The Economic Fallacy of Pulling Yourself Up by Your Bootstraps
In America, success is commonly attributed to hard work. When someone enjoys financial rewards or a stroke of luck, they are often praised for their intelligence, creativity or dedication. When someone is at the opposite end of the spectrum and dealing with bankruptcy, a looming foreclosure or unemployment, they are often told to “pull themselves up by their bootstraps.” This is part of the American Dream or the ideal that those who work hard can enjoy financial freedom. Unfortunately, that isn’t the reality for many Americans who certainly work hard but who still struggle financially.
The Horatio Alger/Log Cabin Narrative
One of the favored American narratives is known as a Horatio Alger tale, a classic rags to riches story. The author Horatio Alger, popular in the late 19th century, wrote dozens of stories where the protagonist came up from nothing, worked incredibly hard and was able to enjoy a life of luxury a few years down the road. While popular and certainly inspiring in the years leading up to the turn of the 20th century, these were fictitious and idealized narratives. Nonetheless, they have been integral in the maintenance of the American Dream or the belief that anyone who works hard enough can avoid the pitfalls of poverty and enjoy financial independence.
The same kind of narrative can be called the log cabin story, particularly in politics. Bill Clinton once famously said that every politician wants voters to believe they grew up in a log cabin and achieved success through their own work and merit. This characterization emphasizes both the Horatio Alger rags to riches idea and implies that the politician in question is a hardworking “everyman” who earned their status rather than a member of the elite class who fell into it.
Certain Demographics Routinely at a Disadvantage
While the rags to riches narratives aren’t inherently harmful, they do present a flawed version of success to Americans. The reality is that certain demographics are routinely at a financial disadvantage, regardless of their dedication, intelligence, creativity or hard work. Getting ahead in a troubled economy is no easy feat, and success often relies more on luck and connections than on hard work.
Some of the disadvantages that Americans might have to overcome include:
- Being a Woman – Although the pay gap is slowly closing, there is still a disparity between the average salaries between the sexes. Although women make up 47 percent of the labor market, the White House reports that women still only earn 78 percent of what a man might make in the same position.
- Being Born into a Poor Family – Home ownership levels are on the decline, and an increasing number of families across the country struggle to make it to the end of month. Children born into poor families start out with a disadvantage as it is harder to afford the better school options, and they may not receive the same amount of attention from parents who have to work constantly to make ends meet.
- Having a Major Health Problem – There are many Americans who want to seek out medical care but don’t because of the potential costs involved. Someone who works hard but takes times off for injury or deals with a major medical condition could have staggering bills to pay that set them further into debt.
Financial Options for a New American Economy
The New York Times reported that as many as 80 percent of Americans find it hard to save thanks to unexpected expenses. Medical bills, car emergencies or unemployment are all major setbacks that can impact a person’s financial stability. That’s why resources like the PersonalMoneyStore.com are increasingly popular in today’s economy. Payday loans and other short-term funding options often feel necessary, even when individuals make an effort to set aside emergency savings.
In today’s economy, the rags to riches narrative put forth by Horatio Alger, as well as the idea that pulling one’s self up by the bootstraps is the entire answer, is not always practical. To learn more about financing options for the real American economy, more resources can be found on the Personal Money Store finance blog.