The annual celebrations of Independence Day commemorate not only the sacrifices made during the American Revolution, but also a more nebulous concept: the American dream, which for many is bound up with the promise of economic success for any hardworking American. Yet the American dream is beginning to seem like a fantasy for even the most dedicated laborers. As a recent series in The New York Times detailed, growing economic and class disparities are having a disturbing effect on contemporary American society. The paper’s series, entitled Class Matters, focused on such problems as health care for the underclass, the persistent inability of immigrants to raise their economic prospects and the plight of relos, that is, corporate employees relocated by their corporations. By contrast, one article took aim at the spending habits of the super rich, describing such purchases as $12,000 mother-baby tennis bracelet sets. The overarching portrait was of a society where the haves are acquiring more and the have-nots even less than before. Indeed, the share of the nation’s income earned by the very wealthiest Americans has doubled since 1980 (to 7.4 percent in 2002), while the share of income earned by the bottom 90 percent has actually fallen.

How did we reach this point so quickly? As recently as a generation ago, a hardworking family could count on their children’s lives being at least as financially secure as their own. One could point to the tax cuts introduced by President Bush as a method by which the richer are able to become the super rich, and separate themselves even more, in gated communities and in other subtler ways, from hoi polloi.

But a combination of several factors has been at work over the last few decades. Corporations, for example, used to promise implicit lifetime employment in return for often harsh sacrifices made by entire families. Beginning in the 1980’s, however, facing pressures from overseas, corporations opted to lay off employees and outsource jobs to foreign and therefore cheaper locales, forcing many employees into a nomadic work life. Concurrently, many C.E.O.’s. sopped up the savings that attended the layoffs to enrich themselves, all the while touting the need to cut costs.

At the same time, the number of entry-level factory jobs, which had traditionally provided hope to immigrants, has diminished, thanks to low-cost alternatives overseas. This has condemned many recent immigrants to years of low-paying, dead-end jobs as well as longtime American citizens to penury. Barbara Ehrenreich’s plaintive book Nickel and Dimed: On (Not) Getting By in America demonstrated how the author was incapable of living on a minimum-wage job no matter how hard she worked.

The worsening economic divide is contrary to the most elemental themes in Catholic social teaching. The notions of solidarity and the common good, for example, recognize that human interdependency is not only necessary but positive. Moreover, there are important goals for society that reach beyond purely individualistic ones. In his encyclical Mater et Magistra, Blessed Pope John XXIII wrote that the economic prosperity of a nation is not so much its total assets in terms of wealth and property, as the equitable division and distribution of this wealth (No. 74). And in a society that prizes $12,000 mother-baby tennis bracelets while hardworking Americans cannot afford basic necessities, the achievement of the common good will remain elusive. This is one reason why a decent living wage is another important tenet of church teaching, as pointed out by Pope John Paul II in Laborem Exercens (No. 19).

This kind of world, so unjust, is also antithetical to Gospel values, particularly as described in Matthew 25. And we are responsible for the least of our brothers and sisters not simply in this country, but in the developing world as well.

What can we do? Repealing tax cuts that favor the super rich and raising the minimum wage would be a start. So would policies in corporations that put a cap on executive compensation. (Arguments that this would not provide adequate incentive have been disproven: corporate salaries of top-level executives are rarely based on performance.) So would introducing more courses in undergraduate and graduate business programs that foster an understanding of the common good. Though the United States is sometimes described as a classless society, some basic adjustments must be made if our country is not to degenerate into two classes: the have-everythings and the have-nothings.

This article appears in July 4 2005.