Skepticism about achieving the American dream follows a bleak outlook for the economy and the future of the United States
Given the rising costs and unaffordability of the real estate market, Americans are increasingly pessimistic about achieving the “American Dream,” leading more and more of them to redefine their goal in hopes of achieving it.
Americans have been plagued by inflation and fears of a recession over the past two years – despite a strong job market and slowing price increases – leading many to take a pessimistic view of the economy’s prospects and its future.
A recent New York Times/Sienna College poll of voters highlighted the contrast between the economy’s measurable success — from higher wages to low unemployment to job satisfaction — and people’s moods.
Eighty percent said the economy was mediocre or poor, and only two percent said it was excellent. The majority of all population groups had a negative view of the economy.
Many Americans’ negative attitudes toward their personal finances also impact their confidence in achieving the “American Dream” and what it means to achieve it.
A MassMutual survey released last week found that more and more U.S. households believe the American dream is out of reach or disappearing. Over 40% of people said it was disappearing, a 9% increase from 2018 and similar to 2013, when the economy was still recovering from the financial crisis.
“With many people struggling to find a balance between their daily spending and their short- and long-term financial goals, it is no wonder that many question whether achieving the American Dream, however they define it, is possible ,” said Amanda Wallace, head of insurance at MassMutual. “Today, the need for financial security is great and many families face real challenges, such as high student loan debt, lack of an emergency fund and difficulty meeting everyday expenses.”
What it means to achieve the American dream has also changed over the years. 69 percent of respondents said a family’s financial security was the deciding factor, a change from a decade ago when owning a home and not being able to live paycheck to paycheck were at the top of the list list were.
The price of owning a home has also skyrocketed in the past two years, as a hot post-pandemic real estate market led to massive price increases in several parts of the country. The rate of price appreciation has slowed this year, but that has brought little relief to buyers as high interest rates drive up the cost of a monthly mortgage payment.
Other types of debt have also piled up since the pandemic as credit card balances grew during times of high interest rates. Student loans continue to weigh on households as, for the first time in more than three years, the average graduate has tens of thousands in debt that just came due, putting further strain on wallets.
Other research on the American Dream has found changes over the years. An annual report from the Archbridge Institute also found a change in priorities in defining the American dream. The two most popular answers were “freedom to choose life” and “a good family life”.
The Archbridge Institute survey also saw an increase in the number of people saying it was unattainable for the first time since its launch in 2020. Almost a quarter of respondents said it was unattainable, but the majority of people said they had already achieved it or were on the way.
But the rising pessimism fits with a larger trend of economic fears Americans are harboring. There are numerous factors behind the pessimism: higher prices, fears of recession, higher crime rates and much more.
“Living paycheck to paycheck and the amount of student and credit card debt many carry today could change the definition of the American dream for many people,” Wallace said. “This comes at a time when inflation remains people’s biggest concern, alongside growing concerns about impending changes in the financial and political landscape and how these changes may affect day-to-day finances. “