The American dream has never been the rags-to-riches fable of the Horatio Alger stories. But there once was a real American dream, and it went like this: If you work hard, your income will rise consistently and will enable you and your family to have a decent life, a good life—even a secure life.

No more. For at least half of all Americans—those on the bottom rungs of the economic ladder—that dream has been dead for more than thirty years. Their household incomes have hardly risen since the glory decades after World War II. In many cases, their incomes…