THE AMERICAN DREAM IS ALIVE AND WELL
December 23, 2005
Since the 1970s, most families have experienced a rapid growth in their income and wealth; the average family -- for the first time ever -- has a net worth of more than $100,000, say Stephen Moore and Lincoln Anderson (Wall Street Journal).
Research shows that Americans are experiencing an astonishing pace of upward income mobility, say Moore and Lincoln:
- In 1967, only one in 25 families earned an income of $100,000 or more in real income; today, one in six do.
- The percentage of families with an income of more than $75,000 a year has tripled from 9 to 27 percent.
- The percentage of families with real incomes between $5,000 and $50,000 has been falling as more families move into higher income categories -- the figure has dropped by 19 percent since 1967.
This shows that upward mobility is the rule, not the exception, in America today, says Moore and Lincoln; therefore, the middle class is not shrinking, as previously thought, but is getting richer:
- In 1967, the middle-class income range was between $28,000 and $39,500 a year, now that range is between $38,000 and $59,000 a year.
- The upper-middle class is also richer; today, those falling within the 60th to 80th percentile in family income have an income range of between $55,000 and $88,000 a year, which is about $24,000 a year higher than 1967.
- In 2004, the total net worth of Americans rose to $50 trillion and the median household income was estimated at $105,000; that's nearly double the median family-wealth level of 1983 and triple the level in 1962.
Furthermore, this rapid growth indicates that the American Dream, in which each generation achieves a higher living standard than their parents, is alive and well, says Moore and Lincoln.
Source: Stephen Moore and Lincoln Anderson, "Great American Dream Machine," Wall Street Journal, December 21, 2005.
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