Spotlight Exclusives

The Loss of Hope in Low-Income America

Carol Graham, Brookings Institution Carol Graham, Brookings Institution, posted on

America is one of the wealthiest countries in the world. Yet a number of markers suggest that our wealth is not translating into better lives for large segments of our society.

Perhaps the starkest of these indicators is that our mortality rate is now rising, a trend which is unique to the U.S. among wealthy countries. Poor health and preventable deaths (such as suicide, opioid overdose, and alcohol poisoning), primarily among uneducated whites, drive this trend. Mortality rates for blacks and Hispanics, in contrast, have continued to fall—narrowing the gap with whites.

These troubling trends in mortality seem closely correlated with other social indicators. My research with Sergio Pinto of the Brookings Institution shows that poor whites also have very little hope for the future on one hand, and high levels of stress, worry, and anger on the other, and that these patterns match those in mortality quite closely. What is going on?

For many years, Americans tolerated extremely high rates of inequality, as most of our society shared the belief that the U.S. was the land of opportunity, and that everyone who worked hard could get ahead. It was the Horatio Alger society, where individual effort was paramount and rewarded by financial success.

Yet that is no longer the case. The poor in the U.S. (who make up roughly 15 percent of the population) are less likely to believe that hard work will get them ahead than are the poor in Latin America, a region known for high levels of poverty and inequality. These findings may seem seems surprising, but a number of recent trends help explain the lack of hope among the American poor.

Notably, we’ve seen unprecedented increases in inequality in the U.S. in recent decades. In Latin America, in contrast, poverty has fallen markedly and some countries have shown progress in reducing inequality.

U.S. inequality is largely explained by the top of the income distribution pulling away from the rest—the rich getting richer. At the same time, incomes for lower and middle class Americans have stalled. Strikingly, 90 percent of children born in 1940 achieved higher incomes than their parents did, while only 50 percent of children born in 1980 did so.

The wealthy (including the upper echelon of the middle class) increasingly lead separate lives—their children go to different schools, different after school activities, and are disproportionately represented in elite colleges. The distant but visible lives of the very rich make success seem out of reach even for lower middle class households. At the same time, the traditional blue-collar middle class is hollowing out, due to technology driven economic change and the decline of manufacturing and other blue-collar jobs, particularly in the heartland.

Much of the above story is now well known. What is less so is the role of hope and its relation to behaviors. People who believe in their futures are more likely to invest in those futures (for instance going back to school to get a job credential or following good preventive health practices) and to have better outcomes. The hope channel is particularly important for individuals with less means, for whom making such investments requires greater trade-offs. If they do not believe these investments will pay off, then they are much less likely to make them.

The lost hope among poor and lower middle class whites in America, meanwhile, stands in contrast to much higher levels of optimism among poor Hispanics and blacks, with the gap being particularly large for blacks.

Pinto and I find that poor blacks are three times as likely to be higher up on a 0-10 point optimism scale than are poor whites, while poor Hispanics are about one and a half times as likely. Part of the explanation for this is the contrast between hard fought if gradual progress for minorities compared with fears of downward mobility among blue-collar whites. Part is expectations: while poor whites compare themselves to parents who were better off, most poor blacks and Hispanics compare themselves to parents who were worse off. Andrew Cherlin of Johns Hopkins University finds that believing that your parents lived better than you is associated with lower levels of life satisfaction and lower levels of trust in others.

Yet another part of the explanation is higher levels of resilience among minorities compared to whites. Blacks and Hispanics are less likely to report depression or to commit suicide in the face of negative shocks than are whites. And sociological research shows that family and religious ties tend to be stronger among Hispanics and blacks (respectively) than among whites.

We also find that place matters. Places that are more racially diverse, which tend to be urban and coastal, are happier and healthier and tend to be economically vibrant. Isolated, homogenous places in suburban and rural areas are less likely to have community and other associations, in part due to distance and climate, and in part due to economic decline. A recent study from Kei-Kawashima Ginsburg and Felicia Sullivan at Tufts University, for example, found that the majority of rural millennials were living in what they called civic desserts—devoid of political, community and other sorts of organizations. Broadband internet access is also more likely to be limited in these areas, contributing to isolation.

While this rise in hopelessness is a complex problem, there are some obvious places to start. Our safety nets, such as food stamps, tend to stigmatize recipients. A better approach may be to use these programs as tools for empowerment.

Latin America’s highly successful conditional cash transfer programs, for example, give poor families cash payments conditional on their sending their children to school and to the doctor—e.g. encouraging them to invest in their futures. And if we’re concerned about the rise in hopelessness, special focus should be paid to the 15 percent of prime age males that are out of the labor force, a group that is overlooked by much of the safety net and whose numbers are expected to rise in coming years.

Bottom up community solutions also have promise. Huntington, West Virginia, whose 30 percent poverty rate is the highest of any city in the nation, recently won an “America’s Best Community” award for its coordinated efforts in rebuilding blighted neighborhoods through infrastructure and education investments.

Finally, research points to other promising solutions, such as the potential for volunteering and other forms of community engagement to enhance well-being. Tracking civic involvement may also provide a valuable tool for identifying pockets of desperation and ill-being before irreversible drug addiction and suicidal behavior take hold.

The struggles we see among low-income Americans (particularly but not only poor whites) constitute a crisis that demands solutions. The stakes are high and the challenge is no less than rebuilding faith in the American Dream.

Carol Graham is the Leo Pasvolsky Senior Fellow at the Brookings Institution and College Park Professor at the University of Maryland. Her newly released book, “Happiness for All? Unequal Hopes and Lives in Pursuit of the American Dream,” was published by Princeton University Press.

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