The Other Side of Inequality

As we discussed last week in class, the creation of a new rich is not without its merits. USA Today is running an article today that notes how more and more Americans are affluent (income exceeding $250,000) for at least a year:

New research suggests that affluent Americans are more numerous than government data depict, encompassing 21% of working-age adults for at least a year by the time they turn 60. That proportion has more than doubled since 1979.

Predictably, this group is not emblematic of the US as a whole (as Murray notes). It tends to be older, whiter, and, more recently, has been hurt far less by the economic recession:

Sometimes referred to by marketers as the "mass affluent," the new rich make up roughly 25 million U.S. households and account for nearly 40% of total U.S. consumer spending. 

While paychecks shrank for most Americans after the 2007-2009 recession, theirs held steady or edged higher. In 2012, the top 20% of U.S. households took home a record 51% of the nation's income. The median income of this group is more than $150,000.

 

This affluence comes at a price. Most of the Americans who temporarily enter into the top 2% of earners quickly fall out of it. Nevertheless, they continue to remain in the top quintile of earners for the most part. Lastly, they tend to have a different conception of what state the US finds itself in:

In a country where poverty is at a record high, today's new rich are notable for their sense of economic fragility. They're reached the top 2%, only to fall below it, in many cases. That makes them much more fiscally conservative than other Americans, polling suggests, and less likely to support public programs, such as food stamps or early public education, to help the disadvantaged.

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The group is more liberal than lower-income groups on issues such as abortion and gay marriage, according to an analysis of General Social Survey data by the AP-NORC Center for Public Affairs Research. But when it comes to money, their views aren't so open. They're wary of any government role in closing the income gap. 

In Gallup polling in October, 60% of people making $90,000 or more said average Americans already had "plenty of opportunity" to get ahead. Among those making less than $48,000, the share was 48%.