The American dream isn't dead, but it's got one foot in the grave, according to new research. The Washington Post reports that 92% of people born in 1940 earned more money at 30 years old than their parents did when they were the same age. Researchers say doing better than your parents is the American dream, economically speaking. But for people born in 1980, that percentage had dropped to 51%, according to the Wall Street Journal. That means barely half of today's 30-somethings are doing better than their parents. People born in the middle class and the Midwest have seen the steepest declines. The New York Times calls it some of the "most eye-opening economics work in recent years," as well as "deeply alarming."
A slowing economy alone doesn't explain the drop-off, and researchers place the blame largely at the feet of growing inequality. Over the past 30-some years, nearly 70% of income gains went to just the richest 10% of Americans. Researchers say that if inequality had stayed where it was in 1970, 80% of today's 30-year-olds would be out-earning their parents. "We need to have more equal growth if we want to revive the American dream," researcher Raj Chetty says. Without addressing inequality, researchers say the economy would need to grow 6% annually to reverse these trends. Donald Trump is promising to grow it by 3.8% per year, though experts say it's more likely to be closer to 2%.
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A slowing economy alone doesn't explain the drop-off, and researchers place the blame largely at the feet of growing inequality. Over the past 30-some years, nearly 70% of income gains went to just the richest 10% of Americans. Researchers say that if inequality had stayed where it was in 1970, 80% of today's 30-year-olds would be out-earning their parents. "We need to have more equal growth if we want to revive the American dream," researcher Raj Chetty says. Without addressing inequality, researchers say the economy would need to grow 6% annually to reverse these trends. Donald Trump is promising to grow it by 3.8% per year, though experts say it's more likely to be closer to 2%.
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