Thursday Oct 04, 201211:08 AM GMT
Joseph Stiglitz: 'The American dream has become a myth'
Thu Oct 4, 2012 10:40AM
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Nobel Prize-winning economist Joseph Stiglitz.

Rising from rags to riches isn't the American dream; it's an American fairytale, according to Nobel Prize-winning economist Joseph Stiglitz.

 

"The American dream has become a myth," Stiglitz, an economics professor at Columbia University, told the German news magazine Der Spiegel in an interview published Tuesday. "The belief in the American dream is not supported by the data."

 

There's evidence to support such claims. The U.S. has less economic mobility than Canada and much of Western Europe, according to economic research cited by The New York Times. Seven in ten Americans that start out in the bottom fifth of family income stay in the lower class as adults, and more than six in ten Americans that start out in the top family income quintile stay in the upper class as adults, according to a July report by the Pew Charitable Trusts.

 

While the data may not be there to back the idea of the American dream, there are some that still consider it to be pretty important. Republican vice presidential nominee Paul Ryan, for his part, said last year that "70 percent of Americans want the American dream. They believe in the American idea. Only 30 percent want the welfare state."

 

Stiglitz told Der Spiegel that in spite of anecdotes about poor people becoming rich, overall "the life chances of a young U.S. citizen are more dependent on the income and education of his parents than in any other advanced industrial country for which there is data." Huffington Post

FACTS & FIGURES

 

The wealth gap between the richest Americans and the typical family more than doubled over the past 50 years, according to a recent report by the left-leaning Economic Policy Institute. CBC

 

While the U.S. wealth and income gaps have been expanding for decades, the trend was accelerated during the Great Recession. Median family income was 6% lower in 2010 than a decade earlier. CBC

 

Most Americans below the upper echelon have suffered a decline in wealth in recent decades. The median household saw its net worth drop to $57,000 in 2010, down from $73,000 in 1983. It would have been $119,000 had wealth grown equally across households. Reuters

 

The top 1%, on the other hand, saw their average wealth grow to $16.4 million, up from $9.6 million in 1983. This is due in large part to the growing income inequality divide, as well as the sharp rise in value of stocks over the period. Reuters

 

In 1962, the top 1% had 125 times the net worth of the median household. That shot up to 288 times by 2010. CNN

 

AHT/HJ

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