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Opinion: American Dream or Pipe Dream?

Photo of Gene Wunderlich

It was probably 2012 or so, and I was attending the National Association of Realtors mid-year legislative meetings in D.C.. In addition to the usual panoply of legislators, media talking heads, and pundits on the agenda, a session I always looked forward to was the update from our Chief Economist, Dr. Lawrence Yun. It was often held at 7:30 in the morning, sometimes after having arrived ourselves late the night before, but it was always worth getting up for. 

One of Dr. Yun’s presentation points that year charted dwindling optimism by parents. For the first time in our brief history as a nation, less than 60% of parents surveyed believed their children would have a better life than they had. Those parents had been raised with the expectation that their lives would be better, easier, and richer, than what their parents had experienced. While they felt that was true, their optimism was waning for their progeny. 

I’d wager many of us were raised with that same expectation, and we’ve passed that along to our kids. If they apply themselves assiduously to home and work, they would enjoy a better lifestyle than we have. That was the hope and has always been the promise – ‘The American Dream’.

So, what was this ‘American Dream’ that appeared be slipping through our fingers? If you’re a Realtor, the ‘American Dream’ is home ownership, and that’s not a bad place to start. Studies consistently point to home ownership as the fastest, most consistent, accumulator of wealth for the average family. Assuming you can buy low and sell high, and be prepared to hold through the occasional storm, that’s true. However, if you get that equation wrong, you probably doubt the efficacy of that statement. But neighborhoods of property owners are shown to have a positive impact on local education, crime, price appreciation, availability of resources and more. 

Stated more broadly, the ‘American Dream’ is, if you work hard you will get ahead regardless of your background.    

Thus it was with some trepidation that I read the Wall Street Journal article a week or so back, headlined “American Dream has turned elusive, voters say”. Despite some ups and downs, optimism has not recovered appreciably in the decade since Dr. Yun’s summary. After falling below 50% by 2016, that percentage has fallen to even further to 36% in the most recent voter survey. What’s even more concerning is that when WSJ did this same survey a year ago, 68% of voters responded positively to the question, ‘Are people who work hard likely to get ahead in this country?’. That’s fallen by nearly half in the past year alone for American voters across the political spectrum and age range. 

While that’s a grim statistic, 36% is nearly twice as optimistic as a recently conducted NBC poll which found that just 19% of parents felt confident that life for their children’s generation would be better off than their own. Given what’s going on around us right now, I’d say chances of that improving anytime soon are probably slim and none, and Slim just left the building.

So, where’s the disconnect between what the current administration touts as significant improvements to the economy and people’s perceptions of same? I think it comes down to the age-old question, ‘who you gonna believe, me or your lyin’ eyes’? Even given that unemployment has fallen back to pre-pandemic levels, folks are reluctant to credit this administration with ‘creating’ all those ‘new’ jobs rather than just allowing people to get back to work. In fact, drilling down further shows us that the labor participation rate of 62.7% is still below historic and pre-covid levels. Fewer people are participating in the workforce. Similarly, while the administration claims families have enjoyed record wage gains, the Bureau of Labor Statistics shows that those gains have been outstripped by price gains by some 3% between 2021 and today. 

How about inflation? After peaking at 9.1% in June 2022, it has indeed fallen to around 3.2%. While that’s still higher than the Fed’s target rate of 2%, it is a significant improvement. But how does that impact the price of goods and services? If it went up 9% last year and another 3% this year, it’s still going up and I’m still paying more than I was. A trip to the grocery store or a stop at the gas station gives the lie to the claim that prices are declining, or even moderating. 

Have you tried to buy a house lately? Between some of the highest interest rates in decades and continuing price (and rent) appreciation, good luck realizing that ‘American Dream’. I could go on.

Sadly, parents are not the only ones pessimistic about the ‘American Dream’. That expectation seems to be receding even more quickly for young adults, women and minorities. 46% of men but just 28% of women believe the idea of advancement for hard work holds true for them. 48% of voters over 65 believe it but only 28% of those under 50. The Vice President was absolutely correct, though perhaps not for the reasons she thought, when she stated, Too many Americans are living paycheck to paycheck because the cost of health care and housing are soaring… most Americans are a $400 unexpected expense away from bankruptcy.”  

As we are reminded, elections have consequences. The next few months are going to be a fast and bumpy ride to November 2024. If it’s true that BS emits climate destroying methane, the amount of effluvium generated by politicians of all brands over the next few months will accelerate climate change by decades. And you can put that in your pipe and smoke it. 

Happy New Year!

Written by Gene Wunderlich, Sr. Staff Writer

Prior to his retirement in 2021, Wunderlich served on a number of local non-profits and boards. He spent the past decade as a legislative advocate for the housing and real estate industries as well as a coalition of local Chambers of Commerce advocating on behalf of small and local businesses.

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