Is the American dream fading?

FinDroid's picture
Rank: Gorilla | 566

Was reading this article in the Journal which mentioned that barely half of 30-year-olds earn more than their parents did at a similar age. In numbers, only 51% of American 30-year-olds earned more when compared to 92% in 1970.

Wages have stagnated in the middle class. When you're in that situation, it becomes very hard for children to do better than their parents.

Even at Donald Trump's promised 3.8% annual growth rate, the percentage of children able to outearn their parents rises to only 62%. Many economists predict that the US is likely to grow at around 2% a year.

Was curious to know the views of the WSO community. Is this one of those articles predicting gloom for the sake of doing it or do you think that the issue is for real?

Comments (126)

Dec 15, 2016

Yes

Although nothing was guaranteed. The only thing that was guaranteed is possibility for the opportunity to move up from poor to middle class to rich. As hard as someone thinks that is, it is still the easiest and only country in which hard work and drive will be rewarded and pay off eventually sometimes.

Dec 16, 2016

Nice, thanks for the jingoistic platitudes. You forgot to mention the troops, but good post overall.

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Dec 16, 2016

That's just not true, and I mean that is empirically proven to be false. Plenty of research has been done trying to measure and explain what America's opportunity is relative to anywhere else. That blind ignorant emotional truth is one of many reasons America will never be able to offer the best opportunity or even equality in opportunity.

Dec 16, 2016
ArcherVice:

That's just not true, and I mean that is empirically proven to be false. Plenty of research has been done trying to measure and explain what America's opportunity is relative to anywhere else. That blind ignorant emotional truth is one of many reasons America will never be able to offer the best opportunity or even equality in opportunity.

What research are you referring to?

Dec 27, 2016
  1. "Although nothing was guaranteed. The only thing that was guaranteed..."

...Do you seriously not see that contradiction?

  1. "The only thing that was guaranteed is possibility for the opportunity to move up from poor to middle class to rich."

How and where exactly was this "guaranteed"? What do you mean by "possibility"? Steve Jobs could do it, so some random kid born in the ghetto of St. Louis has a fair shot at becoming a millionaire too?

  1. "It is still the easiest and only country in which hard work and drive will be rewarded and pay off eventually sometimes."

You cannot seriously believe this. This might be the single most ignorant statement I've read on WSO. Congratulations.

Edit: to clarify my 3rd point--mainly for whom I'm responding to--other countries have quantitatively more social mobility. So, arguably, the "American Dream" is more alive in, say, Denmark. Regardless, asserting that the USA is "the only country" is absolutely untrue and categorically ignorant.

Social Mob

Wiki article: https://en.wikipedia.org/wiki/Social_mobility

"A modest man, with much to be modest about"

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Dec 27, 2016

Isn't comparing one countryman's quality of income versus the countryman living in a different country like comparing Snapchat to Duke Energy? You're looking at totally different sets of profile characteristics.

If you look at it from the higher view so as to compare the quality of life that one country provides to its countryman with that of some other country, comparing country to country based on individual countrymen, that's like completely failing to acknowledge individual drivers, like number of smartphone users in the Snapchat example. More pragmatically, it's defeating to sound out a one-dimensional assessment of the data you're looking at. Graphs like that don't necessarily state that America is failing, it's moreso that the drivers might be slowing, plateauing, or reversing. Harder to find the correct answer at that point.

Dec 15, 2016

No, that is a stupid question. It isn't fading, it is changing. You want to know what isn't mentioned in that earnings discrepancy. Hours worked, on average Americans under the age of 30 work roughly 85% of the hours their parents worked at the same age. It's a bullshit metric to push a narrative.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

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Dec 15, 2016

Are you sure about the hours? I don't see white collar jobs being less stressful or time-consuming than what they were back then.

Dec 15, 2016

The hours are on aggregate, there are people who work more than the average and people who work less. That isn't saying that the jobs are less stressful or more stressful. It is merely saying that the working landscape is changing. Granted the numbers are taken from analysis of W-2 claims made by employers so it wont necessarily pick up the amount of time people spend working on their own things.

Also judging your analysis purely on white collar jobs isn't a good reference point.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Dec 16, 2016
heister:

No, that is a stupid question. It isn't fading, it is changing. You want to know what isn't mentioned in that earnings discrepancy. Hours worked, on average Americans under the age of 30 work roughly 85% of the hours their parents worked at the same age. It's a bullshit metric to push a narrative.

I feel like this is grossly inaccurate.

Nothing chaps my hide more than people trying to act like yesteryear's generation was so much better than the current.

With college tuition increasing exponentially just from two decades ago, and many of the professionals in the workforce not retiring b/c the Great Recession, then you're going to have a change in what the "American Dream" is b/c America has changed.

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Dec 15, 2016

You can bitch about it all you want, doesn't change the numbers. You have to remember that a report like this doesn't mean that younger people are less driven than their parents. It is merely a reality of a situation, there are plenty of people who work less hours at a traditional job and then do their own thing part time. I'm just bringing up another analysis that uses the same base analysis metrics of the referenced report.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Dec 17, 2016

No, I went to PUBLIC high school in New Jersey that is almost entirely made up of Indian and Chinese immigrants. Our parents worked insanely hard in their home countries to go their own top schools and give us a better life. Despite the school being upper middle class, there was a huge emphasis on hard work, education, extracurricular, and future success.

None of us were legacies or were desired minorities but at least 50 got into top schools, 50 got into semi-prestige schools, and the other 200 went to Rutgers/ Penn State/ Maryland. Even the lazy and moronic went to college because the emphasis on education had rubbed off on them.

Success isn't even a possibility in the majority of the world, people have NO IDEA the opportunities and quality of life that is possible here.

America has horrible faults like its criminal justice system, but even then we don't torture or cut organs out of disliked minorities like they do in China (Falun Gong).

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Dec 16, 2016

Totally true.

Dec 15, 2016

You have to remember that the people who protest in America do so on the idea of relativism. The only issue is their comparison is some utopia they built up in their heads and not the reality of the rest of the world. That doesn't mean you can't improve, but it also means you as a country are a fuck of a lot better than almost everyone else.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Dec 27, 2016

Good comment, but your (seeming) implication that Big Ten schools are mediocre & for mediocre students is rubbing me the wrong way, especially since you're talking "relativism". This will get a bit rant-y.

There is a difference between quality of education and prestige. Rutgers/Penn State/Maryland, in a lot of ways, have equal educational quality to Ivy League universities. Econ 101 is Econ 101 at both universities. In a few ways, Big Tens are arguably superior (meritocracy, more extreme opportunities, etc.)

Bottom line is while Ivy Leagues are way more prestigious and have quantitatively better students, they're not way superior academically.

Disclaimer: I go to a Big Ten, rose to the top of the meritocracy and bureaucracy, and am proud of it. Also, my PUBLIC high school was, like, 51st percentile, and most of the top 10% of the class went to the local Big Ten. Most PUBLIC high school are fundamentally incapable of sending a lot of their best students to Ivys (and there's a positive correlation between household income, public high school quality, and SAT/ACT scores), so please don't knock flagship public universities.

(Wow, this tied in nicely with the thread topic.)

"A modest man, with much to be modest about"

Dec 27, 2016

I think that as the U.S. was coming into it's own, it had a lower base on which to establish much higher growth. That would have translated into a 'coming in' to things, so to speak, where more people were getting more jobs with higher wages. Plus, in 1970, many baby boomers weren't even 30 yet. The population today is about 54% larger than then.
Like Bill Burr says, it's too many of us idiots here now--people that don't know how to make a left fast enough when driving, or too indecisive to make their minds up when ordering food. We'll probably get to something more economically balanced again over time as the population continues to shrink.

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Dec 15, 2016

Don't forget to factor in the fact that while wages haven't grown, money spent on benefits for employees has (healthcare)

Dec 15, 2016
George Kush:

Don't forget to factor in the fact that while wages haven't grown, money spent on benefits for employees has (healthcare)

I would love to see the earnings of healthcare workers and their wage growth versus the general public.

Dec 15, 2016

Let me know if you pull the data. I hear the party is over tho

Dec 16, 2016
Big4please:

George Kush:Don't forget to factor in the fact that while wages haven't grown, money spent on benefits for employees has (healthcare)

I would love to see the earnings of healthcare workers and their wage growth versus the general public.

The real chart is the growth of healthcare administration versus clinicians.

https://fee.org/articles/the-chart-that-could-undo...
Then there is this article about where a lot of the high salaries are:

https://www.nytimes.com/2014/05/18/sunday-review/d...

Dec 15, 2016

What economists are predicting 2% per year economic growth? Is that why the Fed just raised rates? Is that before or after massive business tax cuts and reform?

Dec 27, 2016
Virginia Tech 4ever:

What economists are predicting 2% per year economic growth? Is that why the Fed just raised rates? Is that before or after massive business tax cuts and reform?

Fed, 2017 forecast

Dec 15, 2016
iBankedUp:

Virginia Tech 4ever:What economists are predicting 2% per year economic growth? Is that why the Fed just raised rates? Is that before or after massive business tax cuts and reform?

Fed, 2017 forecast

Well, as usual, the Fed is completely wrong about everything.

Dec 16, 2016

Every forecast I've seen has been somewhere in that ballpark. Most I have seen are before any tax cuts/reforms.

Dec 16, 2016

The American dream is still alive but has weakened due to 1.) high-paying blue collar jobs declining in number 2.) the cost of college education being outrageous and 3.) the cost of healthcare also being outrageous. We can reverse this trend by 1.) finding a way to increase pay/ benefits for service workers 2.) training our populous through trade schools and the like to occupy high-skill blue collar jobs and 3.) finding a way to decrease the cost of healthcare and a college education. Lowering taxes on the middle class (especially families) would help as well.

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Dec 16, 2016

.

Dec 16, 2016

I think not much has changed at the college educated level but blue collar is getting killed. My father and uncles on both sides either didn't graduate high school or hardly made it through. Pretty much all of them are at or close to 6 figures in union or other blue collar professions. The kids I knew who didn't make it to college are mostly working shitty $10-$15/hr jobs.

Dec 18, 2016

This might be mostly true but with the caveat that student debt has increased massively.

Dec 16, 2016

Oh.... I know the feeling.

Dec 16, 2016

As a millennial, I can tell you that many in my generation are disloyal assholes who want to all invent the next Facebook. Our parents worked their asses off. How many stories have you heard from your parents where they had to take a bus or bicycle because they couldn't afford a car.

The problem now is that the new generation believes they are entitled to make a lot of money and they all want to be millionaires before they hit 30. I am sure many of you can look around and see for yourself how many of your friends think they believe they are the lovechild of Mark Zuckerberg and Elon Musk. There is nothing wrong with entrepreneurship, in fact it creates a stronger economy and job growth, but to just try to use that as a means to get rick quick shouldn't be the primary reason.

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Dec 16, 2016

I'm gonna have to respectfully disagree here. Having graduated from high school less than four years ago, the level of competition American students face as a result of globalization these days is unreal. Can you really say that kids growing up in America in the 70s and 80s, before any real competition existed from the rest of the world, had it tough? The top graduate programs are all filled with students educated in China, India, or some other foreign country. From what I've heard from those of age, in the 80s getting A's was enough to get into top colleges, and a top college was enough to get the best jobs. Not the case anymore. To me, it's not surprising that kids are idolizing serial entrepreneurs and striving to create their own unicorn startups. It's the only way to stand out in this day and age.

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Dec 25, 2016

THIS. To quote my father (born 1938): "when I graduated from college, all you needed was a degree, a white face and the ability to talk without stuttering to get a good job."

Dec 16, 2016

I know people who think a 25% annual return is "shitty." Anything short of turning a $10,000 investment into millions within the next few years is unacceptable and not worth investing in. If there's one thing I think kids should learn in high school, it's the power of compound interest. Principle*(1+r)^n is a formula that can make sure you retire comfortably.

Dec 27, 2016

I wanted to respond to your post point by point to show you just how terrible it is, but you don't make any points, so its tough to do that. nonetheless...

1) "Disloyal assholes who want to all invent the next Facebook" - what does that even mean?
2) "Our parents worked their asses off" - Yes, yes, yes. The old, "back in my day, I had to walk uphill both ways argument." None of which changes the fact that by any measure, our parents had it much easier than the millenial generation. The boomer generation was one in which a high school education could provide you a union job with health-care, pension, and enough income to raise a family of 4 for one wage-earner.
3) "The problem now is that the new generation believes they are entitled to make a lot of money and they all want to be millionaires before they hit 30." - Not even you believe this, do you? You actually think THE MAIN REASON the economy no longer functions the way it did in 1993, is that millenials (most of whom aren't even in positions of authority) are too entitled? The generation that has had to work harder just to make it in to college, burden themselves with tens or hundreds of thousands in student debt to graduate, and then faced the poorest hiring economy in over 50 years for entry level grads is too entitled.
4) The point of entrepreneurship is to get rich you idiot.

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Dec 16, 2016

The promise barely come true in real world. Good will win the world.

English man in WSO, fresh off the boat.

Dec 17, 2016

US is good place to get education, start a successful career, then when you have a family move to france, then when you retire go to Italy, is simple equation

unfortunalty i'm 3 rd world citizen, i get to live all my life in my country

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Dec 25, 2016

lol - couldn't have said it better except for Italy, fuck Italy - stay in France.

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Dec 18, 2016

"Even at Donald Trump's promised 3.8% annual growth rate, the percentage of children able to outearn their parents rises to only 62%. Many economists predict that the US is likely to grow at around 2% a year."

Haven't looked at that report. Their model may weight growth to the multinationals, which are not as impactful as small and medium enterprises. A lot of Trump's targets would impact small and medium enterprises.

Also, education is huge. US k-12 system is pretty bad. The best state, Massachusetts, performs about the same as Vietnam--which gets by on a lot less money. DeVos might send this in a better direction.

Dec 20, 2016

Since the tech revolution of the 80's the world has been on a very strong bimodal trend. While many people have known this for decades only recently has it become strong enough to be obvious to the everyone. Let's look at a few examples.

In Silicon Valley, even the shittiest of companies pay a new grad in CS around $130k all-in first-year ($110k base, $20k in bonus/equity). Non-tech companies, meaning companies who's business isn't tech, pay much worse, around $70k in salary and maybe $10k in bonus. Even the worst Silicon Valley programmers will hit $225k in their careers. The best non-Valley programmers will struggle to crack $150k without jumping to pure-tech companies.

Law compensation is similarly bimodal. Look at the data from http://danluu.com/bimodal-compensation/. Cravath-level firms pay $180k for new lawyers while lower level firms pay minimum wage.

Even college majors are strictly bimodal. Study CS or finance to get a real job after college. Nothing else comes close. Salaries are falling across the board in fields of engineering outside tech and humanities graduates are even more unemployed than ever before.

Dec 15, 2016

The higher the pay is per man hour the greater the incentive is to become more efficient.

Dec 25, 2016

The average American seems to spend all his time working hard to make other people rich. Here in europe, we don't work hard and nobody gets rich :) :) :).

Dec 16, 2016

1.) you wonder why youth unemployment is outrageous there
2.) This system just keeps money in the hands of those who are already rich

here is an article on the subject from Bloomberg: https://www.bloomberg.com/news/articles/2016-08-23... (lol 65% of German billionaires inherited their wealth versus 29% in the USA, what a rigged joke)

Dec 25, 2016

Mm..Europe is quite a diverse place. Where I live, for example, youth unemployment is not really a thing (in fact its lower than the States its seems)

With respect to the inherited wealth point (the article was great by the way read it when it was first published), I completely agree with the stats presented but that is a matter of perspective really.

The american dream necessitates self-made wealth and social mobility because of the lack of social protections. I live and work in a place where I can't get a call back after 18.30h (nor on weekends) and where the lunch break is viewed as a sacred rite.

The point being that these people arguably don't see much social utility in getting rich and arguably view the status quo of sloth and siestas as a fair trade-off. A higher standard of living across the board with less social mobility seems to be the preference over here.

So, perspective.

Best Response
Dec 27, 2016

I think all of you are looking at history in the wrong context.

We haven't had a draft in 40 years. We live in an age where nuclear war isn't a real probability. We live in a time where there isn't segregation, where gays can marry, where women are equals. We live in a society where you can get a loan if you want to go to college, where home ownership is attainable for nearly everyone, where the barriers to start your own business are as low as they have every been.

Talking about our parents or their parents and how great they had it is putting on rose colored glasses. The world is more competitive now because we have billions of more people living in a developed world. Society has become infinitely more complex. You no longer can expect to make $30-$40 an hour with a high school degree because the world is much more complex and requires more knowledge.

And complaining about how past generations fucked future generations fails to give credit for the sacrifices past generations made so we could sit here on on the internet and lament the good ol' days.

WWII, Korea, Vietnam, none of which we will every experience or worry about. Nuclear fall out drills are something we will never live with. We will never lived with forced desegregation in the south, women fighting for the right to have an abortion, the AIDS epidemic. Past generations have lived through economic booms and busts, just as we do.

Kids nowadays look longingly to the past because options presented to 18 year old kids are so expansive and allow for mistakes to be made. "Back in the day" you didn't have the option to go to college. You didn't have the option to party your face off, Tinder til your dick rot off, engage in Wunderlust. You graduated high school from your small town, married the chick you met in school, had kids by 24 and worked your ass off. You had a house and a two car garage, yes, but it wasn't MTV cribs. People started small and worked their way up.

If you are $100K in debt with a menial job that isn't the past generations fault. It is yours. You can work through school, go part time, go to a cheaper school, etc. I am sorry, but it should be only a teeny tiny number of people who incur six figure debt.

But alas, this is the problem. Kids look at college as an "experience", instead of looking at it as an investment in ones career. They travel, party, get laid and then when the piper comes, they bitch about Member Berries and how they got fucked. Sorry, but you made your bed, now lie in it. Pick the cheaper school, party less, graduate with $10-$20K in debt and find a decent job and work hard. You don't need the Omega at 22. You don't need the ballin' apartment. You don't need West Elm everything on your first apt. You don't need to travel Europe for 6 months and rack up debt.

Past generations did a lot less bitching and a lot more hard working. Yes, opportunities for a high school graduate are a lot less, but that is the worlds fault, not a past generation. And complaining about national debt and future costs that our "past generations" put on us is comical when this current generation elected twice a man who doubled our national debt. Blaming Ma and Pa for SSI while we added $10T to the deficit is a joke.

In conclusion, stop being a pussy, own up to your choices and get working hard. World isn't going to be any less competitive because you are angry that your dad drives a range rover at 50 and you only have a 3 series at 25. Boo Hoo.

Dec 16, 2016

Damn. Great post.

Dec 27, 2016

TNA, you're a great poster, I love what you have to say, you say it with eloquence and then some. You're more successful, older, and wiser than me.

That said, I disagree with (or at least have questions about) parts of it. I'm open-minded, but this is my take on it, as a twenty-something Millennial:

  1. "We live in an age where nuclear war isn't a real probability."

Trump won. A Harvard Medical School professor of psychiatry wrote to Obama demanding a psychiatric evaluation of Trump. Have you seen Trump's tweets recently?

  1. "We live in a society where you can get a loan if you want to go to college,"

This is a fact. However, the interest on said loans are relatively high and hard to understand for 18-year-olds, many of whom are not required to take a single personal finance class; high school grade inflation is giving incorrigibly irresponsible 17-year-olds arrogance and ideas like "paying full sticker to Drexel University is a great idea!"; and in general, if these kids don't have fully-formed brains and legally aren't responsible enough to have a Bud Light, how can they make these important life-altering decisions?

(I speak about a shameful lot of the above from experience.)

  1. "where home ownership is attainable for nearly everyone,"

Bloomberg: Homeownership Rate in the U.S. Drops to Lowest Since 1965 Systemic young personal financing dumbassery, described above, I believe, is a major culprit of this.

  1. "where the barriers to start your own business are as low as they have every been."

CNN: Where are all the startups? U.S. entrepreneurship near 40-year low

Again, I ask, why is this the reality if the barriers are at an all-time low?

The rest of your post I agree with. All of it is definitely thoughtful & thought-provoking.

"A modest man, with much to be modest about"

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Dec 16, 2016

I've been agreeing in this thread most of the points you're making, but I just felt TNA wrote a great counter-post to keep things in perspective.

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Dec 27, 2016
Fetty VWAP:

TNA, you're a great poster, I love what you have to say, you say it with eloquence and then some. You're more successful, older, and wiser than me.

That said, I disagree with (or at least have questions about) parts of it. I'm open-minded, but this is my take on it, as a twenty-something Millennial:

  1. "We live in an age where nuclear war isn't a real probability."

Trump won. A Harvard Medical School professor of psychiatry wrote to Obama demanding a psychiatric evaluation of Trump. Have you seen Trump's tweets recently?

  1. "We live in a society where you can get a loan if you want to go to college,"

This is a fact. However, the interest on said loans are relatively high and hard to understand for 18-year-olds, many of whom are not required to take a single personal finance class; high school grade inflation is giving incorrigibly irresponsible 17-year-olds arrogance and ideas like "paying full sticker to Drexel University is a great idea!"; and in general, if these kids don't have fully-formed brains and legally aren't responsible enough to have a Bud Light, how can they make these important life-altering decisions?

(I speak about a shameful lot of the above from experience.)

  1. "where home ownership is attainable for nearly everyone,"

Bloomberg: Homeownership Rate in the U.S. Drops to Lowest Since 1965 Systemic young personal financing dumbassery, described above, I believe, is a major culprit of this.

  1. "where the barriers to start your own business are as low as they have every been."

CNN: Where are all the startups? U.S. entrepreneurship near 40-year low

Again, I ask, why is this the reality if the barriers are at an all-time low?

The rest of your post I agree with. All of it is definitely thoughtful & thought-provoking.

1) Hillary, not Trump was talking about a no fly zone in Syria which would have put us in direct conflict with Russia.

Nuclear war comes from a conflict with Russia, China or another nuclear capable, intercontinentally ballistic capable power. Plain fact is, Trump has been respectful to Russia and firm, but respectful to China. Furthermore, we've had this "pivot to Asia" for a while. Don't blame this on Trump.

http://www.express.co.uk/news/world/732135/donald-...
Here is your counter. Trump has been pretty loud about his isolationist, make other countries pay for our protection, rhetoric.

Sorry, but Trump being elected isn't moving us closer to war. Furthermore, this lacks historic context. Trump being elected is nothing like the Cuban Missile Crisis or the Cold War.

2) Kids have zero assets, zero work experience and they get loans for massive amounts. They are lucky the rates aren't even higher. Most Fed loans do not have interest while in school (private loans do). Once you graduate the interest runs. Yes, it is higher than a mortgage (which has collateral), but lower than most unsecured personal loans. Should the rates be lower? Maybe. But that is another discussion.

Plain fact is, all kids have a chance at going to college, something that used to be reserved for well of people. Furthermore, the range of educational opportunities has expanded (online, PT, certs, open courses, CFA.CAIA, etc).

Young kids are dumb because they are sheltered. You make your kid do a paper route or work for their first car and I guarantee they will understand what a six figure loan is. Personal responsibility starts right away.

3) Home ownership has decreased because traditional lending status has decreased. Years ago you had redlining, effectively stopping blacks from buying in certain neighborhoods. Anyone can buy a home if they put down 20%.

http://www.economist.com/blogs/graphicdetail/2016/...
This is a chart of major metros. You go outside this and you find nice, 2-3 bedroom houses for $100K or less. That is $20K in a down payment. Is that a lot of many people? Yes. Is that reasonable for a married couple to save? Yes.

Home ownership declined because it was artificially inflated through both government policy and financial engineering.

4) You're talking about startups that CNN reports. I am talking about normal people creating a website, selling on ETSY, driving UBER. It has never been easier for normal people to start their own business, either as a primary earning entity or as an income augmenter.

Conclusion - This discussion should be viewed from other people's perspectives. Maybe Americans have less options of success doing the bear minimum. But, conversely, people from around the world finally have an opportunity to advance and succeed. Imagine this question being posed to Indian or Chinese young people and imagine the different answers we would see.

Also, lets be real. Back in the day people didn't study Gender Fluid Poetry as a major and do well. People did well in manufacturing and in white collar management or accounting/legal/medial. Obscure degrees were reserved for the rich, as they should be today. But the government allows people to take debt and do what they want. Then they bitch. And if the government restricted student loans to only business or medical, people would bitch.

http://thirdtierreality.blogspot.com/
Please reference above for educated, lawyers bitching at schools and the government for allowing them to get into debt.

Laws of Nature - Humans bitch when they have no options and bitch when they have too many. Humans Bitch. End of Story.

Dec 27, 2016

For those who can read Chinese, check out this
blog post
https://daily.zhihu.com/story/9092370?utm_campaign... .

For the English audience, check out these key references:
The Fading American Dream: Trends in Absolute Income Mobility Since 1940

The Equality of Opportunity Project (source for the picture below)

The Fading American DreamMatt Kahn's Blog post - Relative Income Disparity between Generations
Of course, one must not forget the gloomy sabermetrics folks over at Political Calculations with their analysis on the housing market and the median household income:

Housing Price vs Median Household Income

Food for thought.

Dec 27, 2016

+SB. Graphs like these always merit a SB in my book.

"A modest man, with much to be modest about"

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Dec 27, 2016

Good topic well worth discussing. This is why I like you guys (& Wall St. in general); despite being smart & successful, you guys don't avoid topics like this or let confirmation bias take over your brain.

First and foremost, defining the "American Dream" is the crucial first step. I define it as basically a synonym of socioeconomic mobility.

OP: "Fading" is the right term. "Dying," which is often used, is not. Because death is an absolute state, and the concept of the so-called American Dream cannot die unless the USA somehow reaches 0 social mobility.

I agree that it is fading, because I "believe" in the economics of social mobility. Income & wealth inequality are increasing, and this trend is directly inversely correlated with the core concept of The Dream. Frankly, if the middle class were starving, guys like Bernie Sanders could spark a legitimate violent revolution. Not enough people are starving for that. Not yet. Maybe (hopefully) never, due to a myriad of reasons. I think suburbia would make such a revolution a logistical nightmare, but that's tangential.

On the other hand, WSO exists. The Internet is a game changer. Everyone can Google "How to become successful/rich/happy/etc."

Guys like Gary Vaynerchuk and Martin Shkreli exist. I once read that billionaires are disproportionately likely to be born and raised in poverty. However, they all are the exception, not the rule.

A lot of Americans (particularly older and retired ones due to confirmation bias) are ignorant of this trend in social mobility, and/or confuse anecdotes of "I'm successful & you can too!" for the rule. Statistics reflect the capital-T Truth. Statistics indicate that socioeconomic mobility is decreasing. So if you define the "American Dream" as "socioeconomic mobility," yes, I believe the Dream is fading.

However, something I think we can all agree upon is that the vast majority of Americans, despite believing in the American Dream, never ask "What, exactly, is the American Dream?" That's a damn shame, because the definition is important.

"A modest man, with much to be modest about"

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Dec 27, 2016

This is a very deep topic of discussion for me as I am a first generation immigrant and a Veteran (US Navy). I will share two view points and see what others think.

  1. The Dream as per my family and myself
  2. Evolution of The Dream as a function of time

1.a) The American Dream as per my parents

Abstract: Stable life so that their children may have a fighting chance to chase the American Dream as per their children.

Background: My mom could have taken more riskier routes, like studying for the USMLE to be become a board certified Physician (She wanted to be OBGYN), but instead she opted to build and grow her career from her PhD. She is pretty successful now working as a Director and was previous a full tenured Professor. My Dad had to pivot as his degree became worthless here in the USA so he opted to get a Masters in IT. He left a very well respected Government position in China to become a housekeeper at a Hotel to make ends meet for the family.

Growing up, I was teased for being slightly below middle-class because that's what bored children do and understandably their feeble minds couldn't understand my world peering over from their white picket fences living a silver-spooned lifestyle. Good friends stuck around, bad acquaintances got dropped and ended up as shitheads in real life anyways later in life; go figure, sometimes being spoiled spoils a person.

Even in the sport of academics, having the proper and adequate resources at the necessary times makes or breaks your relative rank or success vs. your competitors. As mentioned before, if we played trading places I would have leveraged the resources found in more fortunate households above and beyond the average child could have ever done with them. Why? I'd be busy working or helping others and not teasing the less fortunate. Idle hand's are the devil's workshop and my definition of fun differs from theirs.

Parent's American Dream: They wanted to get to middle class baseline and provide for their children (me and sibling). Taking unnecessary risks that could hinder or deviate from this goal is unacceptable. 1st Gen Parents value stability above all else.

1.b) My American Dream
Abstract: Work in progress. Dream big, do cool things. Military paid well and allowed me to serve my Country and hone in on my leadership skills. This allows me to take bigger risks to break out of the typical Middle-class life.

Background: If my parents busted their ass to get to this country after surviving Communism and the Cultural Revolution and all I end up Middle-class, which is no further than they got, then shame on me for being a worthless human being. The forefather of my current organization said it best: "I would rather earn 1% off a 100 people's efforts than 100% of my own efforts." Calculated risks and applying leverage through leadership of an organization (Army of people or Fleet of Ships) is the only way to make it to the top.

My American Dream: Mentioned in the conclusion below.

2.a) Change of the American Dream through time
Change through Time: It wasn't always so. My parents didn't take risks but they imposed different end-game scenarios on myself and my sibling. As they grew and matured in their American journey, these end-game scenarios relaxed over-time and now have disappeared entirely. They now trust that the decisions we make is the best for us for the time being.

2.b) Motivations for this change
Why this occurs: Goals and visions are discovered through time with experience and self discovery. For instance, my concept of the American dream was first categorized as per job listings starting from Entry-level progressing to Senior positions, then it became a progression of pay from five to six figures (low to high six, etc), and now it has become absurd because I have more experience and knowledge and can leverage them to build teams and companies. I went from being a foot soldier to a leader and in my mind being a leader is where I belong.

Conclusion: I think it is wonderful to have a healthy debate about this topic and exchange ideas. Quite frankly nothing is right or wrong here as this is a game of perception where everyone can be right or wrong.

So long as you are true to yourself and add value to society in doing what you do then you are on the right path to success. For me, that's the American Dream.

Don't worry about journalists or historians telling your tales. No one ever had any fun while worrying about who's looking over their shoulders! Enjoying myself and having fun are the only technical indicators I need for success.

Dec 29, 2016

Comparisons between Norwegian countries and the United States cannot be made. Social programs similar to those put in place in small Norwegian countries will not be as effective in the United States due to the intense ethnic, cultural, and economic diversity between the different geographic regions of the United States. The people of New York have far different needs and issues than the people of Florida, Wisconsin, Wyoming, or California. Obamacare is a great example. Look at the huge differential in premiums across exchanges. Social programs cannot be run without wasted efficiency due to the huge bureaucracies needed to implement something on a nationwide scale.

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Dec 29, 2016

Other issues in many of the prior arguments are:

  1. Wage stagnation is not taken into account.

Wage growth has been much lower than it was in the 1960's, 1970's, and 1980's. Inflation has also been much lower in recent decades than historically. On an inflation adjusted basis, the average employee has nearly the same purchasing power as they did in 1979. For this reason, I am not surprised by the results stating that lower percentages of people are making less than their parents. Just because wages haven't been growing, doesn't mean the quality of living for the average American is declining.

  1. Economy has changed structurally

Everyone knows of the decline in the American manufacturing sector. In prior generations, people were able to graduate high school, get a job in a factory, and instantly be middle class. Obviously that rise to middle class has been delayed by the time required to attend college, get a job and gain experience. I agree that it is SIGNIFICANTLY harder for someone without a college degree to earn a upper middle class lifestyle, but this is attributed to a structural shift in our economy. More people need to pursue education than prior times.

  1. Opportunity exists in the American post-high school education system

The way the American education system is structured, nearly every child who receives a 3.0 GPA or above in high school is able to attend a public college regardless of background, economic status etc. For those of lower income backgrounds, the federal financial aid system makes college extremely affordable. All it takes in this country is an extremely accessible college degree to move from low income to middle class. I attended an urban public university, and witnessed the ghetto/rural to white collar middle class transition frequently.

Bottomline: America remains a great place to move from low-income to middle class, or middle class to upper middle class. Rising income inequality makes it MUCH more difficult to move from middle class to upper class than prior generations.

However, I believe the American dream is not the rags to riches story, but the ability for someone to come to our country with nothing, and be able to work hard to live a sustainable, happy life. By this definition, the American dream is live and well. Every time I talk to an immigrant of this country, I am amazed of the stories they tell and the opportunities this country has provided.

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Dec 29, 2016

Hard work is over-rated. Let's be honest. It's who you know and how well you can suck up to superiors.

Hard work matters but pure hard work does not do anything.

Sad fact of life.

I work in the oil and gas space. When oil and gas dropped guess who got the return offer for an internship at an O&G major?

The kid who was dating a manager's daughter.

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Dec 15, 2016
differentialequations12:

Hard work is over-rated. Let's be honest. It's who you know and how well you can suck up to superiors.

Hard work matters but pure hard work does not do anything.

Sad fact of life.

I work in the oil and gas space. When oil and gas dropped guess who got the return offer for an internship at an O&G major?

The kid who was dating a manager's daughter.

Absolutely right. I shutter at the thought of how many millions I've seen evaporate due to mismanagement due to cronyism/nepotism. It sickens me.

Dec 29, 2016
differentialequations12:

Hard work is over-rated. Let's be honest. It's who you know and how well you can suck up to superiors.

Hard work matters but pure hard work does not do anything.

Sad fact of life.

I work in the oil and gas space. When oil and gas dropped guess who got the return offer for an internship at an O&G major?

The kid who was dating a manager's daughter.

Sounds like he really nailed that internship, bro.

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Dec 27, 2016

Empirical evidence seems to go against the idea that opportunities are going to just disappear. Even if the dynamics begin to change where we no longer have the ability to make a million dollars by starting a small business, or something like that, people will still find something to look forward to in terms of self-actualization. Until we become a less people-driven civilization (such as living through virtual reality or a machine-oriented world) there will always be problems to solve, as well as activities we can do to find fulfillment.

Dec 15, 2016

"Success" has lots of different meanings for lots of different people, but if success is defined as becoming wealthy, I would agree that hard work is not the key to success. I think risk taking is the key to success. Extremely few people become truly liquid (independently wealthy) because they studied really hard, got great grades, and went to the best schools and graduate programs. To become liquid, most people need to take risks with their own human and/or financial capital. To @iBankedUp's point, I don't see opportunity going away for risk takers. I do see opportunity getting squeezed for those who want steady, middle-class work--globalism and technology are definitely threatening people's livelihood with technology being the real long-term threat.

Dec 16, 2016

.

Dec 27, 2016

I'm just some 22-year-old kid so maybe this doesn't mean much, but this is one of the most concise and insightful paragraphs I've read in a long while.

+1SB

"A modest man, with much to be modest about"

Dec 15, 2016

Hard work doesn't equal success? If you made over $100K last year you're already in the top 7% of the world's income. Sorry you didn't get a damn Ferrari and a jacuzzi.... Easily attainable if you worked hard, went to a good school, and did a real major..

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Dec 29, 2016

Nowadays it is smart work people are looking up to and it is ideal in this day and time.

Dec 29, 2016

It depends on geography, if you live in US and say that opportunity is not there, you are spoiled, but I would agree that for someone living in Somalia there is not that much opportunity no matter how many risks you take.

You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.

Dec 18, 2016

I think the point of the article is that it's less of a matter of scarcity of opportunity and more of the fact that a growing number of people are working harder yet their outcomes are fairing poorly and yet are being told that anybody who works hard can make it big.

I personally think that's there's still plenty of opportunity but for a shrinking group of people.

Dec 29, 2016

The definition of success is extremely narrow for many of the numbskulls on this forum.

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Dec 29, 2016

The harder you work, the luckier you get.

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Dec 29, 2016

I'm really diggin' the Human Centipede analogy.

Dec 29, 2016

Holler.

Dec 29, 2016

Holler(ish- some reservations on what you said, but for the most part agree)

Dec 29, 2016

HOLLA.

And +1 for the Smedley Butler reference.

http://en.wikipedia.org/wiki/Smedley_Butler

Dec 29, 2016

Yeah I agree but the question is not "what can I do about it?" the answer is "how can I profit from it?"

Dec 29, 2016

I agree with you, but I think shipping our labor is only part of the problem. The second part of the problem is our access to easy credit markets. Export heavy countries pegging their currency to the dollar, then using surplus cash to buy US government bonds pushing interest rates artificially low effectively sealed the deal.

We need our jobs back as well as a reality check.

Dec 29, 2016

I don't know if Iraq and Libya are good examples for breaking out of our economic/USD hegemony. . .

Dec 29, 2016

Holla

People like Coldplay and voted for the Nazis, you can't trust people Jeremy

Dec 29, 2016

Smart. I like this rant.

Dec 29, 2016

Increasingly, holla. The older I get the more depressing the world seems.

Making money is art and working is art and good business is the best art - Andy Warhol

Dec 29, 2016

Holl-ERR. But I gotta ad a dose of optimism to the story. First, we have to be objective and accept that every empire falls. Growth, however, is not always linear and not necessarily upward sloping. While we sit around and pout about our situation at home, things are far worse elsewhere. We still have the penultimate advantage of the Brain Drain supplying our work force with the globe's best and brightest. The huge advantage of having a non-nationality/race/culture based state is America's #1 weapon in the globalizing world.

We have to keep in mind that the structural shifts you mention have effects which will not be felt for quite some time and aren't really in the front of our brains right now. America has actually done a good job of beginning to address some of these issues, while other global powers are still in denial about them being in existence. Your point about our militaristic approach is true, but also shouldn't be overly dramatized. This is the business of empire and it has been carried out in such a fashion for thousands of years. The advantage America has over prior empires is that its geographic impenetrability leaves to only one option of failure... from within.
That doesn't mean it can't happen, it just means it wont happen as easily. Also, I think we often fail to realize that our military budget is in fact the driving force behind American scientific and technological advancements.

Yeah, I get it. Shit is bleak. It is bleak, however, more so due to our pampered lifestyles and over inflated expectations. America between 1945-2005 enjoyed a growth and prosperity not seen in centuries and perhaps a dominance not since since the Byzantines more than a millennium-and-a-half ago; it was due time for a correction. We are still in good shape comparatively. It is on us now. Do we want to get up and fight? Or do we want to sit and pout? Time will tell, but having seen quite a bit of how "the rest of the world" does business, I am not ready to write the U.S. off quite yet.

Either way, I'm for Kodos, as well. +1

Dec 29, 2016

Holla -- completely agree however as @barboon said the focus should be how as a country we can profit from this rather than moan and groan about, change is good and embracing it may bring more good in the LT. Lets face it emerging markets are the new frontier and they too will be major players on the world stage especially as they gobble up resources and dictate the flow of money.

Innovation has always kept us in front of peers, there's no reason we can't further subsidize innovation to promote growth and if that means closing tax loopholes and stop giving oil companies subsidies then so be it and as for Iraq and Libya, I don't think I can even count on 2 hands the amount of funds that have popped up in the last half decade concentrating on investments in these regions....fck it lets start making some shit and selling to them who gives a fck, their money is green too or in this case black and oily.

Dec 29, 2016

LOL, this is hardly the end of the American dream. Rather, America is hitting its post-WWII bottom.

We need to take control of our food exports and restrict shipments to the most mercantilist countries first- probably China, then Singapore, then Dubai, then maybe India and Japan. When the global famine hits, Americans need to eat first; after that, our fairest and friendliest trade partners.

Dec 29, 2016

I don't see the American dream ending any time soon. The US has had huge growth in the past century that was never before seen of in history. Did you really expect that to go on forever? The rest of the world was going to catch up at some point. I mean did you really expect people in china and india to sit around as dirty backbreaking farmers while they watched the western nations enjoy thousands of years of unrivaled growth?

Any ways its only a matter of time before people in these under developed countries discover what a union is and begin to implement them.

I agree though that we're slipping and if we don't dig in soon its going to be a long ride down. We still have time but its running out.

Dec 29, 2016

the only reason why the American dream existed in the first place is that (a) Americans embraced the free market and the competitive environment that fostered innovation that came with it and (b) the rest of the world, by and large was either too busy killing each other, embracing communism or invading France repeatedly in 1870, 1914 and 1939 (I won't name names). It is really easy to compete locally and export products that the rest of the world wants when you are one of the free countries without civil war/colonialism/communism/invading France. Since the 1970's the rest of the world has caught on and unfortunately that means convergence big time.

as the rest of the world's standard of living goes up, America's (and by extension much of western europe's) standard of living will come down. Fact of life. The only way to reverse this course is to go back to Mercantilism, which will end in full-scale war or embrace the free market again.

Dec 29, 2016

You make some good points, but our future isn't that bleak. Interestingly enough, America kicks ass in both the first development of human civilization (agriculture) and the latest (microprocessors and software development). Keep that in mind. Our army is well-fed, and it is well-equipped. Also keep in mind, we are still the #1 manufacturer in the world, a leader in creative class services (accounting, banking, design, legal services, art, music, etc). This is still the land of opportunity, and our people can still achieve incredible levels of success in their chosen field as long as they put in the work. This is the promise of the American Dream, and it still holds true today.

Perhaps, however, the American Dream as we know it, is over, and is instead being replaced by a Global Dream. In other words, the idea that any one can succeed in any chosen field, and do it from any location on earth. This isn't totally unrealistic: the internet is allowing us to collaborate and learn from each other, all over the globe, on an unprecedented scale.

We do have political problems in Washington. We do have problems with our financial system, our education and health systems, and with energy efficiency. Yet the promise of the American Dream remains, although now it might encompass all the people of earth.

Some might disagree, and think it is impossible for everyone on earth to share a similar standard of living. I refer you to this incredible article on The History of The Corporation. Section 3 is the section I am specifically referring to, which references a catch-up in standard of livings and peak attention. The entire article is worth reading at least three times.

http://www.ribbonfarm.com/2011/06/08/a-brief-histo...

Dec 29, 2016
LIBOR:

You make some good points, but our future isn't that bleak. Interestingly enough, America kicks ass in both the first development of human civilization (agriculture) and the latest (microprocessors and software development). Keep that in mind. Our army is well-fed, and it is well-equipped. Also keep in mind, we are still the #1 manufacturer in the world, a leader in creative class services (accounting, banking, design, legal services, art, music, etc). This is still the land of opportunity, and our people can still achieve incredible levels of success in their chosen field as long as they put in the work. This is the promise of the American Dream, and it still holds true today.

Perhaps, however, the American Dream as we know it, is over, and is instead being replaced by a Global Dream. In other words, the idea that any one can succeed in any chosen field, and do it from any location on earth. This isn't totally unrealistic: the internet is allowing us to collaborate and learn from each other, all over the globe, on an unprecedented scale.

We do have political problems in Washington. We do have problems with our financial system, our education and health systems, and with energy efficiency. Yet the promise of the American Dream remains, although now it might encompass all the people of earth.

Some might disagree, and think it is impossible for everyone on earth to share a similar standard of living. I refer you to this incredible article on The History of The Corporation. Section 3 is the section I am specifically referring to, which references a catch-up in standard of livings and peak attention. The entire article is worth reading at least three times.

http://www.ribbonfarm.com/2011/06/08/a-brief-histo...

Hahaha good luck coming up with the resources required for everyone on earth to live the American Dream

Dec 29, 2016

I think he was saying that it's possible to attain the dream, not that everyone will be able to

Dec 29, 2016

the resources may be available, it just depends on technological advancement and how efficiently we will be able to use them, but this is essentially impossible to predict.

Dec 29, 2016

the resources may be available, it just depends on technological advancement and how efficiently we will be able to use them, but this is essentially impossible to predict.

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