The very wealthy have been increasingly vilified, and there are legitimate concerns that the United States is heading towards being an oligarchy. An interesting part of the discussion of inequality suggests that the larger problem is the top 10% or top 20%, rather than the uber wealthy (the top 1% or so). Two authors who have written extensively on this topic, Matthew Stewart and Richard Reeves, characterize the top 10%-20% as striving professionals, for the most part, who are suppressing social mobility and increasing inequality in their pursuit of success for themselves and for their children.
Matthew Stewart, in his essay titled The 9.9 Percent is the New American Aristocracy, argues that while the top 0.1% control an incredibly disproportionate amount of wealth, the next 9.9% are far more influential because of the sheer size of this group. According to this article, the top 0.1% have 20% of the wealth in America, the next 9.9% have 60% of the wealth, and the bottom 90% has 20% of the wealth. Stewart characterizes the 9.9% as being comprised of those who believe in, and have benefitted from, the competitive meritocracy that has dominated the educational and professional world for the past five decades or so. The entire concept of the meritocracy, once viewed as encouraging social mobility, is increasingly seen as a way for the ‘haves’ to consolidate their advantages. The children of the 9.9% attend great schools, have a wide range of enrichment opportunities, and typically have considerable support in college admissions. Comparing the accomplishment of a high school senior from this type of household to one from a working class or poor household in college admissions is essentially guaranteed to perpetuate and increase inequality. This comparison may be based entirely on the merits of each student’s achievements, but the outcome is not a level playing field.
Richard Reeves discusses largely the same phenomenon in his book, Dream Hoarders, and related articles. Reeves focuses on the top 20% rather than the top 10%, but the main issues are the same. Reeves focuses on how upper middle class families shut down social mobility because they are trying to provide their children with every possible advantage. From legacy college admissions to using one’s social network to find an internship for a son or daughter, the children of the professional class enjoy substantial advantages in getting along and getting ahead. The critique of ‘opportunity hoarding‘ presents significant challenges.
Americans tend to admire those who work hard, build businesses, innovate, or otherwise become successful through their efforts. And, not surprisingly, people who are financially successful will commit great resources to helping their children to be successful. Can we expect that people will behave otherwise? This is the big hurdle in thinking about how to make opportunities more broadly available. I live in Boulder, Colorado, a town with very good public schools. Many teachers have advanced degrees and many of the students are coming from households with highly-educated parents. My wife and I chose to move (back) to Boulder once we had our daughter, largely because we saw this as a wonderful place to raise children. Because Boulder has good schools and many other attractive attributes, the cost of housing is high, thereby creating barriers for families with fewer resources. I struggle to reach conclusions about the best path forward in balancing parents’ desire to provide for their children and the broader societal need to encourage social mobility.
Geoff Considine on Finance and Economics 