Richard Reeves is a senior fellow in economic studies at the Brookings Institution. His book, “Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It,” will be published early next year.
How easy it is for U.S. politicians! No matter what their party or ideology, they never have to think about which social class they “wake up every day to work for.” It’s always the middle class.
That’s just smart politics in a nation where the overwhelming majority has defined themselves in one way for a long time. Back in 1939, 88 percent adopted the middle-class label, according to Gallup poll. Today the number is 85 percent, the Pew Research Center reports.
This idea and ideal of a middle-class society makes sense when incomes are reasonably equal. Some people may be better off than others, but if most are broadly in the same economic boat, it makes sense for that boat to be the USS Middle Class. But growing income inequality has stretched the definition of middle class to the breaking point, especially toward the top.
Across the pond, British politicians tie themselves in linguistic knots trying to show that they are for ordinary people. Former Labour leader Ed Miliband was for the “squeezed middle class.” Tony Blair was for “hard-working families.” New Prime Minister Theresa May is for “just-managing families.” It’s a mess.
In America — where almost everyone is middle class — the distinctions that matter are within that broad category. So in its polling, Pew has to break down class categories into “lower,” “lower middle,” “middle,” “upper middle” and “upper.” It is true that the portion of the public identifying as just “middle” middle class shrank from 53 percent in 2008 to 44 percent in 2014, with a marked post-recession shift toward “lower middle class” and “lower class.” But only 1 in 10 will accept the label “lower class,” and just 1 or 2 percent ever admit to being “upper class.” America does not have a bourgeoisie: It is a bourgeoisie, at least in its own eyes.
It is important to remember that there has been no increase in income inequality for the bottom 80 percent of the U.S. population. All the inequality action is at the top, with the group who occupy the top rung of the ladder — who likely see themselves as just upper middle class — steadily separating from the majority. This separation is economic, visible in income and wealth trends. But the separation is seen through education, as college graduates see their incomes rise. It is visible on maps, with affluent households zoning themselves off in upscale enclaves. It shows up in studies of family life, as the upper middle class form stable marital unions and invest intensively in their children.
Inequality in America is not about the gap between the bottom and the middle. It is about the one between the top and everybody else. We are witnessing a dangerous separation of the upper middle class from the majority. The danger lies not just in the costs of inequality today, but in the perpetuation of class status across generations.
Yet politicians — even those on the political left — are reluctant to demand more from the upper middle class, typically restricting their attention to those at the very top, the much-vilified “1 percent.” But we can’t create a more equal society just on the back of the upper class. Nor should we, given that the economic gains of the past few years have been felt not just by the super-rich, but by a much broader swath at the top. The cry of “we are the 99 percent” simply obscures the inequalities opening up further down the distribution.
But Americans who see themselves as middle class are reluctant to make any sacrifices. And most people with household incomes stretching well into six figures see themselves as middle class, just like everybody else, even if they have to add the “upper” modifier. They might be persuaded that the rich should pay more taxes, but not that they might be rich themselves: Half of those making more than $100,000 a year think you need to be making at least half a million a year to count as “rich,” according to a Roper Center analysis of 2011 Gallup data.
Right now, even Americans who are rich by any reasonable standard fiercely resist any attempt to pay more. Exhibit A: the furious upper-middle-class reaction to President Obama’s attempt in 2014 to limit the value of 529 tax-favored savings plans, which overwhelming give benefits to those with higher incomes.
Members of the upper middle class are doing very well and should be asked to contribute a greater share to the common good. This requires them first to look in the mirror and see that they are not the victims of inequality, but the victors.