Report: Inequality is making it harder to achieve American Dream

American dream harder

Nearly half of today’s 30-year-olds are making less money than their parents did, says a new study about the American Dream.

The American Dream is in trouble

Don’t ask 38-year-old Josh Shartzer about that part of the American dream where children do better than their parents. 

“I think it is just dream -- and I think it’is gonna be a very hard dream to make a reality” he said. 

“It’s a lot more harder to reach that reality than it was 20, 30, 40 years ago.”

Shartzer lives in Indianapolis and works at Rexnord, a manufacturer of industrial ball bearings. He makes less than half what his dad did selling power for Midwestern grids. 

“It seems like the pie got eaten before I could get any crumbs,” he said. 

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Josh Shartzer lives in Indianapolis and works at Rexnord, a manufacturer of industrial ball bearings. He makes less than half what his dad did selling power for Midwestern grids. CBS News

A new study by researchers at Harvard and Stanford says Shartzer’s experience is now shared by more Americans than ever. In 1970, 92 percent of American 30-year-olds made more than their parents did when they were 30, adjusting for inflation. 

A generation later, in 1992, that number had dropped to 58 percent. The latest figure is a little more than half.

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In 1970, 92 percent of American 30-year-olds made more than their parents did when they were 30, adjusting for inflation.  CBS News

Raj Chetty is one of the researchers. 

“The American dream was a reality, and it just seems less so at the moment,” Chetty said. 

Chetty said that while the economy has certainly slowed, a bigger factor in the trend is the distribution of income.

“We find that most of the decline in rates of achieving the American dream is because growth is not being as broadly shared anymore,” Chetty said. “There’s growing inequality, so fewer kids are getting ahead of their parents.” 

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“There’s growing inequality, so fewer kids are getting ahead of their parents,” says Raj Chetty, a Stanford economist who conducted a new study. CBS News

While this trend was seen across the country, the declines were sharpest among men in the rust belt -- men like Josh Shartzer. And he expects to be out of a job by February. That’s when Rexnord is slated to move his job to Mexico.   

  • Jim Axelrod
    Jim Axelrod

    Jim Axelrod is the senior national correspondent for CBS News, reporting for "CBS This Morning," the "CBS Evening News," "CBS Sunday Morning," and other CBS News broadcasts.