By Julie Lays
The American Dream—the opportunity for anyone to succeed financially and move higher up the economic ladder from where they started—hasn’t quite become a nightmare, but it’s no longer the wonderful, universal experience it once was.
That’s what two academics told a full room of participants at this session on the last day of NCSL’s Legislative Summit in Boston.
The researchers let their findings drive their message. The percentage of 30-year-old Americans today who make more money than their parents is down from 90 percent in the 1940s to less than half today. Economic stagnation has stunted the incomes of most Americans, except those of the very richest. Why? The presenters gave several factors, and some in the audience offered others.
One problem is a lack of business competition caused in part by fewer start-up businesses and business consolidations. There are half the percentage of start-ups today than there were in the 1970s. About 60 percent of U.S. cities have more companies close than new ones start up every year. According to the panelists, start-ups are really what drive economic growth and should be encouraged and supported. They are more likely to experiment with new business models and give entrenched businesses more competition.
Another factor the researchers discussed was that economic mobility is affected by location. Several diverse factors play a role, such as the number of colleges nearby, percent of single mothers, degree of racial segregation, length of commutes.
Were any easy-to-adopt solutions offered in this 90-minute session? No. But I’m not sure anyone there expected reclaiming the American dream would be that easy.
Julie Lays is the editor of State Legislatures magazine.