The “American Dream” is more relevant in Canada than the USA

In the USA, the American Dream is the promise to have it all and enjoy it all. It’s been glorified and sentimentalized as a utopian goal not just by the media and Hollywood stars, but also by businesses and politicians.

In addition, real estate agents, car sales people and vendors of luxury items have used the American dream in their pitch for many years.

Today, the American Dream is more of a marketing concept, whereby marketers and politicians have convinced people that they have to have a certain standard of living (such as a second home, a vacation in Europe, expensive jewelry and other ‘toys’) in order to be happy and fulfilled. (By taking on even higher amounts of personal debt, Americans are more stressed out and less optimistic and fulfilled than ever before despite their high standard of living.)

But in reality, the American Dream is becoming more and more like the ‘Impossible Dream.’ Today, many Americans believe that their odds of winning the lottery are better than attaining the American Dream.



I was watching Fareed Zakaria last Sunday on CNN and he discussed a study from four economists at Harvard and the University of California at Berkeley who released a path-breaking study of mobility within the United States. And the Journal of Economic Perspectives published a series of essays tackling the question from an international standpoint.

For more than a decade, it has been documented that Northern European countries do better at moving poor people up the ladder than the United States does. Some have dismissed these findings, pointing out that the United States cannot be compared with places such as Denmark, an ethnically homogeneous country of 5.5 million people.

But Miles Croak of the University of Ottawa points out in his contribution to the Journal of Economic Perspectives that Canada is a very useful point of comparison, being much like the United States. (The percentage of foreign-born Canadians is actually higher than the percentage of foreign-born Americans, for example.) And recent research finds that people in Canada and Australia have twice the economic mobility of Americans. (The British are about the same as Americans but much worse than Canadians and Australians.)

Now who would have thought that the “American Dream” is actually more relevant in Canada than the land of the free and the home of the brave?

What’s intriguing is that many of the factors that seem to explain the variation across countries also help explain the variation across the United States. The most important correlation in the Harvard-Berkeley study appears to be social capital. Cities with strong families, civic support groups and a community-service orientation do well on social and economic mobility. That’s why Salt Lake City — dominated by Mormons — has mobility levels that compare with Denmark’s. This would also explain why America in general fares badly; the United States has many more broken families, single parents and dysfunctional domestic arrangements than do Canada and Europe.

The other notable feature in the Harvard-Berkeley study is the design of cities. Places that are segregated — where the poor live far from the middle class — do much worse than those that are more mixed. This probably has to do with geography; it’s hard to get to jobs when they are far away. It also might mean that people in poor neighborhoods end up in a self-reinforcing cycle of under-funded schools, high crime and social breakdown. A related finding is that places with high African American populations show low mobility for the white population living there as well.

These factors, while important, might be difficult to change in any reasonable period of time. As Zakaria points out, social capital cannot be built in five years. Cities cannot be quickly redesigned to be integrated or create greater density. That leaves the last large factor in explaining the low mobility: public policy. And here, Croak explains, the United States is the great outlier. Simply put, the United States spends much less on the education and well-being of poor people, especially poor children, than any other rich country — and that retards their chances of escaping poverty.

The USA is one of only three rich countries that spends less on disadvantaged students than on other students — largely because education funding for elementary and secondary schools in the United States is tied to local property taxes. By definition, poor neighborhoods end up with badly funded schools. In general, the United States spends lots of money on education, but most of it is on college education or is otherwise directed toward those already advantaged in various ways.

The American Dream is a defining metaphor for the USA and a major contributor to their consumer culture. So unless things change in the coming years, the American dream and its implications for business and marketing will be a thing of the past and marketers will need to find other ways to sell their high valued products and services.

Now although we rarely if ever use the term the “Canadian Dream”, it remains to be seen if the American Dream now becomes the Canadian Dream but for now I need to stop dreaming and get back to work.

Here is a recent article in the NYT that makes a similar point

How the American dream became the Canadian dream

The New York Times today laments the erosion of the “American dream,” noting how it has moved north.

Columnist Nicholas Kristof’s piece – It’s now the Canadian dream – defines this as the quest for affluence and the opportunity to conquer issues such as social class.

“Yet today the American dream has derailed, partly because of growing inequality,” Mr. Kristof writes in today’s edition.

“Or maybe the American dream has just swapped citizenship, for now it is more likely to be found in Canada or Europe – and a central issue in this year’s political campaigns should be how to repatriate it.”

He refers to a recent study, in the same publication, that showed Canada’s middle class is now probably wealthier than its American counterpart, and, indeed, now ranks among the world’s richest.

“In fact, the discrepancy is arguably even greater,” Mr. Kristof writes.

“Canadians receive essentially free health care, while Americans pay for part of their health care costs with after-tax dollars.”

Among his other points:

  • Americans work an average 4.6 per cent more hours than their Canadian counterparts.
  • “Their children are less likely to die than ours.”
  • Canadians live longer, again on average, than Americans.
  • “American women are twice as likely to die as a result of pregnancy or childbirth.”

Mr. Kristof, of course, doesn’t live here, and his piece is more of a lament for America than a celebration of its northern neighbour.

So it’s worth remembering that economists indeed believe Canadians are faring better than their cousins, but that’s not because we’re doing so well. Income growth remains modest, and unemployment is still almost 7 per cent.

Still, Canadians in fact are far better off than many others in this post-crisis era, which is a cause for celebration.

Here is the article


Here is Scott Gilmore’s article

The American Dream has moved to Canada

By every measure, Canada is the true place to find ‘life, liberty and the pursuit of happiness.’ Let’s stop squandering our good fortune.

Scott Gilmore

February 28, 2017


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