The American Dream in the 21st Century:

Why Wealth Inequality is Slowly Killing our

Dream.
Moises D. Casilla
Salt Lake Community College

(SLCC, 2016)

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The American dream, the ideal that every US citizen should have an equal opportunity to
achieve success and prosperity. The average American citizen faces the reality of having less opportunities in contrast to previous years as the wealth gap between the rich and poor increases, a
trend we have seen rise since the late 70s. As author Andrew Walters explains in his overview of
the wealth gap essay, the wealth gap started to rise in the late 70s and early 80s where the top
1% held 33.8% of Americas wealth and more recently that gap has increased to 37.1% by
mid-2009 (Walters, 2016).
This disparity of wealth has been gaining national and international attention since 2011,
more recently seen in the presidential election process of 2016. Bernie Sanders addressed the issue saying that taxes should be raised on the rich, arguing that the current top marginal tax percent rate in the U.S is 39.6%, a figure that back in the 50s during the Eisenhower administration
was as high as 91% (As cited by Covert, 2016). As explained by Edward McClelland, journalist
and author of several books, in the 60s and early 70s America was going through a period of
time known as the golden age of middle class employment and the economy expanded rapidly,
creating a healthy middle-class (McClelland, 549-560, 2014). Adolescents that graduated high
school were able to obtain decent jobs allowing them to flourish economically.
McClelland and others, including myself, make the argument that the American dream
should represent the possibility of owning your own house and supporting a family, without having to struggle financially or take on huge debt. Recently, Erin El Issa conducted a survey for
NerdWallet where he concluded that the average American household carries $15,762 in credit
card debt and $130,922 in total debt (El Issa, 2015). Numbers that sadly are not strange to most
of us, many young individuals have to take on debt to be able to afford school and get an education. Many of my friends and family members owe over $30,000 in students loans and unfortu-

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nately they are not exceptions, 7 in 10 students that graduated public schools and non profit colleges in 2014 had student loan debt with an average of $28,950 per borrower (The Institute for
College Access & Success, 2014).
Despite the debt and increasing inequality, Authors like Tim Roemer feel that the American
dream is still alive. Roemer, a democrat from Indiana that served as the ambassador of india
from 2009 to 2011, bases his argument in the idea that America is a meritocracy and through
your own merit you can achieve success, if you work hard, you will be rewarded (Roemer,
618-622, 2014). Those rewarded are the ones that stimulate the economy, according to some
authors including Edward Conard, a former partner at Bain Capital and scholar. In Conards
book Unintended Consequences: Why Everything You've Been Told About the Economy Is Wrong, he argues that the success of America's wealthy individuals stimulates economic growth and, in turn,
increases the living standard for both rich and poor (Conard, 2013).
Individuals like Conard and Roemer are not necessarily wrong about the economy being
stimulated by successful wealthy individuals, however, they just seem to be overlooking the levels
of inequality we experience in this country. I am not stating we should be equal, extremes are not
healthy on either side of the spectrum. Bill Gates for example, the wealthiest man in the planet
with a net worth of $77.9billion USD as of 2016 (Forbes Magazine, 2016), argues that extreme
inequality is dangerous, the wealthy get extremely powerful and democracies get tilted towards
the interest of the very wealthy, he stated in an interview with BBC, that everyone needs to pay
their fair share of taxes because the U.S has a huge budget deficit and the rich paying more is just
justice (Gates, 2015).
Like Gates and Sanders, there are many individuals proposing solutions to try to reduce
inequality, but it is not easy, the complexity of the issue makes it hard to propose one single solu-

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tion. Stephanie Owen and Isabel Sawhill, both writers for the Brookings institution, argue that
higher education could help give individuals better opportunities in life. Education is a problem
itself because it seems like every young adult is going into debt to obtain a major, but it could also
be the solution. Owen and Sawhill argue, as this graph shows below, that a college graduate is
more likely to be employed and earn a higher salary than someone with only a high school
diploma.

Source: Owen and Sawhill, 208-225, 2014

Owen and Sawhill concluded that on average the return in higher education is highly positive. The education of an individual benefits everyone, from having prepared workers to fill the

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demand in jobs to other benefits such as, having better opportunities to succeed in life and a high
return in your investment. Despite this, it is important to take into account that the field that an
individual chooses to go into has a major impact in the economic return the individual receives.
An individual that graduates with an arts degree earns about $6,000 more than the expected
earning of a high school graduate, in comparison to $35,000 dollars more from a graduate with a
mechanical engineer degree (Owen and Sawhill, 208-225, 2014) .
Your major dictates the probability of economic success you will have, but also the institutions you attend and your family status. Education seems to be able to give you a higher chance
of earning a decent salary but that doesnt necessarily mean a more equal opportunity of success.
The problem of economic inequality is that it causes social inequality which in turn causes an
unequal educational system. In a research performed in the Western State of Nevada by Deborah A Verstengen, she ties the issue of inequality in the educational system to our financing system. On her analysis for Education Policy Analysis Archives, she explains that in areas where
there is more money per capita, the opportunity and quality of education is much higher than in
less fortunate areas (Verstengen, 2015). Another study by the National Center for Education Statistics sorted eight graders in 1988 by apparent academic talent, as measured by a mathematics
test, and socioeconomic status of their parents, measured by income, occupations and education.
The results showed that unsurprisingly getting a high score on a test and having high status parents increased a students chance of finishing college (As cited by Krugman, 561-580, 2014). Family status actually mattered more, students who score in the bottom but came from family from a
higher status were more likely to finish college than those students who got a high score but families didn't have a high socioeconomic status.
The majority of the children of our country do not have the same opportunity as children
of wealthy individuals. In the documentaries The One Percent (Johnson, 2006) and Born Rich
(Witterborn, 2003), Jamie Johnson the grandson of billionaire magnate Robert Wood Johnson I,
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explains to us how he inherited more money than one could even imagine just for being born
into the right family. His family meets year after year with economic and financial advisors whos
job is to keep the wealth in the family for generation after generation.
Jamie Johnson is not the only one commenting on the life of the wealthy. Robert Frank,
writer of the Wall Street Journal, who was assigned to cover the lives of wealthy individuals in his
book Richistan, describes (As cited by Krugman, 561-680, 2014),

todays rich had formed their own virtual country they had built a self-contained world
unto themselves, complete with their own health care system (concierge doctors), travel
network (Net Jets, Destination Clubs), separate economy The rich weren't just getting
richer; they were becoming financial foreigners, creating their own country within a country, their own society within a society, and their economy within an economy.

What was more shocking about these documentaries and book is that the wealthy kids of
our country only socialize with wealthy kids from other families, they go to the same schools and
have the same social circles. Amassing wealth and passing it on generation from generation is a
practice often seen in aristocracies and monarchies and America will slowly become one if we
don't put a stop to this practice.
Milton Friedman argues that passing your wealth onto your kids is one of the many incentives to become wealthy in the first place (Friedman, 1973), however, this tradition defies the principle idea of Peter Singers essay Famine, Affluence and Morality, which is often use as an example of Western ethical thinking. He proposes the idea that through ones wealth, one could end
the suffering and starvation of millions of people. Singer argues that a wealthy individual is

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morally obligated to donate money and resources to humanitarian causes (Singer, 229-243,
1972).
Some of the wealthiest individuals in the world have actually done a lot of humanitarian
work and donated money several times for philanthropic causes. Warren Buffett along with his
friend and colleague Gates, are some of the billionaires that have pledge to give away over half
of their wealth during their lifetime. Together they founded an organization, called the giving
pledge foundation (Gates and Buffett, 2010). It was created to inspire wealthy people around the
world to give the majority of their net worth to philanthropic causes.
Billionaires are actually not the only ones aware of the increasing inequality, in her 2013
book, sociologist Leslie McCall performed a series or surveys to try to methodically figure out
what was Americas average citizens thinking of economic inequality. In these surveys she found
that, Americans are aware that inequality has grown, Americans do not like economic inequality,
Americans seem to think inequality is undercutting the opportunities to move up in the economic
ladder, a growing percentage of Americans want something done about inequality, Americans
have not endorsed the idea of government redistributing income, and last, what Americans want
the government to do is to increase opportunity (McCall, 2013).
The survey above suggests that what seems to be affecting the average citizens of our country is the lack of opportunity, and it is important to know the differences between income inequality and wealth inequality to understand this. Income refers to the amount of money made
in a period of time, while wealth refers to the value of the capital and assets you possess. Income
is something you have earned during your lifetime and often through hard work, however, wealth
is just passed from generation to generation and wealthy individuals just tend to get richer and
richer, unless there is a war or tax regulation. In this chart below we can appreciate what the

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wealth gap looks like as of 2015, comparing Forbes 400 wealthiest individuals in America to the
average and poor citizens of our country.

Source: Combined Net Worth, Forbes 400, 1982-2015

In 33 years the wealthy individuals of America went from $2 billion to $76 billion, a shocking $74 billion increase, while the entry and average citizens are still below $10 billion since then.
This is comparing 400 individuals to the rest of the population, which is now close to
323,995,528 million people as of 2016 (United States Census Bureau, 2016). It seems reasonable
that the hopes of moving up the economic ladder are slowly dying and the fear of not having a
leveled playing field with opportunity for all is increasingly rising.
Whether Raising the tax on the rich, having a better educational system or donating money
for humanitarian causes is the answer, the reality is that extreme wealth inequality is slowly killing

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our American dream. It doesn't matter if you see it as being the next entrepreneur or simply as
being able to make a decent living, the rising inequality and wealth gap of our nation reduces the
opportunities available out there for our children and the future of this nation. As Americans we
must stand up for our rights and beliefs to make sure America is a land of equal opportunity and
not the land of just a few.

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References
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Wrong.
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Cover, B. (2015). Bernie Sanders Would Tax The Income Of The Wealthiest Americans At 90
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El Issa, E. (2015). 2015 AMERICAN HOUSEHOLD CREDIT CARD DEBT STUDY. Nerdwallet.
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Krugman, P. (2014). Confronting Inequality. Gerald Graff, Cathy Birkenstein, Russel Durst. They say
I say with readings 3rd edition (561-580). New York: Norton.

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Verstegen, D. A. (2015). On Doing an Analysis of Equity and Closing the Opportunity Gap. Education Policy Analysis Archives, 23(41),
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