Gross National Income in American Society

Analysis of gross national income per capita and the spread of income levels between households (Gini index) indicates a high degree of imbalances in American society. US social policy aims to create incentives for finding jobs, and the process of retraining or acquiring new professions is attributed exclusively to financing from personal funds. Moreover, the uneven development of households is exacerbated by the debt burden of family budgets due to large contributions for health care, retirement savings, and education in colleges and universities, acquiring the character of a lifelong burden. Throughout the 21st century, stagnant wages and student loan debt has correlated with fewer Americans being able to afford homes and pay off debt.

The phrase “American Dream” first appeared at the height of the economic crisis – in 1931. It was used by the publicist James Thraslow Adams in his book “The Epic of America” ​​- an essay on the development of the country from the time of Columbus to the beginning of the 20th century. The whole premise sounded like this: “… dream of a better, richer and happier life for all our citizens of every rank” (as cited in Wills, 2015). The author focuses on equality: he tells the story of a particular “foreigner” hired by him as a secretary, with whom they often indulged in idle chatter after a working day. Adams’ understanding of the American Dream was the idea of ​​equal dignity for people regardless of social status.

However, the American market economy and the associated upward mobility – the so-called “American Dream” – are dying. A 2017 study by the Federal Reserve Bank of Cleveland showed that in 30 years, the chance of someone not among the 10% wealthiest people in the country to make a decent fortune has halved (). Among the main ways of social mobility in terms of capital accumulation, the researchers examined attempts to get rich through their own enterprise, gambling on the stock exchange, and transactions in the real estate market. However, an essential plot of this story is education and its growing inaccessibility. Researchers have focused on inexorable technological progress: improving technology requires an increased level of education, which requires increased investment. As a consequence, a vicious circle arises in which the rich become even more prosperous because they can provide their children with a quality education.

It seems necessary to analyze the detailed data of other studies that echo this thesis. The average cost of a 4-year study at an American college in 2018 was $ 104,480, that is, twice as much as, for example, in 1989 ($ 52,892 adjusted for inflation) (Maldonaldo, 2021). Each year, the cost of education increased by 2.6%, while salaries grew by only 0.3%. However, 6 out of 10 Americans believe that such a high cost is justified: in the United States, higher education allows one to earn on average 75% more money in a lifetime than just a high school diploma. (Kim & Tamborini, 2019). The quality of American higher education is recognized worldwide: in the top ten of almost any world university ranking, American universities occupy half of the places. It is not surprising that in 2018 7 out of 10 students studied with borrowed money.

Most often, education loans are taken by people from wealthy families (income more than $ 97 thousand per year) – they account for 34% of the total debt for education (Baum et al., 2019). Least of all – 11% of the total debt – are loans to people from low-income families with an income of less than $ 27 thousand per year. Almost two-thirds of the total – $ 900 billion – are owed by women: on average, each of them owes $ 2,700 more for education than a man.

Interest rates for government loans for education are quite high: from 5 to 7.5% (for comparison: loan rates for real estate loans are only 4.3%). At the same time, it is almost impossible to declare bankruptcy and stop paying off a loan for education in the United States – although bankruptcy can allow one to stop paying debts for a car or housing. There is a series of government programs that, in theory, should facilitate payments on student loans, but in practice, they often do not work. For example, according to the 2007 program launched by Bush Jr., part of the debt for education can be written off if a person works in the public service. During its existence, applications have been submitted by 30 thousand people, but only 96 of them were satisfied.

Besides, US housing is becoming increasingly inaccessible to the average American. In most cities, property prices are growing much faster than income (Anaker, 2019). In most cities, house prices have now reached new all-time highs that exceed pre-crisis highs. Households in the United States already spend a significantly larger proportion of their income on the housing they live in, leaving them less and less disposable income to meet other needs. Many buyers, for example, at the beginning of this year, spent more than one-third of their income paying off their mortgages (Ashton & Christophers, (2018). The average cost of homeownership in the United States for the year to September 2020 increased by 13 percent, to 319 thousand dollars (Ellis, 2020). This is a record annual increase in prices over the past seven years, since October 2013, analysts say. Such rapid growth of the market is especially unfavorable for those who buy housing for the first time.

Thus, contemporary American reality no longer reflects the principles laid down in the American Dream, which assumes that everyone has a chance to succeed in a free market economy. Education, as one of the most important tools of upward mobility for overcoming class and other barriers, is becoming inaccessible. At the same time, housing for Americans is becoming more and more unattainable financially, affecting the standard of living. In fact, people do not have social mobility, and there are significant inequalities between them.


Anacker, K. B. (2019). Introduction: housing affordability and affordable housing. International Journal of Housing Policy, 19(1), 1-16.

Ashton, P., & Christophers, B. (2018). Remaking mortgage markets by remaking mortgages: US housing finance after the crisis. Economic Geography, 94(3), 238-258.

Baum, S., Lee, V., & Tilsley, A. (2019). Which Households Hold the Most Student Debt? Urban Institute.

Ellis, T. (2020). 2020 Housing Market Forecast: More Buyers, Fewer Homes for Sale. Redfin Real Estate News.

Kim, C., & Tamborini, C. R. (2019). Are they still worth it? The long-run earnings benefits of an associate degree, vocational diploma or certificate, and some college. RSF: The Russell Sage Foundation Journal of the Social Sciences, 5(3), 64-85.

Maldonado, C. (2021). Price Of College Increasing Almost 8 Times Faster Than Wages. Forbes.

Wills, M. (2015). James Truslow Adams: Dreaming up the American Dream. JStor Daily.

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