Monday, July 7, 2014

The cost of the American Dream?

I'm a little nonplussed by an article in USA Today titled 'Price tag for the American dream: $130K a year'.  It opens with a graphic showing a breakdown of that figure, and goes on:

An analysis by USA TODAY shows that living the American dream would cost the average family of four about $130,000 a year. Only 16 million U.S. households — around 1 in 8 — earned that much in 2013, according to the U.S. Census Bureau.

In an interview, co-author Thomas Hirschl, a professor at Cornell University, stressed that for the dozens of people they surveyed and interviewed, the American dream was not about becoming one of the 1%.

"It's not about getting rich and making a lot of money. It's about security," he said. It's also as much about hope for the next generation as it is about the success of this one. "They want to feel that their children are going to have a better life than they do," said Hirschl.

In their book, the authors write that besides economic security, the American dream includes "finding and pursuing a rewarding career, leading a healthy and personally fulfilling life, and being able to retire in comfort."

. . .

There are big regional variations, too. It costs a lot less to live the American dream in, say, Indianapolis or Tulsa than it does in metro areas like New York and San Francisco, where housing prices and taxes are sky high.

And many people achieve the dream on much less. Some immigrants, for example, have extended families and other support systems to help bear the burden.

Nonetheless, it's clear that though the American dream is still alive, fewer and fewer of us can afford to live it.

There's more at the link.

I think the basic problem with this scenario is that it assumes the American Dream can be bought.  I don't think many of our ancestors saw it that way.  They saw their version of the American Dream - which assuredly did not include 4x4 SUV's, IRA's and 401(K)'s, or such exorbitant costs for education and health care - as something that had to be built by the sweat of their brows and the labor of their hands.  Many of the things we buy on credit today, they either made themselves or did without.  They built their American Dream, rather than bought it.  Frankly, I think that was a very much healthier way to do it.

I look at my parents as an example - although they didn't live in America, they still had their dream, one that I think will resonate with my American readers.  They came out of World War II without even a high school graduation certificate between them.  In fifteen years of hard part-time study, they each completed their high school equivalency certificate and three degrees apiece, winding up with Doctorates in their respective fields.  All their studies were conducted part-time while Dad earned a living for the family, Mom brought children into the world and raised them, and they provided a home for one set of my grandparents who came out to live with them.

Dad bought a two-story house in 1963, rather run-down and dilapidated, for the equivalent of about $12,000.  Over the next decade he spent as much again repairing and renovating it.  It became a comfortable, spacious family home for us - but he and Mom could never have afforded to buy it in the condition to which he restored it.  It was 'sweat equity' all the way.  Many of their friends did the same.  Money was hard to come by, but hard work was always there as an option, and their friends would chip in with time and labor when asked to help - just as my folks would help their friends in their turn.  The money they made from that house when they sold it helped buy their retirement home, and they were able to live on Dad's pension from his oil company job - simply, but adequately.

As for post-school studies for their children, they helped all of us as and when they were able to, but basically they raised us to stand on our own two feet and earn our own way in life.  They certainly couldn't afford to send us all to university full-time.  I enlisted in military service six days after my final school examination, and started basic training almost immediately.  In my four years of full-time service I began studying part-time for my first degree, and continued after returning to civilian life while working in the computer industry and becoming active in humanitarian work.  I can't say I'm any the worse for not having my degrees handed to me on a parentally-paid platter;  in fact, if I ever have kids of my own, I'll probably follow the same course with them.  It helps one mature that much faster to have to earn one's way, rather than have someone else pay for it.

I think that was the essence of the American Dream in its origins;  working hard to build it for oneself, with the help of family, friends and the extended community.  One can still attain that dream today.  To rely on buying it, with little or no personal hands-on involvement, seems almost the opposite of what I was taught a dream should be.  What say you, readers?  Am I just hopelessly old-fashioned?  Or is there something to the old ways after all?



Eccentric Cowboy said...

I believe there is still a lot of merit in the concept of working for your living in the manner you described, but I also think that some things in today's world make that much harder aside from the Feds breathing down everyone's necks and outlawing everything in sight.

Now, I'm a pretty young gent so it's not as if I have a huge frame of reference, but I get the impression that there is a lot less time these days than in the past. Appointments day and night with all sorts of different factions really takes a toll on a person's ability to work on other projects.

Heck, I only work part time right now and it's still darned hard for me to line up my schedule with anyone else for social activities. I can only imagine what it's like for people working five to six days a week for eight hours a day! Please correct me if I'm wrong however.

I also think it depends heavily on what a person's dream actually is. For those who don't place much value on fancy cars or shiny things the annual budget might very well be far lower than others.

As it is, I'm darned good at managing my time and resources, and sometimes I just have to bite the bullet and spend a few extra dollars if I want to get something done. Then again, my own demands are a bit off of the wall, so it probably isn't best for me to use myself as a case example.

Even so, I do believe there is still a great deal to be said for working towards your dream.

Rolf said...

Bingo. Stuff vs a chance and the rule of law giving everyone a chance and a fair shake. The latter is cheap. It's the stupid striving for "stuff", while stamping out the later, that makes achieving the dream tough. I think that's a big difference between folks, people seeing the destination (stuff) as they goal, not the journey (the trip that make the stuff worth something).

Anonymous said...

I'm listening to F.A. Hayek's The Road to Serfdom right now, he points out that one of the major signposts on the path from freedom to totalitarianism is the shift in emphasis from a demand for opportunity to a demand for security. If the government is being called on to safeguard a particular living standard it will eventually drive state control of all aspects of life.

Anonymous said...

I've always been proud that I got my degree on the G.I. Bill (in 1990, this isn't just-after-WWII). My parents later informed me (when I was 35 or so) that they'd had the money to send me to one (1) year of college after high school, & I could've got scholarships, grants, etc., to cover the rest. I believe it was entirely possible. They decided not to because I was too immature. At 35, I had to agree they'd have been stupid to do so.
--Tennessee Budd