The Elite Is Not Who You Think It Is—It Might Be You
To most, the Occupy movement is best characterized by the slogan “We are the 99 percent.” Indeed, a year before Occupy sprang to life, the top 1 percent held roughly 35 percent of the nation’s wealth, while the bottom 50 percent held about 1 percent. But the data tell a more complex story, and the bifurcated way that we define “elite” may need adjustment.
As senior fellow at the Brookings Institution, Richard Reeves describes in his new book, Dream Hoarders, that while the top 1 percent overwhelmingly receives a disproportionate share of economic gains, the upper middle class is also "hoarding" resources. Families in the 80th to the 99th percentiles—or those earning at least $112,000—have made out pretty well over the past 35 years. Since 1980, incomes for the top 1 percent skyrocketed, and wages for those in the next 19 percent increased considerably. Comparably, the bottom 80 percent saw wages stagnate. Reeves details how the wage gains for the top 20 percent translate into access to better schools, better colleges, and, eventually, better jobs with higher wages.
Simply put, the privileged upper middle class is “hoarding” the benefits of economic growth for themselves and their kids.
Reeves is spot on—“class barriers” to enter either the rich or the upper middle class are on the rise. But there’s yet another complexity to consider in identifying the elite. What is glaringly missing from Dream Hoarders is an adequate discussion of race and the racially stratified American economy. When we are talking about the upper middle class, or the top 20 percent, we are in fact talking about a group that is overwhelmingly White.
Census data from 2015 demonstrate that just 5 percent of Black households have an annual income of $150,000 or more, compared to 12 percent of White households. In contrast, 22 percent of Black households earn less than $15,000 a year, which is double the 11 percent rate for White households. In terms of income trends, Blacks are the only racial group that actually saw a decline in their real income since 2000.
Disparities are worse when looking at wealth. The 2016 Survey of Consumer Finances indicates that Black households have median wealth of about $17,600 (inclusive of home equity), in contrast to $171,000 in median wealth for White households. And these disparities persist and even worsen factoring in education. Black families where the head of household has a college degree have less wealth than White families where the head of household dropped out of high school.
The racial wealth gap is an inheritance that predates the 35 years referenced by Reeves. It begins with chattel slavery, when Blacks literally served as capital assets for a White landowning plantation class. And America’s current regressive tax system hoards resources and underwrites dreams, as Reeves details, primarily for the top 20 percent.
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