Federal Reserve Just Declared the American Dream is Dead for Most Americans

Long the stuff of sardonic quip, it’s finally official: the putative American Dream — an iconic, white picket-fenced, rise-to-the-top-from-nothing bastion of hope for citizens and foreigners, alike — is officially dead.

21 Spine Chilling Duggar Family Secrets You Won’t Even Believe Sponsored by IFLMyLife In no small irony, the study divining what the vast majority of cynical Americans already knew came from the St. Louis Federal Reserve.

Stanford economist Raj Chetty, author of the study, sought to measure “the probability that a child born to parents in the bottom fifth of the income distribution makes the leap all the way to the top fifth of the income distribution.”

For a person to go from ‘rags to riches,’ in other words, has become nearly impossible in America — upward mobility is now as quaint and anachronistic as a Norman Rockwell painting.

“In the United States,” Chetty found, “children born to parents in the bottom fifth of the income distribution have a 7.5 percent chance of reaching the top fifth. That compares to about 9.0 percent in the United Kingdom, 11.7 percent in Denmark, and 13.5 percent in Canada.”

While these percentages appear generally low, Chetty points out that, because you literally can’t have more than 20 percent of people in the top 20 percent, the otherwise slight differences in economic mobility between nations in actuality represent stark contrasts.

“One way to think about it is this: your chances of achieving the ‘American Dream’ are almost two times higher if you grow up in Canada relative to the United States,” he explains. Apparently the American Dream requires a name change.

For the study, Chetty and colleagues analyzed economic mobility by U.S. county — and the resulting mapped data evinces pronounced disparities not only by region, but in several places, by counties in the same metro area.

Americans in the Southeast have the least overall opportunity to rise from the bottom fifth in income to the top — at just 4.8 percent, the number is “lower than any other developed country” the researchers examined — while a swath through the Great Plains, south to Texas, and, to a lesser degree, the West, appear to offer the most optimistic chance for such an economic leap.

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dream“Now, naturally the question of interest both to academics and policymakers is why does upward mobility differ so much across areas and, ultimately, what can we do about it?” the author queries.

“The first clues for us as researchers came from the fact that this spatial variation emerges at very early ages. In high mobility areas like Salt Lake City or San Jose, children from low-income families are more likely to attend college, and they’re less likely to have a teenage pregnancy. By the time they’re 16, 17, or 18 years old, a lot of these patterns have already emerged. The reason that’s important is that it points to factors that affect children not just once they’re in the labor market but before they start working. It suggests that childhood environment could be extremely important here.”
Read more at http://thefreethoughtproject.com/federal-reserve-american-dream-dead/#zq6YWSEfcxMfI7oQ.99