You Are Even Poorer Than You Think

November 16th 2014

Kristal High

The American Dream is built on the idea that if you work hard, make smart, disciplined choices, and remain optimistic, you can achieve your heart’s desire. If you add a dash of fairy dust and unicorn glitter to the mix, you can also live a life rife with the trappings of success – furniture from IKEA, a sporty little hybrid, and a membership to “Insert Name Here” posh gym that everyone adores.

Sounds great. Except, the American Dream has become much more elusive since our parents were kids. For most people, achieving that dream is a daunting, if not seemingly impossible, task, especially if you happen to be a person of color. Pervasive income inequality has created significant wealth gaps between white Americans and their African-American (20:1) and Hispanic American (18:1) peers.

Meanwhile, across the board, we’re fighting to increase the federal minimum wage from the current $7.25/hour to $10.10/hour. The irony is that even as we fight for this increase, it still wouldn’t bring most people out of poverty - the federal Housing Wage (the amount you’d have to earn so that you spend no more than 30% of your income each month on rent) is $18.92/hour – and does not constitute a living wage. Add to the mix a hefty debt load carried by people who try to improve their lives by pursuing higher education, and you’d find that student loan debt has grown to a $1 trillion and counting.

The grim picture painted by the wealth, wage, and debt realities facing Americans is compounded by news that the disparity between CEOs and their employees is far greater than we’d imagined. While most Americans believes their CEO bosses make 30 times what the average worker makes, a recent study from Harvard Business School tells us just how woefully misguided we really are. According to the study, the average American CEO makes 350 times more than their employees.

Perhaps part of the reason for this perception gap is the relative “invisibility” of the super rich in this country. Aside from celebrities – athletes and entertainers – and a few well to do newsmakers, we can’t necessarily tell who the rich are and how they live, mostly because we don’t live in proximity to them. Even still, socializing and affinity groups aside, the problem of income inequality is a pervasive reality in American life and culture that we must start to address in a more concerted manner.

The beauty of the American Dream was that it once seemed attainable by all who were willing to boldly pursue it. To transform that dream into a probable reality, our policies and practices must engender greater equity among the masses.

To fight for a greater wage, click here.

To help advocate for student loan refinancing, click here.

To learn more about the fading American dream, click here.

To learn more about solutions to increase upward mobility, click here.