Structural Mobility and the American Dream: Push and Pull Factors

By Karen Sternheimer

You are probably familiar with the concept of the “American Dream,” the idea that anyone who works hard in the United States has the chance to experience upward mobility. What factors make this more or less possible?

First, some history (which I write about in my book Celebrity Culture and the American Dream: Stardom and Social Mobility). The phrase “American Dream” was first used—ironically enough—during the Great Depression, when the dream was largely out of reach for most Americans (more on this in a moment).

Before the “American Dream” was popularized in 1931, the nineteenth century writer Horatio Alger wrote popular “rags to riches” stories, popular in the 1860s-1880s. These novels focused on poor boys, often on their own, who work diligently are of high moral character, and ultimately “pull themselves up by their bootstraps” to achieve success.

Reality was much bleaker for Americans in the nineteenth century than Horatio Alger stories might suggest. These stories were set during the so-called “Gilded Age,” when industrial wealth expanded and income inequality rose.  As the Center for Global Development described, poverty rates were as high as 40 percent of all Americans in 1820, falling but hovering around 20 percent by 1880. According to the PBS American Experience episode “The Gilded Age:”

During the "Gilded Age," every man was a potential Andrew Carnegie, and Americans who achieved wealth celebrated it as never before. In New York, the opera, the theatre, and lavish parties consumed the ruling class' leisure hours. Sherry's Restaurant hosted formal horseback dinners for the New York Riding Club. Mrs. Stuyvesant Fish once threw a dinner party to honor her dog who arrived sporting a $15,000 diamond collar.

While the rich wore diamonds, many wore rags. In 1890, 11 million of the nation's 12 million families earned less than $1200 per year; of this group, the average annual income was $380, well below the poverty line. Rural Americans and new immigrants crowded into urban areas. Tenements spread across city landscapes, teeming with crime and filth. Americans had sewing machines, phonographs, skyscrapers, and even electric lights, yet most people labored in the shadow of poverty.

To those who worked in Carnegie's mills and in the nation's factories and sweatshops, the lives of the millionaires seemed immodest indeed. An economist in 1879 noted "a widespread feeling of unrest and brooding revolution." Violent strikes and riots wracked the nation through the turn of the century.

Before the 1930s, there were virtually no federal programs to assist those in poverty; no minimum wage, no limit on how many hours an employee might work, and no laws prohibiting child labor. Thus, children often worked in order to help their families survive. Upward mobility would have been difficult for those experiencing poverty.

While social mobility is the movement upward or downward on the social class ladder, structural mobility is the ability to move up (or down) due to changes in laws, policies, economic changes, technological advances, and historical shifts. Simply put, these factors impact what kinds of jobs are available at any given time, how much they pay, and how much it costs to buy food and pay for housing.

We often focus on individual factors when it comes to mobility: personal skills, talents, effort, and educational attainment, for instance. But structural factors are at least as important, if not more so, in understanding why people might experience an increase in wealth, income, and status.

During the Gilded Age, there were no antitrust laws preventing monopolies until 1890, limited taxation or labor laws until the twentieth century. This meant some people could amass large fortunes while others had few economic protections. These structural conditions had a significant impact on the types of opportunities available and shaped the growth of an extreme wealth and income gap.

This vast degree of inequality was exacerbated after the stock market crash of 1929 and the start of the Great Depression, which lasted until 1939. This is another structural factor which would make upward mobility difficult, and downward mobility quite likely for many. For instance, nearly one in four Americans was unemployed during the height of the depression in 1933. As the financial and housing markets crashed, many people in these sectors lost their jobs—much like during the more recent Great Recession of 2007-2009.

Technological changes are also sources of structural mobility, as they may increase some types of jobs and decrease others. The rise of digital technology means that some jobs are filled by far fewer people. Think about how many times your customer service “agent” is a chat bot, or you go through self-checkout at a store, or don’t go to a store at all and order something online (likely to be shipped from a mechanized fulfillment center).

By contrast, if you are skilled at developing apps or other software development, these technological changes have produced more opportunities. Likewise, if you are working from home or taking classes online, you might not eat lunch at a local eatery by your campus or office, limiting those jobs.

The COVID-19 pandemic was another source of structural mobility, causing some people to lose their jobs. At the start of 2020, the unemployment rate in the U.S. was 3.6 percent; by the end of June, it was 13 percent. A policy to provide enhanced unemployment benefits during the height of the pandemic likely saved five million people from falling below the poverty line and possibly saved 27,000 lives according to the Center on Budget and Policy Priorities.

What other structural factors shape opportunities today and in the past?

Comments

[Emily]

Demographic factors can also have huge impact on social mobility. If a government encourages a family to give birth to too many children, then they will find difficult to find jobs when they grow up. It is because jobs in the market is limited but number of people who needs to work is growing too fast.

[love tester]

The irony of the term "American Dream" being coined during the Great Depression is striking. It highlights the disconnect between the ideal and reality for many Americans throughout history.