A philosopher ponders the death of the American dream

Locked out.
Locked out.
Image: Reuters/Brian Snyder
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Philosopher Richard Reeves has come to a harsh conclusion about inequality in the US. “America has a meritocratic market but an unfair society,” he writes in the book Dream Hoarderspublished earlier this year.

In Reeves’s view, the US is now a relatively “fair” society for people 25 and older. While he acknowledges that various forms of workplace discrimination still persist, he argues that the US job market increasingly rewards people for their skills, rather than just their race, gender, or who they know. The adult playing field is not quite level, but it is getting there.

The problem, according to Reeves, who is now a researcher with the Brookings Institution, is what happens earlier in life. Children of rich parents have many more opportunities to build skills than those with poor parents. A labor market that increasingly values skills highlights the inequities of education as a result. In other words, the game is fair, but the process of selecting players is rigged.

Reeves’ book, whose full title is Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It, details the many ways that wealthier children are advantaged educationally, and why this inevitably leads to inequality. It starts right from the beginning. Children of parents in the top 20% of income are healthier and thus better able to learn. Their parents speak with them more—approximately three more hours per week. They also spend more on “enrichment experiences” outside of school, like trips, books, and tutors.

Children from the top 20% are more likely to go to a highly rated private school, and if they go to public school, are twice as likely as the average kid to live near one that ranks in the top fifth. They also have better teachers. Reeves points to a study of teachers in Louisiana that shows 38% of teachers in wealthy neighborhood public schools were rated as “highly effective,” compared with just 22% in poorer areas.

Higher education only exacerbates the problem. While almost 60% of 25 year-olds from families in the top 20% in income graduated from college in the late 2000s, that is only true of about 12% of children from the bottom 40%. Children from the top 20% are more than twice as likely to attend a selective college as those from the bottom 40%. At elite institutions (the Ivy League Schools plus University of Chicago, Stanford, MIT, and Duke), more children come from the top 1% than come from the entire bottom 50% (pdf).

Pass it on

Education is inherited, and it is entrenching class. The chart below, based on research by Reeves and the economist Joanna Venator, shows the massive difference in educational attainment status by quintile for children born in the US between 1950 and 1968. Nearly half of kids born to a parent in the top 20% of educational achievement stayed in the top 20% (generally speaking, by earning a college degree). By contrast, less than 10% of kids born to a parent in the bottom 20% of educational status (high-school dropouts) managed to rise to the top quintile in terms of educational attainment. More recent data is unavailable, but limited evidence suggests this inequality is getting worse, not better.

To explain the unfairness of the current US system, Reeves turns to a thought experiment of the philosopher Bernard Williams. Williams describes a society in which becoming a member of the “warrior class” was highly prized. Historically, only members from a group of rich families were allowed to become warriors. A rule change is made to allow any member of the society to gain this status. But because becoming a warrior entails strength, and all the other families are undernourished, all of the warriors continue to come from the same rich families. Ostensibly, the rule change made society more fair. In reality, it didn’t. If you swap warrior for student, Reeves believes this is a good analogy for the US economy.

For the most part, Reeves doesn’t blame wealthy parents for these discrepancies. Naturally, parents want to give their children the best opportunities possible. This impulse should be celebrated.

He also doesn’t think we should move away from a labor market that rewards education. “Markets increase prosperity, reduce poverty, enhance well-being, and bolster individual choice,” writes Reeves.

The only remaining choice then, in Reeves view, is to even the educational playing field for poorer kids. “Rather than trying to rectify inequality post hoc, through heavy regulation of the labor market, our ambition should be to narrow the gaps in the accumulation of human capital in the first two and a half decades of life,” he writes.

What inequality?

One obstacle to getting people on board with such reforms is that Americans don’t actually recognize that there is a problem. A recent study by economists at Harvard University found that, compared with four other rich countries, Americans are unusually deluded in their beliefs about intergenerational mobility.

When surveyed about the probability of a child from the bottom 20% of income reaching the top 20%, British, French, Italian, and Swedish people all underestimated the likelihood of this happening in their country. Americans were the only group to overestimate it—they thought their country had the highest mobility, when it actually had the lowest.

If Americans recognize that there is a problem, Reeves has a number of recommendations addressing it. He thinks the government should invest in programs that help parents avoid unintended pregnancies, increase the use of home-visiting programs (like in the United Kingdom), incentivize more of the best teachers to work in low-income schools, and invest heavily in community colleges. He would also eliminate housing regulations that discourage cheaper housing from being built in rich areas, end legacy admissions at colleges, and get rid of the mortgage interest tax deduction, a tax law that helps wealthier people buy houses in expensive neighborhoods.

While Reeves’s policy suggestions are worthwhile, they perhaps don’t go far enough. Reeves is a natural moderate, and his recommendations seem geared to winning over fiscal conservatives. Making a real dent in America’s intergenerational mobility problem likely entails actions that would make conservatives and many liberals uncomfortable, like integrating public schools (pdf) across class and race lines and investing in extensive early childhood interventions for poor families.

If the American dream isn’t already dead, it’s in critical condition. Aggressive action is needed to revive it, but the first step, for both policymakers and the general public, is to acknowledge the severity of the situation.