How the "American Dream" is hurting workers

The "American Dream" goes something like this: A person is born in challenging circumstances such as a low-income neighborhood with limited education, opportunities, or support. But despite these obstacles, they "pull themselves up by their bootstraps" over time, overcoming adversity through sheer will.

They simply work harder and smarter, and life rewards them for their dedication.

However, five decades of data show each consecutive generation has found it harder to earn higher incomes than their parents, which has long been a marker of social mobility. Scientists tie this downward trend to stagnating wages and growing income inequality.

It turns out, this aspirational concept of merit-based upward mobility is becoming the exception, not the norm in American life. And according to organizational psychologists, work isn't always the ultimate equalizer. Workplaces — and the managers that run them — can actually exacerbate social inequities without intending to.

Hans van Dijk, a diversity and inclusion researcher at Tilburg University, says the "American Dream," however embedded in U.S. society, is a global phenomenon.

The major misconception people often hold is that "performance and getting ahead is under volitional control," van Dijk tells Inverse. Van Dijk co-authored a 2020 study on the topic in the journal Organizational Psychology Review.

"By dangling promotions and higher salary in front of people under the pretense of 'if you just work long and hard enough, this will be yours,' the illusion is created that everyone can make it," he explains. "In reality, there are, however, numerous factors that influence one's performance and career opportunities that are not under one's control."

These factors include subconscious biases, social connections, education, and external support, which can all play a role in swaying outcomes and snowball over time.

The pervasive belief that merit ultimately wins out is harming individuals’ and companies' success in subtle and obvious ways; data shows it threatens employee well-being and inhibits talent.

This week, Strategy explores how to minimize the subconscious biases holding back employees and the organizations they work for.

I'm Ali Pattillo and this is Strategy, a series packed with actionable tips to help you make the most out of your life, career, and finances.

The "cumulative advantage" — Sometimes, people consider organizations places where hard work and raw talent always reflect in achievement. However, studies suggest that instead of being pure meritocracies, workplaces tend to be "mirrors of society" where social inequality continues to persist, Van Dijk and his team write.

That's because, just like personal life, professional life can be dictated by cumulative advantages laid out in early careers.

Examples of initial advantages range from big to small — from a prestigious education to a presentation in front of leadership. These early opportunities and resources beget future ones. Over time, these differences stack up and form a chasm between the successful and less than successful workers due to initially arbitrary or chance differences.

Generally, because of the collective focus on outcomes, we tend to look at and compare people at the height of their careers, van Dijk explains, which causes us to overlook the groundwork underpinning later success.

"For a long time we keep telling others as well as ourselves that 'everything is still possible' until it isn't anymore, and then we conclude that perhaps we haven't done as much as we could or should have done," he adds. "But the basis for most people's success is laid much earlier.”

By believing that performance is always within personal control, individuals are blamed when they fail to "make it.”

"As a consequence, people who had less opportunities to start with are held responsible for not being able to get out of the circumstances they were born into, which further contributes to the segregation of society along various lines, including ethnicity, gender, ability, and belief," van Dijk says.

Often, the unequal advantages that one receives can be due to very mundane behaviors. From some extra praise in a big meeting to a small side project, these everyday occurrences are especially challenging to counteract because they're done without much conscious thought or intention.

"Such mundane occurrences and behaviors may seem negligible when considered in isolation but can create different paths or trajectories that over time lead to substantial differences," van Dijk says.

The cost of bias — Inequity in the workplace has far-reaching downstream effects. The first, van Dijk's research shows, is that bias inhibits talent and causes less competent people to get ahead instead of more talented people. In turn, those with more influence are more likely to make suboptimal decisions and mistakes.

"The relentless pursuit of eradicating bias may cost quite some time and effort, but I am convinced that it will result in much better outcomes because it will enable talent to thrive and the most competent persons to be most influential," van Dijk says.

For individual employees, unequal treatment is demotivating and dissatisfying. It can lead people to try to "game the system" and work the biases in their favor using harmful behaviors like gossiping, backstabbing, and coalition formation.

Building a better workplace — Companies should still strive to be meritocratic by rewarding high performers for their hard work or stellar results. But managers should think critically at the sometimes hidden factors that play a role in the final outcome.

The first step is recognizing the problem we're blind to.

"This is such a common misconception that we all collectively have bought into it and, therefore, do not see it anymore. Not seeing what is wrong prevents us from changing it," van Dijk says.

"So as long as workplaces do not understand and take into account the factors that influence people's performance beyond their own doing, they are likely to contribute to social inequality and promote cumulative advantage."

It's impossible to completely eliminate biases in weighing performance, but there are actionable steps to minimize them.

In the office, van Dijk suggests the following tactics to avoid inadvertently perpetuating unequal treatment:

1. Use 360-degree evaluations instead of manager-only feedback, which can hinge on personal relationships or first impressions.
2. Invest in everyone's talent instead of just the top tier performers.
3. Be fully transparent about promotion and development techniques.
4. Listen and adapt to employee feedback related to unequal treatment.
5. Commit to eradicating bias based on a person's demographics (such as gender, ethnicity, socio-economic status, sexual orientation etc.)

"A common theme here is a relentless pursuit of eradicating all biases that cause promotion not to be equitable," van Dijk says.

"Such a pursuit is never finished.”