Random Thoughts from a Restless Mind

While fooling around on social media I came across a post from a prominent Harvard economist about the American Dream. Now to be honest that’s not a phrase he used in his post, but that is precisely what he was talking about. He lamented the findings in a recent study from Georgetown University that evaluated whether academic achievement or existing family wealth was a better predictor of eventual economic success. https://cew.georgetown.edu/cew-reports/schooled2lose/  The study looked at demographic and academic data from publicly available sources for the period between 2002 and 2016. It concluded that existing family wealth was more important than acadeemic achievement in predicting rather modest income and wealth outcomes. https://1gyhoq479ufd3yna29x7ubjn-wpengine.netdna-ssl.com/wp-content/uploads/FR-Born_to_win-schooled_to_lose.pdf (See part 3).

While the finding over the period studied does not really surprise me all that much (although I’d love to see the raw data to see if it was cherry-picked to produce the outcome), there was a paucity of deeper inquiry in the downstream responses to the Harvard academic’s post and lament. Indeed, each post clearly either assumed or stated outright that this is, and has always been, the great stain on the American Dream. But is that actually true? Has preexisting family wealth always been more important than academic achievement in determining next generation financial success? Seems like a logical question to ask; our culture, indeed our national personality is deeply invested in the opposite outcome. And so I asked the obvious (to me) question: if this has not always been the case (my premise), at what point in U.S. history did the factor “flip”?

You can imagine the scorn that my question received and the barely concealed contempt with which those who responded held for both the question and the person asking it. But seriously, even if you take for certain the conclusion of the Georgetown study, our history is just filled with both micro and macro evidence that shows that academic achievement was the singular driver of next generation wealth for decades beginning no later than 1920. You need look no further than the GI Bill post-WWII and the explosion of the America’s middle class that followed to see the evidence that family wealth was not the predominant driver. Heck, there just weren’t that many upper middle class families in the U.S. prior to the late 1970’s, let alone truly wealth families. The Doughboys using the GI Bill didn’t get their nickname because they were rolling in it.

Unfortunately companion studies looking at this question during earlier times are proving rather difficult to find. In a right and just world I could go look at decade vs. decade analyses to see if my sense that the traditional notion of the American Dream (do well in school, do better in life) was indeed a real thing. We all know that such a scenario is the best possible one in that we could head off charges of bias, etc. While I will continue to search for such research, allow me to present a couple of examples of why I believe that there was a time when our traditional notion of the American Dream did, in fact, exist, when I think it may have “flipped”, and a hypothesis to explain why.

Absent formal data all we have are stories. One hopes that the stories you choose to tell are indicative of more than just one life’s experience. In this case clearly I feel this is true. My thesis starts where it should, at home, in the history of my own family. In my father’s story. Mind you, this is not only anecdotal, this is coming to you in the classic tradition of oral history passed down through inter-generational story telling. Is it all true? Meh, define “true”. It’s true enough for both our family and for the purpose of placing the American Dream along a timeline. Like most family history it is true in spirit, true in context. The details may just be a tiny bit fuzzy, especially now that all of the principals are gone.

My Dad was a classic child of the Depression, a “cardboard in the shoes” urban (as opposed to “Grapes of Wrath” rural) version. The children of the working poor (and certainly those of the unemployed) rarely got a new pair of shoes unless they’d drastically outgrown the pair they were wearing. If one should encounter the misfortune of a hole in the sole of the shoe one did not replace or resole the shoe, one simply put a piece of cardboard inside the shoe under the footbed. Of course this required a steady supply of cardboard outside of the Dust Bowl, since even the most trivial rain storm was enough to necessitate another “patch”.

Dad was the fourth of 6 children, smack in the middle of the family. I never knew my grandmother, Dad’s Mom. She passed away (we think from Rheumatic Fever) when Dad was around 12.  Some time soon after my grandfather remarried; Kay had at least 4 children of her own to add to the mix. While Grampa White was always employed there is pretty solid evidence that he struggled with the bottle. Payday always seemed a bit more spare than his income should have made it according to family lore; lots of temptation on the walk home. Still, even though it was often nothing more than a ketchup sandwich, none of the kids in the White house ever talked about being hungry.

This being the 30’s and 40’s the children of the working class were placed in the “trades track” in school, my Dad included. The oldest in the family, my Godfather Uncle Larry, graduated from Waltham High and went directly into the Army. He would be on a ship ready to participate in the invasion of Japan when the bombs landed. Going to college was never a consideration for him; not a single teacher was said to have even broached the subject. Dad’s twin older sisters were expected to learn the skills of running a household to prepare to marry and raise the next generation. They, too, gave not a moment’s thought to college.

But Dad was apparently different, talented enough to catch the attention of several teachers early in either high school or junior high. One teacher in particular, Miss Nolan, is said to have literally plucked him out of the trades track and demanded that he be placed in college prep. From what we know from stories told by aunts and uncles Dad thrived in class, and like my Uncle Larry he was a star athlete as well. Armed with his diploma and wearing a pair of new shoes purchased by Miss Nolan for graduation, Dad headed off to the University of New Hampshire on a football half scholarship.

Things get a little fuzzy here to be honest. The mythical version of what happens next goes like this: Dad did great in football, was holding his own in class, but a half scholarship didn’t provide enough support for a kid from a working poor background to pay for school, room and board. Legend has it that Dad essentially starved out of UNH and joined the Army rather than head back to Waltham with his tail between his legs, not able to make it as a college boy. My Mom tells a different story. In her version Dad simply partied his way out of New Hampshire, spending all of his post-football time drinking beer with his buddies.

I like the family lore version way better.

No matter, though. At least as far as proving my point about the American Dream. Dad entered the Army and went on to serve in the Korean Conflict. Battle time promotions come quickly during wars. When he mustered out after his 3 or 4 year hitch (the details on that are a bit fuzzy, too) he had risen from E1 (buck private) to E6 (Staff Sergeant). Now funded by the GI Bill and another half football scholarship he headed off the the University of Vermont to finish the challenge he’d started with Miss Nolan’s help. Those times were still pretty tough. In order to get enough to eat after football season’s training tables were no longer available Dad worked as a short order cook: two squares and a small wage per shift. As a junior and a senior he was the house manager at his fraternity. Pay? Room and board. Not one iota of wealth in his back story.

You know where this is heading. Mom and Dad were married after graduation and they moved to a tiny town in central Mass to begin life together. Dad and a bunch of buddies trucked themselves off to Springfield and American International College. They put themselves through business school. Yup. That’s right. Not only was Dad the only one in his blended family to graduate from college, he also had an MBA. I should note that college was such an unthinkable path for kids from working families that my Dad’s younger brother turned down a scholarship to Harvard despite my Dad’s pleas from Korea. My uncle died a bitter man, resentful of every college kid who joined the company where he worked and become his boss despite my uncle’s superior intellect.

So what happened to my Dad? Well, this is America in the 60’s and the 70’s. My Dad made it. He ended up buying the company he was running, employing at its peak 800 people and setting himself and Mom up to be comfortable even when the strong U.S. dollar of the late 80’s destroyed the entire domestic industry in which he worked. Forced out of the company he owned by an ambitious banker with only ~10% of his loan remaining Dad essentially retired at 58 after raising 4 college grads and sharing parts of his fortune with his siblings and their families.

What’s the point? Simple. It was academic achievement that brought my Dad his financial successes. His siblings lived lives that were slightly better than my Grandfather. My Dad soared. More than that, he was not unique. Not even a little bit. Thousands of working class kids rose to prominence and acquired wealth accessed by attending and excelling in college. Somewhere there is a WSJ article that cataloged the colleges attended by Fortune 500 CEO’s in the 90′ and 00’s. The number one Alma Mater was not Harvard or Yale, not Stanford or MIT, but Wisconsin. Indeed, if memory serves only a single digit percentage of those CEO’s had attended the playground colleges of the wealthy.

No, my Dad was typical of those who grew up during the Depression and went on to acquire wealth. Some how, some way they found themselves in college. This, not preexisting family wealth, was the more important factor driving financial success. Into the 1980’s at least wealth seems not to be the most important factor. It was time when a “cardboard in the shoes kid” could rise through academic achievement.

Next: Post-Baby Boom Academic Achievement in the South.

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