- Paul Constant is a writer at Civic Ventures and co-host of the “Fork economy“Podcast.
- While a majority of Americans consider themselves to be middle class, he says far fewer actually are.
- The richest 10% strive for stability at the expense of everyone else, he argues.
Last year, RAND Company, a non-partisan think tank, published a breathtaking study which revealed that the richest Americans took some $ 50 trillion from the paychecks of the poorest 90% of working Americans over the past four decades.
It was a figure that highlighted the growing inequalities of the past half century. If you are a median American wage earner, you would have made over $ 1,000 more each month if inequality had simply remained constant from the 1970s to today.
These numbers are disastrous for the American middle class.
When most non-economists talk about the middle class, we’re not talking about the bare middle third of American household wealth.
The middle class in America meant the broad band of workers who felt economically stable in their day-to-day lives, and whose imagined upward economic mobility was within the reach of themselves or their children.
A 2015 Pew Report found that while 89% of all Americans identify as middle class, only 50% of Americans actually meet the broad economic definition of middle class.
Previously, most Americans believed in the American Dream, that if they worked hard and played by the rules, their children would have better lives than them.
Today, although 89% of Americans consider themselves to be middle class, more than two-thirds of Americans believe their children and grandchildren will live worse than them – a number that indicates that the very definition of what it means to be in the middle class is in jeopardy.
Where the middle class was once synonymous with security and opportunity, Americans now see this to mean they are barely clinging to stability and the foundations are crumbling beneath them.
In fact, if you delve deeper the RAND report numbers, you will see that while 90% of Americans have lost significant wealth over the past 40 years to a small portion of the richest 1%, the top decile of American wage earners – that is, those that are roughly in the 90 to 99.9 percentile – their pitch.
That 9.9% of all Americans just below the super rich oligarchs – less than one in 10 of us – enjoy the economic stability and ambitious upward mobility for their children that were once a hallmark of the American middle class.
In his latest book, “The 9.9%: The New Aristocracy That Is Ennching Inequality and Warping Our Culture,” Oxford University professor Matthew Stewart says this wealthy group of Americans are working hard to codify their culture. position in the economy making it more difficult for other groups to gain economic power.
The 9.9% “work hard enough to ensure that values in their own neighborhood remain high, which means they don’t allow new construction, they rule out a lot of potential development, and this effectively consolidates their position. geographic, ”said Stewart. on a 2018 episode of “Pitchfork Economics. “
“This is just one of the ways this elite group is starting to separate itself from the rest of society, but it is probably the most important,” he added.
It’s bad enough that you had to be exceptionally wealthy in America to achieve the same economic stability that the majority of the population enjoyed four decades ago.
But when this small group of economically stable households then try to make the system work for their own stability at the expense of everyone else, you end up with a yawning and unsustainable inequality gap that risks consuming the poorest Americans by bankruptcy, housing inequality and the million other disasters that can befall people in a society with a social safety net as thin as the one we have in America.
This type of consolidation is also the death knell for the economy as a whole. The 9.9% alone cannot muster the kind of consumer spending it takes to stimulate economic growth. Without an inclusive and achievable middle class to fuel the demand-driven U.S. economy, the nation will enter a negative feedback loop of lost jobs, closed businesses, and sluggish spending. The math just doesn’t add up.
Throughout the 20th century, a secure and growing middle class has been the source of America’s prosperity. By draining the middle class of wealth and consolidating that security to an increasingly small group of wealthy elites, America is hindering its capacity for economic growth.
Only by investing in a growing middle class and restoring the economic security of millions of working Americans can we rebuild lasting prosperity for everyone, even those at the top.