Fear of losing the American Dream

March 27, 2011 at 12:00a.m.

McClatchy Newspapers

WASHINGTON

The bitter fight over union pay and benefits in states such as Ohio and Wisconsin is more than a clash over an annual budget.

It’s a sign of a country wrestling with fundamental change as it leaves the familiar moorings of the 20th century and struggles to forge a new economic and political order.

Working people have been watching their paychecks stagnate or shrink since the 1980s. Health- care costs have been rising steadily. Jobs have been migrating overseas. The dream of upward mobility has slipped from many people’s grasp. The rules seem to be changing.

Politicians from both major parties have responded with partisan solutions on party-line votes, unwilling or unable to forge consensus, leaving anxiety and bitterness in their wake. They’ve borrowed trillions to pay for wars and health-care benefits, bailed out Wall Street and auto companies, even as they cut taxes. Debt has skyrocketed.

Amid that shifting landscape, Americans have reacted at times with rage — in town-hall meetings in 2009, outside the U.S. Capitol as Congress passed a health-care law in 2010, and in state capitols this year, as governors and legislators push cuts in pay and benefits for teachers and other public workers.

But there’s more to the angst than the day’s headlines.

“What’s going on is something deeper within the electorate itself,” said John Kenneth White, a professor of politics at Catholic University in Washington. “People feel their rights are being taken away. People feel they’re losing the American Dream.”

For decades after World War II, middle-class incomes rose rapidly, and the gap between rich and poor narrowed.

“The United States witnessed a period of strong and sustained economic growth, creating a rising tide that lifted all boats and ushering in an era of unprecedented prosperity,” said a report from the Economic Mobility Project at the Pew Charitable Trust.

“In the last generation, however, an increasingly competitive global economy has caused the growth of median family income to slow notably.”

By one measure, working Americans continue to do better. Eight out of 10 Americans make more in inflation-adjusted dollars than their parents did, Pew found.

But they’re not upwardly mobile like their parents were in the 1950s and 1960s. Pew found that 42 percent of people in the bottom fifth of income will stay in the bottom fifth, unable to move up the ladder even from one generation to the next.

“If America really is a country where people have equality of opportunity, not outcome, we would expect to see more movement,” said Erin Currier, project manager at the Economic Mobility Project. “We would expect that people would not look so predictably like their parents.”

At the same time, some are slipping downward, particularly minorities. Pew found that 16 percent of children in middle- income families will fall all the way to the bottom. Among African- Americans, 45 percent will fall to the bottom.

“There is not equality of opportunity in the way we as a nation imagine there is,” Currier said. “The American dream is struggling.”

It has been since the mid-to-late 1970s. One key may have been the decline of unions in the private sector, which previously had helped increase wages not only for members, but also for workers in some nonunion businesses, by setting a benchmark.

Bruce Western, a sociology professor at Harvard University, said that middle-class incomes started to stagnate around the time that private-sector union membership started to decline. From 1974 to 2007, private-sector union membership dropped from 34 percent to 8 percent for men, and from 16 percent to 6 percent for women, according to Western.

At the same time, income at the bottom and middle of the scale started to stagnate, and the gap between rich and poor grew by 40 percent, he said.

Today, fewer than 7 of 100 jobs in the private sector are unionized. About 36 of every 100 government jobs are unionized, but workers there are under heavy pressure to take pay cuts and pay more for benefits, as their neighbors in the private sector have done.