"The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement."
That idea – and those words, written by James Truslow Adams in 1931 – forms the foundation upon which the country was built.
But that foundation has cracked.
It’s one thing to fantasize about
living the American Dream from regions outside the United States. It’s another to be already living in America and to not be able to attain it.
And while the American Dream ensures that no one is legally barred from reaching their full potential, it doesn’t prevent individuals from being held back in other ways. After analyzing the cost of living and median income levels in 74 U.S. cities, we found significant obstacles to obtaining the American Dream across the country.
Picture Perfect, American Dream–Style
Imagine it: You own a 1,480-square-foot home with a one-car garage, perfect for your family of four and all your needs, all nicely contained by a manicured front lawn and a white picket fence. You also have the funds for two adults-only dinner dates and one trip to the movies per month.
Sounds nice, right? That version of material wealth and comfort will cost you roughly $3,547 per month, or $42,548 per year.
The bulk of your expense is not even the mortgage; instead, it’s the monthly groceries. Clearly, you have very hungry mouths to feed.
Don’t forget, it will cost you approximately $245,000 to raise a child until the age of 18. And the typical American Dream usually includes at least two children.
Getting Ahead, Just by Demographics
Based on three criteria, we can easily divide the 323.5 million people living in the United States into “those who can afford to live on easy street” and “those who cannot” – the “haves” and “have-nots,” a concept that American literature has widely explored and that American citizens experience every day.
According to our research, the first required criterion for becoming one of the “haves” is simply to be a man. Despite the fact that women make up
nearly half the workforce – and act as the main, or at least equal, breadwinner in 4 out of 10 households – women earn only 79 cents for every dollar that a man makes, according to 2015 figures. That’s a gender wage gap of 21 percentage points.
The second criterion for becoming one of the “haves” is to be either white or Asian.
And the third criterion is age: those most likely to be “haves” are Asian men between the ages of 35 and 54, and white men between the ages of 35 and 64.
The implications of failing to fall into those three categories are staggering, especially when we focus on the 35 to 44 age range. An Asian man in this age range will make $66,318 each year, but his female counterpart won’t even crack $40,000. The same disparity holds true for white women.
And many black men and women, as well as Hispanic men and women, sit far below the American Dream line – in some cases, by as much as $20,000, according to median results.
Needing Smarts to Succeed
From the first day of kindergarten, and possibly even before, American children learn that an education is the gateway to success. With it, there is nothing they can’t do; but without it, they are destined to fail.
To some extent, this maxim proves to be true. Statistically, both men and women with minimal education – a high school diploma, or less – will not head quickly toward the American Dream. Even those with some college education, but without a degree, sit below the required $42,000.
However, with a master’s, doctorate, or professional degree, a man’s salary is almost guaranteed to exceed the income required to live comfortably. A man with a professional degree can expect to earn at least six figures, while a woman can expect to earn approximately $63,000. And while this discrepancy is shocking, it pales in comparison to the discrepancy between men and women who have an associate or bachelor’s degree. For women with these degrees, even achieving financial security remains a challenge.
Based on median income, a woman who has earned a bachelor’s degree will make $40,033, while a man who has obtained his associate degree will see nearly $44,000. That puts him, but not her, on track toward a white picket fence. It’s a trend that’s echoed in every education increment.
Reality Sinks in for Major American Cities
It’s no secret that coastal living is expensive. However, we might go a step further and say that the American Dream is fast becoming a fantasy on the coasts. That statement sharpens the cold, hard facts and puts them into perspective.
The good news is that middle America and the Southwest still offer a thriving environment for the American Dream. It’s hard to imagine just how far the dollar can go before moving there, according to
“For example, when I tell people I bought my 2,000-square-foot Indianapolis home on one-third of an acre for a cool $188,500, they often look at me like I have three heads,” she writes in her article, “A Potentially Easier Way to Get Rich: Move to the Midwest.” “In fact, I’m pretty sure they assume I’m being dishonest somehow, or that my home is actually a giant cardboard refrigerator box. But they’re wrong.”
Sure, she admits, the Midwest isn’t nearly as exciting as the East and West Coasts. However, small-town festivals provide entertainment, and open fields and parks (instead of congested, busy streets) are perfect for children. And community theater, while it’s not the Broadway stage, provides a dose of much-needed culture.
Depending on your priorities, the Southwest and Midwest could be the answer for your American Dream – at least until more people catch on to the trend.
Look No Further for the American Dream
Of these 53 cities where the good life is attainable, the vast majority are inland or comfortably nestled in the Midwest and Southwest– which should come as no surprise.
At the top of the list is Fairfax, Virginia, where the median yearly savings add up to roughly $45,500, mostly thanks to the approximately
$100,500 median household income and the fact that
91.7 percent of its residents have finished high school.
Anchorage, Alaska, boasts a yearly savings of about $32,200, with a median household income of $78,121 and a graduation rate of 92.5 percent. Stamford, Connecticut, rounds out the top three cities, with $28,268 in savings, a $77,221 median household income, and a graduation rate of 87 percent.
Zero Dreamers in Sight
New York, New York: It’s a wonderful town – for those with a boatload of disposable income or absolutely zero interest in making it in America.
When purchasing the typical 1,480-square-foot home, New Yorkers pay approximately
$1,625 per square foot, for a grand total of $2.4 million worth of real estate. The average person needs to earn nearly $90,000 in addition to their income to afford the American Dream in New York.
That’s the extreme. In San Francisco, the tune is more like $36,500 in supplemental income, which 25-year-old
Peter Berkowitz was simply not willing to pay. Instead, he constructed an 8-foot-long bedroom pod inside his pal’s apartment, so he could live up the street from the beach for a fraction of the rent he would otherwise be paying.
Where to Find the American Dream
As shown on the map, the United States comprises pockets of affordability and unaffordability. The states where you are most unlikely to thrive are New York and Massachusetts thanks to housing costs.
And while Hawaii offers insurmountable beauty, very few people can afford the American Dream there. Island living is insanely expensive. A
minor example that speaks volumes: In Hawaii, a five-pound sack of potatoes will run you $6.48, more than twice the national average.
Overall, people living in California, Oregon, Washington, Florida, and much of the East Coast have a harder time building their savings accounts than those in the Southwest and Midwest, due to a larger disparity between income and expenses.
Barely Getting By
This past spring, New York Governor Andrew Cuomo signed a law that enacted a statewide $15 minimum wage plan. Portland, Oregon, also bumped up its minimum wage, and the issue of minimum wage looms large in this year’s presidential race – for good reason.
In Hawaii, the issue seems most severe. The current minimum wage is $7.75, but in order for Hawaiians to afford the American Dream, minimum wage would need to be raised to $34.49 – nearly 4.5 times higher than what it is now.
The pattern continues throughout the U.S. If citizens are to have any hope of reaching the American Dream, the minimum wage in Washington, D.C. – as well as in New York, California, Alaska, and Connecticut – needs to be about three times higher than it currently is, while the minimum wage in Mississippi needs to be about twice as high.
For now, the minimum wage debate only focuses on getting Americans above the poverty line. Perhaps focusing on the Dream will come next.
For some parts of the country, namely the Southwest and Midwest, the risk of never achieving the American dream is slim. There, the American Dream is alive and well. And while residents give up a certain level of excitement and culture to live in these locations, they get more bang for their buck and live more comfortably.
In the coastal areas and big cities, it’s nearly impossible for Americans to live out the ideal picture of the picket-fenced life. For them, the American Dream changes once again, and they must adjust it to fit their mold of what brings them happiness, security and comfort.
All of the data regarding cost of living by city were gathered from Numbeo on May 1, 2016. To create the U.S. state map, we gathered average cost of expenses from local cities and average median income levels to determine the average state income and expenses for the American Dream.
We calculated all expenses on a monthly basis using pricing data from Numbeo. U.S. Median salary data were collected from the U.S. Census based on city or demographic.
- Housing: The median U.S. home size (1,480 square feet) was taken from U.S. Census data. The cost for the median-sized U.S. home for each city was established, and the monthly mortgage payment was inferred from mortgage rate data (assuming a 20 percent down payment and 30-year term).
- Utilities: Cost covers electricity and high-speed Internet (10 Mbps, unlimited data).
- Car payment: To calculate monthly payments for a new car, we took the city APR with the assumption of a 20 percent down payment and a 60-month loan.
- Gas: The average gas consumption (40 gallons per month) was taken from the United States Department of Energy, and the cost of gas was found by using prices by city.
- Food: The monthly minimum per person was multiplied by four (for a family of four).
- Dining out: Cost covers two dates per month for adults (three-course meal for two at a mid-priced restaurant) and four inexpensive meals per month for the family.
- Entertainment: Cost covers the price of a family attending one movie together each month.
- Salaries: All salaries are median single-income household salaries from U.S. Census data.
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