Is the American Dream Fading? Yes. Come to Michigan and see.

In the article by David R Francis I especially agree with the following quotes:

"There are lots of people who have found it difficult to meet their basic needs," says Lillian Woo, an economist in Durham, N.C., with CFED, a national nonprofit research group that conducted the study. "The ratio of indebtedness seems to be growing."

That's not because these Americans have engaged in shopping sprees, though that sometimes happens. It is often because of medical bills or high housing costs. Many households are "hovering on the brink of financial disaster," Ms. Woo maintains. "The cushion is very thin."

I would add that in addition to soaring costs for gas and food, even things such as unexpected auto repairs, and minor unexpected repairs in and around the house can cause financial trouble. In my case there are no shopping sprees, it's just try to get by.

Glad to see this subject discussed, but to me it's a mystery that more folks are not aware of the problem, I mean take a look at the average household income, and compare it to today's prices, I mean where is the mystery in all of this?
Mongo | 05.26.05 - 9:32 am | #

If California had not had $100 per semester tuition at CSU schools when I was an undergraduate, I would not be here and would not have gone to college.
Mark Thoma | Homepage | 05.26.05 - 10:55 am | #

The disconnect between measured mobility and perceptions of mobility is hardly a surprise. Becker should know better, but he is just lately coming around to the notion that he may have to believe his lying eyes, rather than his prejudices. Mobility doesn't change overnight (it took 12 years of Reagan/Bush, a mixed showing from Clinton and now 4+ years of more Bush to do the job), and measuring the change takes even longer. Certainly, folks who have been immobilized will eventually catch on, but they won't get much help from the press because of the lag in getting the data to speak.

That doesn't mean we should put up with partisan efforts to claim mobility in the US is high (has to be - this is an "opportunity society") or that mobility is a sideshow, that growth is what matters.
k harris | 05.26.05 - 1:19 pm | #

Fine post and comments, and reason for much concern.
anne | 05.27.05 - 12:54 am | #

The New York Times articles on class in America are most helpful:

http://www.nytimes.com/2005/05/2...? pagewanted=all

15 Years on the Bottom Rung
By ANTHONY DePALMA

In the dark before dawn, when Madison Avenue was all but deserted and its pricey boutiques were still locked up tight, several Mexicans slipped quietly into 3 Guys, a restaurant that the Zagat guide once called "the most expensive coffee shop in New York." ...
anne | 05.27.05 - 12:56 am | #

http://www.nytimes.com/2005/05/1...& pagewanted=all

When Richer Weds Poorer, Money Isn't the Only Difference
By TAMAR LEWIN

NORTHFIELD, Mass. - When Dan Croteau met Cate Woolner six years ago, he was selling cars at the Keene, N.H., Mitsubishi lot and she was pretending to be a customer, test driving a black Montero while she and her 11-year-old son, Jonah, waited for their car to be serviced....
anne | 05.27.05 - 12:59 am | #

http://www.nytimes.com/2005/05/1...& pagewanted=all

Up From the Holler: Living in Two Worlds, at Home in Neither
By TAMAR LEWIN

PIKEVILLE, Ky. - Della Mae Justice stands before the jury in the Pike County Courthouse, arguing that her client's land in Greasy Creek Hollow was illegally grabbed when the neighbors expanded their cemetery behind her home....
anne | 05.27.05 - 1:00 am | #

It's an important issue Mark, and thanks for the post. I've always been a bit surprised by the seeming dispartity between popular perception (the land of opportunity) and the lack of strong support for high levels of mobility (relative to other capitalist democracies) that are reported in the (relatively few) studies that I have seen reported. A major problem here is the nature of the data required, I guess, and disentangling the effects. But it seems to me that in a world of massive and rising income and wealth spreads, we should be very concerned about possible mobility and barriers to mobility between income groups, and it deserves more attention.
rjw | 05.27.05 - 5:08 am | #