Poverty and the American Dream

Inequality has noticeably increased in the United States throughout recent decades in regards to not only income but also poverty. The time period between the end of World War II and the 1970s Recession was a time of strong economic growth. The growth in family income was approximately the same according to the Gini coefficient. It was found that income inequality was relatively low from 1947 to the early 1970s, the Gini coefficient was flat or declining A Gini coefficient of 0 means that incomes are equal, and a 1 means that incomes are unequal (Federal Reserve Bank of St. Louis, 2016). During this period the bottom 20 percent of families saw their income rise by 90 percent, compared to 86 percent for those families in the top 20 percent (Kearney, 2014). Even though income inequality continued to rise, the recessions of the 1970s, 2001, and 2007-09, incomes fell significantly. According to an article by Melissa Kearney income gains between 1975 and 2010 we much different for each fifth when studying income distribution. Families in the bottom fifth saw an income increase of a meager 3.7 percent while those in the top fifth saw an average income increase of 57 percent (Kearney, 2014). The trends in inequality we have seen can be attributed to changes in the labor market, educational opportunities and achievements, and the continued intergenerational spread of poverty. It is up to use as a country to make the necessary changes so all Americans have an opportunity to live the American Dream.

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First the developments of inequality that we have seen in the United States in recent decades are due in large part to changes in the labor market that are partial to highly skilled workers. These changes can also be associated to the long-term effects of the Great Recession, which caused many jobs to be replaced by technology or the work to be outsourced to another country. An article published by USA Today in 2017 states that on average college graduates earned 50 percent more than high school graduates in 2015 according to data from the Economic Policy Institute. Since the last Great Recession ended in 2009, college-educated workers have occupied many of the new jobs and even seen pay gains. While non-college graduates face decreasing job opportunities and an overall three percent decline in income (Rugaber, 2017). When I graduated from high school in May of 2009, the country was at the end of the 2007-09 recession. Inflation could be seen all around, while the number of job opportunities for a high school graduate we hard to find. In 2008 I held a summer job at a local collegiate summer baseball league field, the La Crosse Loggers. I worked with several friends and we were able to carpool to and from work. I remember the price of gas being astronomically high at $4.11 per gallon. Making minimum wage, working part-time, and having to fill up was next to impossible. I couldn’t imagine living on my own with everyday living expenses and only making minimum wage at that time. Earlier this year I made the decision to return to college to complete my college degree to make a better life for my family and me. In the short-run I will earn my college degree, and make sacrifices in order to achieve this goal. In the long-run I will have a more opportunities available to find a job and earn a higher income compared to some of my peers who have chose not to attend college. The desire for highly skilled workers has always been seen in the labor market, the recessions we have seen have only made those worker requirements more prominent.

Second, the increasing levels of income inequality have shown substantial gaps in educational opportunities and achievements between the rich and poor. The populations in the upper fifths of the income distribution have not only more wealth, but also greater advantages compared to those populations in the lower fifths. Children who grow up rich tend to have more educational opportunities available to them including private charter schools and endless extra-curricular activities. Those children who grow up poor might take advantage of the public school system, and state funded programs that take into account a families income to determine the cost of attendance. A child who grows up poor might not have the opportunity to partake in expensive extra-curricular activities as well. A families income might also determine how likely it will be for a high school graduate to continue on to earn a college degree. It is said that people with more education have higher earnings.

Therefore boosting college education is seen by many as a way to lift people out of poverty, combat growing income inequality, and increase upward social mobility (Hershbein, 2016). More education might mean higher earnings and this can easily be seen in the Nursing profession. Nurse’s salaries can vary depending on the degree they have earned, not all Nurses are equal in this sense. In 2011, a nurse that holds a two-year degree on average can earn $58,000 per year, a four-year degree can earn $64,400 per year, and a master’s degree could earn $69,500 per year (Severson, 2017). I grew up attending a very small school district in Crawford County, Wisconsin. In Crawford county 13.6% of the population is below the federal poverty level, almost the same as the national average of 14% (Data USA, 2018). In my graduating class of 56 students, two did not graduate, one entered an apprenticeship, about twenty went on to college, and many chose to enter the workforce.

Those that attended college either came from a family that had more income than others or they had earned a scholarship of some type to pay for school. Those students have now successfully completed their college degrees and have now moved to bigger cities and are doing very well for themselves. Many of those that have chose just enter the workforce with a high school diploma are still working, but haven’t made advances like the rest who have gone to college or completed an apprenticeship learning the necessary skills to keep moving up in their respective fields. In order to make sure future generations are able to meet the changing structural demands of the labor market we must provide options aside from pushing high school juniors and seniors to apply to colleges. An apprenticeship is a great option for a student that knows the field they want to have a career in. This option typically pays the apprentice to get paid for their work, but also the classes required. They will earn a fair wage that is scaled to the level of their apprenticeship and will have benefits such as health, dental, and a 401K. This option will leave a person without the student loan debt that many of their peers will be strapped with upon their graduation.

Finally, the intergenerational spread of poverty can be caused by income inequality. If those families at the bottom of the income distribution observe middle class as “out of reach”, they might give up the ideal American Dream causing the cycle of poverty and inequality to continue. Home ownership is a large part of the American Dream. In the United States, as of 2014, less than half of black (41%) and Hispanic families (45%) live in owner-occupied housing. For white families 71 percent live in an owner-occupied home (Martinovich, 2017). Owning a home has its advantages such as accumulating home equity and even tax breaks. While renting can put a family even more in debt making the climb from poverty that much higher. Roughly one in six black and Hispanic households spend more than 50 percent of their income on housing, leaving even fewer resources to devote to their children’s education, healthcare and other basic needs (Martinovich, 2017). One explanation of poverty in the United States, states that it stems from the lack of equal opportunity including racial, ethnic, gender, and age discrimination, lack of adequate schooling and healthcare, and structural changes in the labor market (University of Minnesota, 2016). These issues are sustaining the cycle of poverty in which poor children are many times predetermined to end up in or near poverty themselves when they reach adulthood.

It is imperative that we invest in all Americans so that they can become a contributing member of our society. Helping those to acquire the skills needed to succeed in the labor market whether they choose to acquire higher education or if they choose to join the workforce will be important. A solution to the inequalities we see today would be to provide adequate education and employment training to the families of the lower levels of income distribution. This improvement in education would help to increase family income and improve the labor market. This equality in education would bring each individual to a minimum standard set by an Equity in Education program. In my opinion this would be a better resolution than increasing benefits for those on welfare or increasing a basic income provided by the government. The young children of our society is where the future of the United States rests and making sure they are taken care of is of the utmost importance. There are already several programs in place for children living in poverty including the Supplemental Nutrition Assistance Program, Medicaid, Aid to Families with Dependent Children, Head Start, Children’s Health Insurance Program, and many other state funded programs as well (Flores, 2014). Marian Wright Edelman stated “We should have no poor children in the richest nation on Earth.” To that end, it is important that child psychologists and advocates promote policies that will ensure the social, physical, and material needs of children are met. The American Dream is achievable by all who are willing to change their outlooks and make climb out of poverty.

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Poverty and the American Dream. (2021, Mar 01). Retrieved January 28, 2023 , from

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