How Does the American Dream Influence the US Economy?

According to the ideal of the American Dream, everyone deserves the opportunity to pursue happiness and economic prosperity, and the government should protect the right of every citizen to achieve their highest aspirations and goals. The notion of the American Dream was invented by the Founding Fathers of the United States and was initially captured by language in the Declaration of Independence.

The Founding Fathers united the 13 American colonies and led the war of independence from Britain. Later, they built the framework of government for the newly-independent colonies on republican principles. These republican principles, first conceived of by the earliest leaders of the U.S., still influence the U.S. economy because they protect a system of free enterprise, or a free market. A system wherein business activities are regulated through private measures and the market determines prices, products, and services, rather than the government, is said to encourage entrepreneurship and an open society.

For the Founding Fathers, the most prosperous country in the world would offer equal opportunity to everyone, regardless of their current social or economic standing. This has made the U.S. a destination for immigrants from around the world who want to be able to pursue a career outside of their family profession and escape any legal restrictions based on their religion, gender, or social status.

Immigrants Contribute Greatly to the U.S. Economy

Although U.S. citizens still face discrimination based on skin color, religion, sexual orientation, and gender, among other things, their right to pursue education and employment is protected by the U.S. Constitution. The U.S. has more immigrants than any other country in the world. In 2019, 44.9 million people living in the U.S. were born in another country. These immigrants have left an indelible mark on the country through their contributions in the areas of art, business, and culture.

According to a report by the Pew Research Center, 17% of the total civilian labor force were immigrants in 2017. Research from the Center on Budget and Policy Priorities reveals the extent that immigrants contribute to the U.S. economy. They make up more than a third of the workforce in some industries. Many immigrants are geographically mobile, which enables them to respond to worker shortages in local economies. Immigrants support the aging native-born population, increasing the number of workers as compared to retirees. They also bolster social security and medicare trust funds. In addition, children born to immigrant families are upwardly mobile, which is beneficial to the future U.S. economy overall.

Many of the millions of immigrants who have been drawn to the U.S. have left countries with crumbling political systems and brutal regimes where their choices and opportunity are limited. Not only have their contributions bolstered the economy, but at times they have helped to transform the American economy completely, especially in the case of the technology industry.

Innovation in the U.S. Economy

The strength of the U.S. economy is dependent on its ability to evolve in response to new technology. America’s reputation as a global leader in technology innovation is due in large part to a history of opening its borders to people from other countries. Google, Yahoo, eBay, Qualcomm, VMware, and Facebook, among others, were all cofounded by immigrants. In 2016, the National Foundation for American Policy released a report with findings that revealed that 44 out of 87 of America’s startup companies valued at $1 billion dollars or more were started by immigrants. They are also key members of management or product development in over 70 percent of those 87 companies. The research also found that among the billion-dollar startup companies, immigrant founders have created an average of 760 jobs per company in the United States.

Highly-valued private technology companies founded by immigrants include DoorDash, founded by Chinese immigrant Tony Xu; Slack, which was started by three immigrants, Canadian Stewart Butterfield, Russian Serguei Mourachov and British immigrant Cal Henderson; and Instacart, started by Indian immigrant Apoorva Mehta. Currently, some of the top valued publicly-held companies with immigrant founders are Google (Sergey Brin from Russia), NVIDIA (Jensen Huang from Taiwan), Qualcomm (Andrew Viterbi from Italy) and four of the founders of PayPal are first generation immigrants.

Without the streams of talented, ambitious people entering the U.S. every year because of the promise of opportunity, the U.S. would not be in a position of global dominance. In response to new policies that were introduced by Donald Trump’s administration that aimed to restrict the number of immigrants to the U.S., many economists and policymakers pointed out that immigrants are crucial for the nation’s future economic growth. Suketu Mehta, associate professor of journalism at New York University and the author of “This Land is Our Land: An Immigrant’s Manifesto,” said, “America has succeeded, and achieved its present position of global dominance because it has always been good at importing the talent it needs.”

The Dream of the Founding Fathers

The dream of the Founding Fathers of creating the most prosperous country in the world has come to fruition. Every person who lives in the U.S. has the right to improve their lives, which in turn increases their contributions to national economic growth. Since its beginning, the country has had vast quantities of land, an abundance of natural resources, and neighboring countries that have never threatened the expansion of the American economy. These conditions, and the promise of the American Dream, have attracted millions of people from all around the world who have ultimately given the U.S. economy its competitive advantage. A more homogenous population would not be able to operate at the same level of innovation.