Is American dream fragile? History says it's strong.
The tea partyers and the Occupiers clash on just about everything: the role of government, the cause of the nation's economic woes, and solutions to them. But they agree on this: They fear that the American dream is vanishing.
For tea party activists, the dream seems on the verge of being finished off by higher taxes and bigger government. For the young Occupy Wall Street protesters, the dream seems unlikely to get started.
"You have both the tea party element out there – people who are going to have stuff taken away – and you have youth that have got it right: that they're going to live in their parents' broom closets for the next decade," says Lawrence Rosenthal, executive director of the Center for the Comparative Study of Right-Wing Movements at the University of California, Berkeley.
More than 70 percent of Americans rate their standard of living as fair or poor, just the reverse of what they said before the Great Recession, according to an October American Pulse Survey. Nearly half of young adults think their generation will be worse off than their parents', according to a survey by policy center Demos and a youth advocacy organization called Young Invincibles. Just as in the Great Depression, the last time that the United States endured a major financial crisis, the future looks bleak.
But the long-term future is not as nightmarish as it may look. Once the Great Recession is firmly in the rearview mirror, someone with talent and a good work ethic will still be able to move up.
That's been the historical record despite recession, war, stagflation, and other economic problems, according to three economists who analyzed Social Security data going back to 1937. The ability to get ahead during one's career – what economists call long-term mobility – has been increasing for the past 60 years.
The details are a bit less cheery. The driving force behind that improvement is the dramatic rise in long-term mobility for women. In 1980, 2 percent of the top fifth of income earners were women; by 2004, they represented 14 percent and their share was still growing rapidly. In the next fifth of earners, women moved from 8 percent in 1966 to around 34 percent by the early 1990s. That dynamic has overshadowed a slight decrease in men's mobility in recent decades.
What about the kids? Two-thirds of them are doing better than their parents, thanks to economic growth, according to a 2008 study by the Pew Charitable Trusts in Washington.
The Great Recession may stall these trends. What's remarkable, though, is their staying power over the decades, especially in the face of mounting income inequality. Even as the rich have been getting richer, people in the middle class (especially women) have seen their situation improve and their children, on average, earn more than they did at a comparable stage.
Women's long-term standing is likely to keep improving because they are still making strides into most of the top echelons of income earners, says Wojciech Kopczuk, one of the three authors of the mobility study and economics professor at Columbia University in New York.
The American dream looks a little deflated right now. But don't count it out in the long run.