Is the American Dream dead?

The American Dream lures people from all over the world, and it’s because of this possibility: If you come here and work hard, your kids will have a better life than you.

What if that weren’t true anymore?

Record debt, persistent joblessness, millions of underwater mortgages and a stock market that hasn’t gone anywhere in 10 years: For today’s kids who are entering the job market, it’s hardly a recipe for future success.

For parents who only want the best for their children, those prospects are like a wrenching pit in our stomachs. When such a central pillar of the American story is falling apart, frantic moms and dads hardly know what to think.

“My husband and I are terrified for our sons,” says Saideh Browne, a 40-year-old mom of two who heads up a speaker’s agency in New York City. “When they were born, we figured as long as we saved for college, they would be okay.

“But now, we can’t just tell them to go to school, get a good job, and retire at 65. We’ve had to rethink parenting, and it hasn’t been easy. We’re encouraging them to learn a trade, and hope it all works out before the economy tanks further.”

Browne is hardly alone in fretting about her children’s future. According to a new survey from Ipsos, sponsored by New York Life, only 41 percent of parents surveyed think that kids will have a better standard of living. It’s a major tectonic shift in our national belief system, but given the events of the past decade, it’s not that shocking.

“It’s part of a larger phenomenon, of a decline of faith in the American Dream,” says Anya Kamenetz, author of the books Generation Debt and DIY U. “Homeownership has taken a huge blow, people are questioning the value of a college education, and the idea that America will always be economically dominant is fading away. The assumption of an ever-increasing standard of living is no longer taken for granted.”

It isn’t just typical parental kvetching that’s driving those survey numbers; our fears are grounded in real-world data. According to recent figures from the Federal Reserve, household net worth declined by almost a quarter in just two years, fed by the Great Recession and the housing collapse.

For many parents, that roiling economy has led to some dramatic decisions. Pat Mitchell Worley is communications director at the Memphis Music Foundation, and to her, America’s economy isn’t just something theoretical: It’s affected her family in a highly personal way.

“My husband and I have elected not to have another child,” says Worley. “Our six-year-old is doing very well, and we’ve opted to get her involved with activities that will offer her capital in the future: Languages, arts, sports. We put away for her college fund, and encourage her interest in a multitude of things that may result in scholarship opportunities when she’s older.

“I often think about parents during the Great Depression, or other unstable times in history. We can only do the best we can, to prepare them for as much as possible.”

So what’s a worried parent to do? Of course individuals can’t shape macro issues like inflation or indebtedness. But on a personal level, parents can be proactive in giving their kids a leg up. The top four practices parents are adopting, according to the New York Life survey: Encouraging a well-paying career choice; talking openly about family finances; saving for their college education; and making sure their kids are taken care of, in case something happens to them.

An equally effective solution, though, may be for parents to rethink their expectations entirely. If you redefine the elements of success – beyond just salaries and the value of your portfolio – then the future doesn’t have to seem quite so dire.

There’s little doubt this is going to be the first generation to not do as well materially as their parents,” says Kamenetz. “And for my own kids, I don’t necessarily expect them to be highly successful according to the old models. But hopefully I’ll instill them with values that will make them happier.”

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