Reviving the American Dream
The Politics
The American Dream is on life support, but you wouldn’t know it from recent political news. Journalists and pundits have been talking about lipstick on pigs, Cindy McCain’s drug use, the bridge to nowhere. Why aren’t they discussing the real issues—like failing banks, falling wages, rising costs, and economic inequality? It’s time to demand a debate worthy of a great nation in trouble. That’s why the Institute for America’s Future is beginning a series of “op-ads” today that will highlight the real issues—and enlist others to challenge the media and the campaigns to answer fundamental questions about America’s future. To read the first of these op-ads, click here.
The Facts
Americans believe in the American Dream. They want to live in a society where hard-working Americans can earn a decent living, afford high-quality health care, access world-class education for their children, and retire with security. But the gauzy mist of the American Dream has been blown away by a harsh gust of reality. That’s why a June Rockefeller Foundation/Time Magazine poll found that half of Americans no longer think the American dream is within reach. [Rockefeller Foundation]
This economy isn’t working for most Americans—even when it is growing. From 2000 to 2007, the economy was growing, profits were up, productivity was up, but wages didn’t keep pace. For the first time ever, the typical household didn’t benefit from the “recovery.” [Economic Policy Institute]
Americans are draining their savings and facing mounting debt. Our nation’s personal savings rate is now at its lowest point since the Great Depression. [Bureau of Economic Analysis] The average debt for students graduating college now exceeds $19,000. [U.S. Department of Education] Last year, total household debt was at its highest level ever recorded. [Economic Policy Institute]
Income inequality in America has reached levels unseen since the “Gilded Age,” leaving the economy precariously off-balance. In 2007, chief executives of the 500 biggest companies in the United States made an average of $12.8 million apiece. That put their daily salary of $51,200 ahead of the typical workers’ annual salary, which was $42,650. [Forbes, Bureau of Labor Statistics] Taxes are unevenly applied as well. Because federal law favors income from capital gains, billionaire Warren Buffet pays taxes at a lower rate than his receptionist does. [Washington Post]
Corporations are unraveling the ties of America’s social contract. Since 2000, the number of workers who can depend on employer-sponsored health insurance has fallen by nearly 2 million. [U.S. Census Bureau] And while the number of workers covered by employer-provided pensions rose during the 1990s, it fell from 2000 to 2006, leaving fewer than half of all workers with pension coverage. [Economic Policy Institute]
The Argument
Despite their hard work, American families are facing more economic pressure than they were a generation ago. The free-market fundamentalism of the last thirty years has set the typical American family back financially. Two incomes are now needed to provide what one once did. People work longer hours. Under President Bush, these trends have worsened. The economy thrived, but people did not—debts climbed, poverty rose, and most went without health care. This cannot go on.
America needs an economy that works for working families. We need a fundamental change of direction. Instead of putting our faith in trickle-down schemes, we should be driving the economy from the bottom up. Instead of focusing on freeing up capital and showering bonuses on executives, we should be empowering workers.
Progressive Solutions
First, empower workers to organize. For the last seven years, profits rose but wages did not. This is a question of power. Unions remain the best way for workers to gain a fair share of the profits they generate, and to enforce agreements on hours, working conditions, and treatment. The Employee Free Choice Act gives workers the right to choose how to organize a union—either by getting a majority to sign membership cards or by holding an election. Passing it is imperative to building a strong American economy.
Second, forge a public social contract to replace the private one that corporations are shredding. Mandate that corporations take responsibility to provide basic health care, a public pension contribution, paid vacation and sick days, and a decent minimum wage that’s pegged to inflation. America should have—as other industrial countries do—basic legal minimums to prevent companies from driving down wages and working conditions.
Third, put the full force of the American government behind the goal of full employment. Over the last 30 years, market fundamentalists—deferring to the priorities of Wall Street’s investors—have made inflation the priority, not full employment. But historically, wages have risen across the board only when the economy has neared full employment, as in the last years of the Clinton administration. When jobs are plentiful, workers can negotiate a fair deal with employers.
