15 States Where the American Dream Is Vanishing
According to a recent ABC News/Ipsos poll, only 27% of Americans believe the American Dream—which embodies the idea that hard work leads to upward mobility—still holds today. This represents a sharp decline from 50% in 2010, underscoring a growing disillusionment with the concept.
But how does this national sentiment play out at the state level? By analyzing trends such as income inequality, housing costs, education accessibility, and economic mobility, we can identify states where the promise of the American Dream seems increasingly out of reach.
Here are 15 states where these issues are most acute, illuminate the contributing factors, and provide insights about mitigating these trends.
California
For many, California once symbolized boundless opportunity. However, increasing income inequality and soaring housing prices have led 61% of Californians to say the American Dream is more complex to achieve in their state than elsewhere, according to a November 2023 survey by the PPIC.
- Housing Crisis: With median home prices hovering above $700,000, affordability is a significant challenge.
- Income Inequality: California has one of the highest income gaps in the U.S., with the top 20% earning 10.5 times that of the bottom 20%.
- Population Decline: The state has seen an exodus, with many middle-income families relocating for better opportunities.
Mississippi
Mississippi consistently ranks among the poorest states in the nation, with high poverty rates impacting residents’ ability to move up economically.
- Economic Stagnation: Mississippi’s GDP per capita is the lowest of any state.
- Education Gaps: The state has one of the lowest postsecondary education attainment rates, limiting access to better-paying jobs.
New York
Despite its reputation as a global hub for opportunity, New York faces stark disparities in income and cost of living.
- Cost of Living: To be considered middle-class in New York City, one must earn a minimum annual income of around $81,396.
- Economic Disparities: According to the Office of the New York State Comptroller, upstate regions struggle with job losses from declining industries.
Michigan
Michigan’s post-industrial decline, particularly in cities like Detroit, has diminished upward mobility.
- Declining Manufacturing Base: Once the backbone of Michigan’s economy, the automotive industry has downsized significantly.
- Income Mobility: Research from Opportunity Insights found that Michigan experienced one of the sharpest drops in absolute mobility, with only 43% of children born in the 1980s earning more than their parents.
Louisiana
Economic inequality and financial instability make Louisiana another state where achieving the American Dream is increasingly challenging.
- High Poverty Rates: Statista found that nearly 20% of residents live below the poverty line.
- Natural Disasters: Frequent hurricanes exacerbate economic disparity by disproportionately affecting low-income communities.
Alabama
Economic opportunity in Alabama is hindered by limited access to education and healthcare and regional disparities in job availability.
- Educational Barriers: According to the World Population Review, the state ranks in the bottom ten for educational attainment.
- Healthcare Access: Alabama’s healthcare system struggles with funding and accessibility, disproportionately impacting lower-income residents. Census data shows that 41% of households in Alabama are struggling to cover everyday expenses, making the state the third-worst in the nation for financial hardship.
Arkansas
Economic stagnation and limited advancements in education make Arkansas another state where the American Dream is slipping away.
- Job Market Issues: Many rural areas depend on small-scale agriculture and lack diverse, high-paying job opportunities.
- Income Inequality: Persistent wage gaps exacerbate the issue, particularly for minority populations.
Illinois
The state’s fiscal issues and disparities between urban and rural regions contribute to a vanishing American Dream.
- Declining Mobility: Income mobility in Illinois mirrors troubling national trends, with fewer people able to surpass their parents’ earnings.
- Regional Divide: Chicago remains a hub for opportunity, but rural Illinois lags in job creation and infrastructure.
West Virginia
This Appalachian state struggles with poverty, unemployment, and limited economic diversification.
- Population Decline: People are leaving the state due to economic stagnation, shrinking the labor force.
- Health Outcomes: Poor health indices compound issues of economic immobility.
Nevada
The state’s tourism-driven economy creates challenges for residents looking for steady, upwardly mobile careers.
- Job Instability: Service-based jobs dominate the workforce, which limits access to middle-class stability.
- Housing Costs: Rising costs, especially in Las Vegas, increasingly strain household budgets.
South Carolina
Structural barriers, including educational deficits and income imbalances, hinder residents’ upward mobility in South Carolina.
- Low Wages: Many jobs in the state are low-paying, even for college graduates.
- Education Access: Investment in higher education remains underfunded, limiting prospects for younger generations.
Oklahoma
Economic inequality and underfunded public education systems are significant hurdles in Oklahoma.
- Income Gaps: Wealth remains concentrated in urban centers like Tulsa and Oklahoma City.
- Healthcare Accessibility: Rural residents, in particular, face significant challenges in obtaining affordable healthcare.
Kentucky
Kentucky residents see fewer upward mobility opportunities due to a lack of economic diversification.
- Industry Reliance: The state’s reliance on coal has limited its ability to adapt to modern industries.
- Education Challenges: Public schools often underperform, leaving many students unprepared for college or career advancement.
Texas
While Texas boasts a growing economy, this prosperity is uneven and leaves many residents behind.
- Housing Affordability: The Texas Comptroller says rapid population growth has skyrocketed rent and home prices.
- Income Inequality: Wealth disparities are stark, particularly in urban centers like Houston and Dallas.
Florida
Florida’s popularity as a retirement destination has strained resources and increased costs for working families.
- Housing Crisis: Median rent prices across the state have surged by over 20% in recent years, based on data from the World Population Review.
- Job Market: The prevalence of seasonal and tourism-based jobs limits economic stability for many residents.
What’s Driving the Decline of the American Dream?
While specific challenges vary by state, several overarching trends shed light on why the American Dream feels increasingly out of reach for many Americans:
- Income Inequality: A growing wealth gap disproportionately impacts middle- and lower-income earners.
- Housing Affordability: Escalating property values make homeownership—a traditional marker of success—unattainable for many.
- Rising Costs: From healthcare to higher education, essential goods and services exceed wage growth.
What Can Be Done?
Reviving the American Dream will require coordinated efforts to address these systemic challenges. Policymakers must focus on equitable economic development, increased investment in education, affordable housing initiatives, and access to high-quality healthcare.
The American Dream remains a powerful ideal, but its foundations are increasingly shaky. By recognizing the factors hindering opportunity and advocating for systemic change, we can work toward a society where upward mobility is achievable.
For more insights on economic mobility and public policy, explore the Opportunity Insights platform or contribute your thoughts in the comments.
Disclaimer – This list is solely the author’s opinion based on research and publicly available information.
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