6.5 The American Dream and Meritocracy
LO 6.5: Explain how the myth of meritocracy affects the American dream.
The American dream is the belief that anyone can achieve economic prosperity through hard work (Lamont, 2019). For most, achieving the American dream includes realizing financial success, often characterized by upward social mobility or increased social class status from one generation to the next. The American dream is based on four beliefs: (1) everyone has an equal opportunity to achieve the dream; (2) everyone has the right to expect success; (3) success is within the person’s control; and (4) success is moral (Hochschild, 1995).
Belief in the American Dream
Most people in the United States believe they have already achieved the American dream (36%) or are on their way to achieving it (46%) (Smith, 2017). Wealth has increased for most families since the 1980s (see Figure 6.9). However, the wealth among upper-class families grew by 116.35%. In contrast, wealth grew by 85.43% for middle-class families and 84.58% for lower-class families. Overall, upper-class families have more wealth and it grows faster than it does for middle- and lower-class families.
Figure 6.9
Change in Wealth for Upper-, Middle-, and Lower-Class Families in the United States, 1983-2021 (Adjusted to 2025 Dollars)
Data for 1983, 2001, and 2016 from Horowitz, J. M., Igielnik, R., & Kochhar, R. (2020, January 9). Trends in income and wealth inequality. Pew Research Center. https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/#income-inequality-in-the-u-s-has-increased-since-1980-and-is-greater-than-in-peer-countries. Copyright 2020 by Pew Research Center. Data for 2016 and 2021 from Kochhar, R., & Moslimani, M. (2023). 3. How wealth and wealth gaps vary by income. Pew Research Center. https://www.pewresearch.org/2023/12/04/how-wealth-and-wealth-gaps-vary-by-income/ Copyright 2023 by Pew Research Center.
Income Decline
Remember, for most people in the United States, wealth comes from the value of their home. While home values have increased (and thereby increasing wealth), incomes have not. Figure 6.10 shows how median household income in the United States has changed since 1984. Median income increased after declining during the Great Recession (2007 – 2009). However, over a longer period, incomes have declined. Chetty et al. (2017) find that U.S. residents born since 1980 are less likely to earn more than their parents at age 30 than those born before 1980. Income declines across income levels, but middle-class families have experienced the most significant decline. Of all children born in 1940, 95% earned more at age 30 than their parents did at that age (Chetty et al., 2017). In contrast, only 41% of children born in 1984 earned more than their parents at age 30 (Chetty et al., 2017).
Figure 6.10
Changes in Median Household Income in the United States, 1984-2023
Data based on FRED. (2024). Real median household income in the United States. FRED, Federal Reserve Bank of St. Louis. https://fred.stlouisfed.org/series/MEHOINUSA672N#. In the public domain.
Meritocracy
Despite evidence that the average person is economically worse off than in the recent past, U.S. adults continue to believe the American dream is personally achievable because of the pervasive belief that the United States is a meritocracy (Mijs, 2018), despite ample evidence that meritocracy is a myth. A meritocracy rewards things like prestige, income, and wealth through personal merit, which is shown through hard work, soft skills, and credentials (a degree or license) (Yair, 2011). In a meritocratic society, inequality of outcome is considered acceptable and even preferable because it shows that rewards come from hard work and talent.