The American Dream Is On Life Support

Richard V. Reeves, former director of strategy to the United Kingdom’s Deputy Prime Minister, weighs in on social mobility


The United States is failing miserably to live up to its American egalitarian principles, its motto of equal opportunity for all, and its dream of equal upward mobility. Many Americans have not gotten the news or refuse to believe it.

That’s the stark message of Richard V. Reeves, slated to keynote the Greater Madison Chamber of Commerce Annual Dinner next week.

“The gap between the idea of upward mobility and the American Dream and the reality of it is quite wide in the United States,” says Reeves, the former director of strategy to the United Kingdom’s Deputy Prime Minister. “It’s wide because the sense of it is incredibly strong – I’ve gone as far to say that it’s central to the idea of America. The idea of self-made, bootstraps, etc. is in the DNA of America. So, there’s a high level of belief [of mobility] in America. In the reality, it is no better than other countries and in some ways worse.”

We can have a long argument about the gap between the rich and the poor in this country, Reeves says in an interview with Madison365, but we can all agree that we don’t want to live in a society in which where you’re born determines so strongly where you will end up.

The different mobility experience of African Americans is a big part of the reason, he adds, that America falls short of its ideal around equal opportunity and meritocracy.

“The chances of remaining trapped in intergenerational poverty are so much higher if you’re black than if you’re white that there is really very little prospect of moving toward the America that we think we live in – that ideal,” says Reeves. “Unless we tackle the experience of black American children and their different life chances. I’ll be honest with you: That’s a view of mine that has been strengthened by my time in the United States.”

Richard V. Reeves
Richard V. Reeves

Reeves is a senior fellow in Economic Studies at the Brookings Institution, co-director of the Center on Children and Families, and editor-in-chief of the Social Mobility Memos blog. You may have seen him recently on The Daily Show With Jon Stewart. Reeves will be in Madison on Sept. 30 to be the keynote speaker at the 63rd annual dinner of the Greater Madison Chamber of Commerce at the Monona Terrace Community and Convention Center.

People will most commonly tell Reeves, who has been named European Business Speaker of the Year, that it’s all about income. It’s about poverty. It’s not about race. If we solve income inequality and mobility and if we help the bottom 20 percent move up that will help all of the black kids.

“Thinking that way, in a sense, you don’t have to think about race as race. You can just think about low-income people and that will bring race along with it,” Reeves says. “I don’t think we can say that any more with a straight face. I really don’t. We see data point loaded upon data point showing that there is something quite very distinct about being black in America and, in particular, being black and poor in America that is different from being white and poor in America.”

Photographer Margaret Bourke-White's 'Bread Line during the Louisville flood, Kentucky 1937' source: Margaret Bourke-White/ Getty Images
Photographer Margaret Bourke-White’s ‘Bread Line during the Louisville flood, Kentucky 1937’
source: Margaret Bourke-White/ Getty Images

To be clear, it is not easy being poor in America whatever one’s race or ethnicity may be. But the economic challenges for black Americans are even steeper. Furthermore, statistics show that it’s not just the black people on the bottom who are significantly less likely to be upwardly mobile.

“African Americans are significantly more likely to be downwardly mobile from the middle. Even if you are black and your folks made it to the middle [class], you’re much more likely to fall back down the ladder yourself than if you are white,” Reeves says. “In both directions, there are huge race gaps … particularly for black Americans.

“The distinct experience of African Americans is an inescapable part of this problem,” adds Reeves, whose extensive research focuses on social mobility, inequality, and family change. “It’s a view that’s been strengthened in me almost every passing month that I’ve been looking at American data.”

Bootstrap it, youngster!
A big problem is recognizing the problem. Baby Boomers and older Americans, many who are making policy and are in control of many important resources in the United States, are still telling young people just to “Bootstrap it up!” Just like they did. This, despite the overwhelming evidence that today’s era is far different from the one they were born into of much more rapid mobility. Higher wages and benefits, low housing costs, low college costs, corporate pensions, low health care costs – literally dozens and dozens of conditions made it far easeir to get your bootstrap on.

“Also, you can always meet somebody who was born in a dirt shack and made it. But the anecdote is not always the same as the analysis,” Reeves says. “What big data suggests is that it just isn’t very high. If you’re born into the bottom 20 percent, you have a 40 percent chance of staying there. If you’re parents are poor, then you’re twice as likely to be poor as you should be in a society where birth was not destiny.”

Another problem in analyzing social mobility is that the people that talk and write about meritocracy want to justify their status. There’s a certain amount of innate comforting superiority that meritocracy brings.

“Almost everybody who talks about this and writes about this is somebody who’s successful — like a journalist interviewing a think-tanker, for example,” Reeves says. “It’s actually much more comforting for us to believe that our status is entirely earned and the result of an entirely meritocratic world. And the only reason we’re doing so well is because of our inner brilliance. It’s always more comforting for those who have made it to believe that they’ve made it only because of their individual talent and hard work. There’s no need to probe it further. In fact, it’s very uncomfortable to probe it further.”

So at what point in American history were we closest to living up to our egalitarian principles and the American Dream that we hold so dear?

“That’s a great question,” Reeves says. “It’s a tough question. You can look at the period at the end of the 19th century and the beginning of the 20th century where there was quite a bit of mobility. Decades after World War II, there was huge economic growth and people were getting better off than their parents were; even if there wasn’t much movement up and down the ladder … the whole ladder was being lifted up.”

However, Reeves says, in both of those cases you have to ask: But what about race?

“Most of the data I have been referring to was about white Americans. You can tell one story: When did white Americans get closer to this ideal? But it will never be the full answer because you need to talk about everybody else, in particular African Americans,” Reeves says. “Even when mobility was greater, it did not help the status of black Americans.

“Having said all this, it does look the rising tide in the post-war years did help black Americans and the gradual dismantling of legal racism meant that black Americans were better off in the ‘70s than they were in the ‘40s and ‘50s … but the gap didn’t really close much, if at all,” Reeves says. “In some ways it has become worse for black Americans – real income growth, child poverty rates, labor force participation rates, incarceration rates, arrest rates.”

Glory days
It’s hard to believe that it wasn’t that long ago when the American economy was booming. The economic expansion drove wages and employment up and income and wealth gaps narrowed. High taxes were levied on those with the biggest incomes and greatest wealth and Lyndon Johnson’s “Great Society” provided provisions, programs, and assistance to the poor.

“The United States grew by four percent a year between 1950 and 1973. It is really difficult if your economy is growing at four percent a year for people not to get better off over the course of a quarter century,” Reeves says. “Those were the golden years. And there are still a lot of memories about that period. It’s no coincidence that [Republican presidential candidate] Jeb Bush has set four percent GDP growth as his goal because he’s harking back to a day when the U.S. economy grew at four percent a year.

“But it isn’t going to grow at four percent a year. Nobody seriously thinks that we’re going to get back to that … conditions were exceptional. That was an exceptional period,” Reeves adds. “We’re into a much more difficult issue now that we’re not just going to automatically grow that much faster. So we must ask ourselves: What do we have to do for economic growth?

“The truth is that widening gaps in life chances tell me that the labor market is not working as effectively as it could and that there is a lot of power being left unused. We’re leaving a lot of talent on the floor. If we’re serious about doing better economically, we simply cannot afford to lose the talents and productivity of people just because they were born to the wrong parent of the wrong income or [are] the wrong color.”

One thing that Reeves will stress when he comes to Madison to deliver his keynote address is the economic case for mobility. “It becomes even more important when economic growth – and therefore rising standards of living – is not being delivered automatically that the outcomes are found to be fair,” he says.

If we’re all doing well, we’re not really too concerned with our neighbor’s success. But when that’s not the case, there will be trouble. “If everybody on the highway is going 60 miles an hour and somebody overtakes you, it’s no big deal,” Reeves says. “But if you are in gridlocked traffic, you really hate it if somebody cuts you off and gets ahead of you.”

Upward mobility in Madison

It’s a data point in itself that the Greater Madison Chamber of Commerce would choose to use their annual dinner to highlight this issue and shows that they are forward thinking. “I think it’s an economic imperative and an economic responsibility that we address this issue,” Reeves says. “The truth is that widening gaps in life chances tell me that the labor market is not working as effectively as it could and that there is a lot of power being left unused. We’re leaving a lot of talent on the floor.

“If we’re serious about doing better economically, we simply cannot afford to lose the talents and productivity of people just because they were born to the wrong parent of the wrong income or [are] the wrong color,” he adds.

Of course, there is always a social justice case for equity. But if compassion doesn’t sway you, economics should. “Just bringing up the educational performance of our poorest kids to something closer to the average would have a very significant economic benefit,” Reeves says. “If you want to foster a growing economy and you want a better business environment than it is an economic imperative.”

Madison — an economically diverse and politically progressive city going through demographic changes – is an interesting place to be thinking about and discussing the problems of upward mobility.

“Madison very clearly has a series of challenges of which I am understanding but it also has some opportunities unlike some other medium-sized cities,” Reeves says. “Madison is not in a stagnant place. They do well educationally. There is potential to move the needle on mobility. Looking around the data with Madison, it’s a city with problems but also potential. It’s a good place to start thinking about doing something around this issue.

“Economic growth alone and public services alone are not enough to create the kind of equality of opportunity that America and Madison thinks of itself as having,” he says. “The truth is that equal opportunity is always a work in progress. There’s never a point where you can sit and say, ‘Well, I think we’re OK!’

“Madison is not Baltimore,” he continues. “But the idea that Madison is immune to the problems of inequality and racial inequities is naïve. It’s naïve to claim that nothing can be done, but it’s equally naïve to claim that there is nothing to do.”

Action on this important topic, Reeve says, must start soon. “There are very clear warning signs. There’s no room for complacency here,” Reeves says. “A slight nudge now and a little bit of a steer/course correction, particularly by the business community, can prevent the problems that you see elsewhere from becoming more entrenched. Madison has the time and the potential to do better. The question is: Do they have the will?”

Richard V. Reeves will be the keynote speaker at the 63rd annual dinner of the Greater Madison Chamber of Commerce at the Monona Terrace Community and Convention Center Sept. 30. For more information, click here.