How might educators save what is left of the American dream?
A key lesson I tried to convey when I took students on two-week immersion experiences to the Philippines: in the developing world, most families live on the edge of functional bankruptcy every day. While starvation is rare in the Philippines due to plentiful water and generally good soils, if a family has a medical emergency their only source of funds may be to sell the family water buffalo, their sole capital investment. And that’s it; their “tractor” is gone.
Now, writing in The Atlantic, author Neal Gabler shares that he is one of nearly half, an astonishing 47% of Americans, who could not find $400 for a needed emergency. Half of Americans are living day to day, no more financially secure than Filipino families living in block and bamboo huts on dirt plots making the equivalent of $2 per person per day.
Gabler offers up the numbers, an autopsy on the death of the American middle class, and traces the roots of the disease. In a broad sense, easy access to credit cards led to a radical drop in savings starting in the 1980’s, with many families feeling they were “saving” by watching their home value rise. They made all the wrong choices, continuing to fund consumerism predicated on everything being wonderful rather than the possibility that things might turn downward. When the Great Recession hit, many were caught with little in savings. Even then, some who still had income chose to continue “comfortable” consumption levels rather than cut back and add at least something to their savings.
Why do people make such wrong personal and national choices? Why do the last two generation save so much less than their parents did? Why do Americans insist on squandering wealth? How did we fall from the greatest creditor to the greatest debtor nation in less than a decade? Why do we keep electing politicians who continue to create conditions that are not in the long-term interest of the majority of Americans?
Graber offers a logical progression that leads back to at least one answer: a 2011 study “measuring knowledge of fundamental financial principles (compound interest, risk diversification, and the effects of inflation) found that 65 percent of Americans ages 25 to 65 were financial illiterates.”
What can educators do? Start teaching our teachers how to teach financial literacy, and make it part of the P-20 curriculum, not a month in a 9th grade Health and Wellness course, mixed in with good diet and safe sex, but an embedded part of project work starting around kindergarten. Build in financial literacy alongside language literacy and numeracy. The concepts are not all that hard; they are a heck of a lot easier to teach and learn than sentence structure or algebra: Don’t spend more than you earn. Save first and early. High interest debt kills. Go to college and study hard. Diversify investments.
There are always options to point the finger, blame the system, or wring our hands that things are not the way we want them to be. Or we can just do it. What if K-12 educators took the reigns instead of the back seat and shouted “we are going to save the American Dream! We are going to ensure that the next generation is financially literate.” It would not reverse the historical, environmental, social, and global factors that suggest that American financial comfort, based on a time when natural resources were vast and imperialism garnered more than our fair share of global wealth, are gone. American financial comfort has always been skewed, systemically less available (or functionally unavailable) to segments of the population based on race, ethnicity, or gender. There are incredible inequities that are beyond the control of individuals that won’t be solved by choosing to not buy $6 cups of coffee you can’t afford. But radically reducing financial illiteracy is within our control. We can solve for ignorance; that is what educators do! If we don’t, I don’t see how current mega trends of financial, environmental, and social ignorance are reversed in a time frame that solves the problems we collectively face.