the early 2020s," Hendren says.

Chetty looks at the American dream through the lens of how difficult it is for someone starting in a poor family to reach the middle class. For white Americans in particular, that goal has become significantly more challenging over the past 15 years, he says.

"People are right to feel that the American dream has become harder to achieve both in terms of their chances of doing better than their parents and their chances of rising out of poverty," Chetty says.

Many are struggling to achieve their goals of homeownership. Owning a home was a record 47% more expensive than renting for the 12 months ended in June, according to research by commercial real-estate services firm CBRE. 

That is even after rents have skyrocketed -- though the firm forecasts improvement over the next year.

Lily Roark's father bought the eight-bedroom New Orleans fixer-upper she grew up in for $160,000 in the early 2000s. When she went to look for houses in Louisville, Ky., with partner Jessica Holland this past spring, she was sure $250,000 would be a big enough budget for a starter with one or two bedrooms.

Instead, "we were looking at houses that had no walls and no floors," says Holland, a 28-year-old second-grade teacher.

Since Roark and Holland still want to give priority to saving for a house, the couple feels as though they can't move forward with any of their other life goals -- getting engaged, having a wedding and planning for children.

They are both frustrated that homeownership and family formation seemed so much more attainable for their parents, who made less than their combined income of around $100,000 at their ages.

"We're doing everything right, we're saving, we went to good schools, I have a master's degree, and it's still so hard," Holland says.

Wealth inequality has increased over time, according to an analysis of Survey of Consumer Finances data by Scott Winship at right-leaning think tank the American Enterprise Institute. 

In 1989, the typical net worth of the wealthiest 10% of households was just under 15 times the overall median net worth for all Americans, compared with almost 20 times that number in 2022.

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Marriage Seen as More Difficult

In Des Plaines, Ill., 31-year-old Kevin Murphy believes even finding a partner is more difficult than it used to be because of how expensive dating has become. He worries that he is less desirable than someone who makes more than his $95,000 yearly income or owns a home.

In the WSJ/NORC poll, 62% of people said marriage was either essential or important to their vision of the American dream, but only 47% of people think it is easily attainable.

"For me, the American dream feels further away than it's ever been," says Murphy, who works in government affairs for an energy company. "I worry about when I'm 50 or 60 and if nothing changes, I'm going to be totally screwed."

He interacts with Americans in that position in his side job as founder of a nonprofit that provides free home maintenance to people in need. "I take care of these people who trade insulin for groceries," says Murphy." [1]

1. U.S. News: 'American Dream' Proves Elusive for Many --- Journal poll finds younger generations particularly struggle to meet key goals. Wolfe, Rachel. Wall Street Journal, Eastern edition; New York, N.Y.. 29 Aug 2024: A.2.