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Washington has missed the point. We need to return to the American Dream of opportunity for all.
BOSTON — World markets and ordinary citizens of many nations breathed a sigh of relief this week as America’s elected leaders hammered out a compromise plan to keep the country from defaulting on its obligations.
But the really hard and fundamental problems facing America remain unaddressed — the growing disparities in wealth and income, the enormous ranks of the unemployed and the underemployed, and the pressing need to make strategic investments to spur growth in the nation’s ailing economy.
Few could deny that restoring fiscal health to America is vitally important. But the cure devised in Washington comes awfully late and the pain to be imposed will make other national imperatives much more difficult to address.
Multi-trillion dollar reductions in spending mean that any government effort to stimulate growth and make new investments will be very difficult to undertake. America will be heavily dependent on the willingness of the private sector to step in and make the key investments in future economic growth that are desperately needed at this precise moment.
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“The American Dream, with its promise of upward mobility for all, is one of this country’s most inspiring realities.”
America is coming dangerously close to institutionalizing hopelessness among large segments of its population, including many in the middle class, something that has never happened before in the nation’s history. If this comes to pass, it will sow the seeds of social unrest that could easily lead to political opportunism and even the search for the kind of simplistic solutions that have caused tragedy in other countries at other times in history.
The American Dream, with its promise of upward mobility for all with the will and means to seize it, is one of this country’s most inspiring realities. That’s why it’s essential to move from debate over America’s debt to debate over how to reverse the intolerable levels of unemployment and wealth distribution in America.
According to just released data from the U.S. government, the median wealth of white households has grown to 20 times that of black households and 18 times that of Hispanic households — the largest gap since the Census Bureau began publishing such information 25 years ago.
Brought about by the Great Recession and the bursting of the housing bubble, inflation adjusted median wealth plummeted 60 percent among Hispanic households and 53 percent among black households from 2005 to 2009, compared to a 16 percent decline among white households.
Such disparities are a disgrace especially for a country where 50.5 million people are of Hispanic origin. Moreover, Hispanics represent 23 percent of Americans who are 17 years old or younger. Racial and ethnic minorities accounted for 92 percent of the nation’s population growth over the past decade, a trend that will almost certainly continue throughout this decade and beyond.
Unemployment in America is another silent tragedy. The figure 9.2 percent hardly tells the story. There are 14.1 million Americans without jobs — 44 percent of them, or 6.3 million, have been unemployed for more than six months.
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Another 8.6 million people are employed only part-time. They want full-time work but cannot find it. An additional 2.7 million people are no longer counted in the labor force even though they want a job, are available for work and have looked for a job sometime in the prior 12 months. These people have simply given up.
Put all of those individuals together and you have the stunning total of 25.4 million unemployed or underemployed people — that’s 17 percent of the American workforce. Sadly, many of the jobs they had have been exported overseas and are not coming back. What more fundamental obligation does a country have to its citizens than to help them secure a decent and honorable way to make a living?
Last but not least, while disparities in income and wealth have been well known in the United States for some time, the gap has grown alarmingly wide in recent years. In 2010, the top 20 percent of Americans earned 49 percent of the nation’s income compared to just 3 percent for the bottom 15 percent. The top one percent of Americans control 43 percent of all financial wealth, defined as marketable assets like cash, stocks and bonds but not including the value of a person’s home, while the bottom 80 percent of Americans control just 7 percent of the country’s wealth.
This is the true backdrop to the summer of discontent in Washington. This is a decisive moment in American history and it demands the best leadership from both government and the private sector.
There is time to chart a better course and to preserve the American Dream for all the country’s citizens. The debate on how to achieve that goal is far more important to the future well-being of the United States than the debate that is just ending at both ends of Pennsylvania Avenue.
Let’s hope this new debate begins right now.
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Philip Balboni is CEO and Co-Founder of GlobalPost.