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In America, everyone thinks of themselves as middle-class.
September 29, 2010 9:40 AM   Subscribe

Americans have no idea how rich the rich are, nor how poor the poor are.
posted by Pope Guilty (237 comments total) 47 users marked this as a favorite

 
I have a hunch that Americans have no fucking idea how to read that chart, either.
posted by Wolfdog at 9:46 AM on September 29, 2010 [20 favorites]


Arguably a double..
posted by Perplexity at 9:49 AM on September 29, 2010


I have a hunch that Americans have no fucking idea how to read that chart, either.

The smaller the blue area, the more delusional the reported group.
posted by mph at 9:50 AM on September 29, 2010 [1 favorite]


This is a world destruction. Your life ain't nothing.
The human race is becoming a disgrace.
The rich get richer.
The poor are getting poorer.
posted by dersins at 9:58 AM on September 29, 2010 [6 favorites]


To me this feels not so much like Americans are clueless about economics (which is how it's being spun) as about statistics.

Not that either of those is good.

(disclaimer: I teach stat so I might be a bit biased.)
posted by madcaptenor at 9:59 AM on September 29, 2010


Every time I read something like this it reminds me of Chris Rock's take on wealth v. being rich.

The sad thing is that there are people in this country who vote based on the belief that one day they will be able to join that 1%.
posted by photoslob at 10:00 AM on September 29, 2010 [15 favorites]


The worst part is that Republican voters don't make the connection that fixing this one problem would reduce crime, drug abuse, and the cost of welfare and other social services - all issues they claim to care deeply about.
posted by rocket88 at 10:07 AM on September 29, 2010 [45 favorites]


the real problem is that when comparative wealth is discussed in this country, too many people are thinking, "well, it's about taking money from the rich and giving it to the others"

it's about control and power, not wealth - if only it could be framed that way more often in the media

of course, the right wing has no interest in seeing it framed that way and the left wing often doesn't see the importance of it
posted by pyramid termite at 10:07 AM on September 29, 2010 [9 favorites]


Photoslob: yes, that's the American Dream, innit!

Seems like in reality the only viable route of class mobility is to somehow become a celebrity, and thus, Reality TV shows.
posted by zoogleplex at 10:09 AM on September 29, 2010


Meanwhile, while the income gap between rich and poor is at an all-time high in America, strikes and protests against austerity measures are being held today by workers across Europe, and Iceland is taking its ex-PM to court over possible negligence during the financial crisis.
posted by existential hobo at 10:12 AM on September 29, 2010 [5 favorites]


I work at a software company that also has an office in India. Two of our Indian workers, who presumably have much lower salaries than I do in absolute terms, are currently visiting our office here in California. We were talking about cooking at home, and it turns out none of our Indian employees actually do this. They all hire personal chefs to come to their homes several times a day and cook for them from scratch. They can get 3 meals per day homecooked for about $50/month.

It makes you think about what "wealth" actually implies. I might make three times as much as these people if you look at it simply as a comparison of salaries, but I can't afford the sort of luxuries here that they can afford in India, because no chef in California is going to cook me 90 meals for $150.

And I've been to our India office as well, and I know some of the things these people are missing compared to what I have here in California. As a rich Indian who still has to go to work, you may have luxuries like personal chefs, but you still have to commute past slums through barely-maintained roads to get to work.

It makes it hard to decide what counts as wealthy, or even among the fairly wealthy (software engineers in California or India) to come up with wealth rankings that are cut and dried. Granted, the original article is only talking about Americans, where costs of living are probably easier to compare.

Still, although I know I make more than most people in the world, it's difficult to place myself in a spectrum accurately, because I see a lot more middle and upper-middle class Americans than I see poor people living in Indian slums. How am I to know which groups are larger around the world or even in the United States without someone else telling me?
posted by tylerkaraszewski at 10:13 AM on September 29, 2010 [35 favorites]


Photoslob: yes, that's the American Dream, innit!

I have it on good authority that The American Dream consists of eight-track stereo, TV in every room and can snot a half a piece of dope every day.
posted by mmrtnt at 10:14 AM on September 29, 2010 [1 favorite]


snort! (dammit)
posted by mmrtnt at 10:14 AM on September 29, 2010


it's about control and power, not wealth

I'm curious how you think these things are at all separate.
posted by paradoxflow at 10:15 AM on September 29, 2010 [3 favorites]


I'm becoming more and more convinced that American class, race and politics all pretty much come down to people who think they're entitled and people who don't.
posted by l33tpolicywonk at 10:17 AM on September 29, 2010 [10 favorites]


What struck me about that chart, and he doesn't really even mention, is that the bottom 40% own so little that they do not even appear on the chart, at the scale it's presented. That is a disgrace. I mean, the whole thing is a disgrace, but Jesus. That's an Ancient-Rome-level disgrace.
posted by rusty at 10:20 AM on September 29, 2010 [27 favorites]


Even Republicans harbor a secret desire to turn America into Sweden!!!
posted by kozad at 10:21 AM on September 29, 2010 [8 favorites]


"I'm curious how you think these things are at all separate."

They are not, but a lot of Americans don't seem to act as if they know they aren't.

Why else do we get people who make less than median income vociferously supporting and voting for policies that move money from them to the not just the top quintile, but the top 2%?
posted by zoogleplex at 10:23 AM on September 29, 2010 [1 favorite]


We're Number one!!
posted by Postroad at 10:24 AM on September 29, 2010


tylerkaraszewski: Yeah, the behavior of the rich in America started seeming more comprehensible to me when I realized that they're angling for something like the rebirth of that sort of servant economy.

Money is made of people. it's people.
posted by You Can't Tip a Buick at 10:24 AM on September 29, 2010 [7 favorites]


The thing that really knocked me out about that chart was that literally everyone thinks that income should be distributed more evenly--significantly more evenly.
From the PDF:
Americans exhibit a general disconnect between their attitudes towards economic inequality and their self-interest and public policy preferences (Bartels, 2005; Fong, 2001), suggesting that even given increased awareness of the gap between ideal and actual wealth distributions, Americans may remain unlikely to advocate for policies that would narrow this gap.

I would like to see how much of the population is represented by each of those quintiles.

Also, it was weird today because I was thinking about that chart and what it means all morning, and kind of came to the conclusion that this must be part of why the economy is so stagnant. I keep reading about the tax break debate and how the wealthy don't spend in the same way as the lower classes at all, so the choice of who gets the tax breaks is very relevant. And then Robert Reich came on Fresh Air and said exactly that.
posted by heatvision at 10:25 AM on September 29, 2010 [4 favorites]


heatvision: Exactly! This chart totally explains the stagnant economy. Half of all US citizens have literally nothing to spend. They are economically missing. We have an economy for 300 million people with only 150 million participating. We're like a town where half of the houses are boarded up.
posted by rusty at 10:29 AM on September 29, 2010 [21 favorites]


To me this feels not so much like Americans are clueless about economics (which is how it's being spun) as about statistics.

That was my reaction as well.
posted by dfan at 10:29 AM on September 29, 2010


I blame it all on Vistorian-era English fiction where Americans all think they're the rich elites in those stories when in reality the average American is a couple rungs below Heathcliff on the social ladder.
posted by GuyZero at 10:31 AM on September 29, 2010 [7 favorites]


Half of all US citizens have literally nothing to spend. They are economically missing. We have an economy for 300 million people with only 150 million participating. We're like a town where half of the houses are boarded up.

I don't find this that surprising.

What I do find surprising is those 150 million people aren't trying to burn the fucking country to the ground and decapitating the other 150 million.
posted by GuyZero at 10:33 AM on September 29, 2010 [45 favorites]


I own a very small business. My main type of employee is a low income, unskilled employee. For the most part, these employees come from very poor families and don't move up the ladder with each generation. They do not make much money, do not last long in the industry, and most end up unemployed, in jail, or on some form of government assistance later in life.

I try to help the ones I can, giving what little financial advice I have, setting up retirement accounts for those who can spare some change, but most don't listen. They live week to week and day to day. Sometimes, I have to loan them money for medicine that their kid needs or to pay the electricity. They are, for lack of a better term, the poor.

And yet, there is this imagined group that is below them, sucking the life from this country. The group below them is poorer and dirtier, and there are tons of them they think. That group is why they're poor. I don't argue, not only because it would cause resentment towards me and my position, but how do you tell someone to look up because there's no one below.
posted by Tavern at 10:35 AM on September 29, 2010 [92 favorites]


One of the effects of this set of facts is that you don't actually have to earn all that much to be considered "rich."

The income quintiles really aren't all that spread out. Sure, if you're making $160,000 you're making more than 95% of the population. But the richest 1% of the population--and you only need to earn a little more than $250,000 to be in the top 1% of incomes in the US--own 43% of non-housing assets. That means that the 2d-20th percentile control about 50% of non-housing assets. This is significant, because housing assets almost universally do not represent current income, i.e. they're part of your net worth but they won't feed you. So yeah, just under 20% of the population controls about 50% of the wealth, but that means that on average they've only got two or three times their share per capita. That isn't all that far out from most people's estimates of what a reasonably equitable distribution ought to look like.

Even worse, most of those assets are going to be tied up in retirement accounts like 401(k)s and IRAs. So the fact that they've got a couple of hundred grand socked away is nice, but it doesn't actually do anything for them right now and won't for decades. They can't really use it, and it doesn't really have any effect on their lifestyle.

The standard MeFite response to this is something along the lines of "poor little rich boy" or "I'm living on $20k, wanna trade places?" but neither of those attitudes indicates any real understanding of the situation of others. These people are still living off their salaries, i.e. they're just as sensitive to taxes, income shocks, and unemployment as anyone else is. Sure, they can afford to send their kids to private school, but for the vast majority of "the rich," that income represents their wages, not some passive source of income derived from ownership of assets. Taxes eat into their monthly budgets for things like their mortgage, car payment, and utility bills, just like everyone else.

Now the truly rich, on the other hand, the 1% which controls 43% of non-housing assets, don't have to work for a living. The 2d-20th percentile owns two or three times their per capita share of non-housing assets, but these bastards own forty times their share. So regardless of what their current income might be, they've got assets which enable them to live without having to get and keep a job. This means they're sitting on a bare minimum of $1-2 million, probably closer to $5 million.

But here's the thing: it's almost impossible to make that kind of money by getting a normal job. I mean, I'm a lawyer, but I only earn about $60k, and even my colleagues in law school who got jobs at big firms are only making $160k to start. A lot of money, to be sure, but even if they're really frugal it's going to take them a decade to save their first million. But they're going to want to send their kids to college, an increasingly expensive proposition, and they'll buy a house at some point, and health care ain't getting cheaper. So that first million might take closer to fifteen or twenty years. Sure, it's a lot of money, but it's far from the massively disproportionate accumulation of sheer excess that you'd need to really, truly, tip the wealth distribution curve.

So I think the problem here isn't that the doctors and lawyers and junior executives of the country are making too much money. They may be upper middle class, but they're still middle class. They're all earning their keep, and most of them, while comfortable, can't afford to miss a paycheck or see their monthly income reduced any more than someone earning $8.50 an hour at Wal-Mart. No, the people who are really screwing with the income curve are celebrities, professional athletes, investment bankers (Goldman Sachs can and should burn in hell), and the very, very top tier of corporate executives. Those people are truly rich, and that's where the real income inequality exists. The cardiologist making $500,000 does indeed make ten times what your typical college grad makes, but your high-end CEO makes ten times that, and Tom Brady is going to make no less than $72 million over the next four years. Probably closer to $100 million once you figure in the endorsement deals.

So lay off "the rich" unless you're talking about people like that.
posted by valkyryn at 10:35 AM on September 29, 2010 [48 favorites]


How do we start educating people about this? The people reading Slate, by and large, aren't the ones who need to know this. They're the people who are already voting more in line with the take away message. How do we reach the people who are voting against their interests? It seems fairly obvious that merely becoming totally aware of the real nature of the society we're living in could seriously shift major voting blocks. How do we do that? What can I do, today and next week, that will make a difference?
posted by stoneweaver at 10:35 AM on September 29, 2010 [2 favorites]


Well aren't 140 million out of the 150 million with money also being screwed by the top 10 million?
posted by zoogleplex at 10:35 AM on September 29, 2010


To me this feels not so much like Americans are clueless about economics (which is how it's being spun) as about statistics.

if you think americans can't be clueless about both, you are mis-underestimating americans.
posted by eustatic at 10:35 AM on September 29, 2010 [3 favorites]


Yeah, the behavior of the rich in America started seeming more comprehensible to me when I realized that they're angling for something like the rebirth of that sort of servant economy.

Tom Geoghegan has a bit about this in The Secret Lives of Citizens:
I ran into a man, Eli, several years ago on the streets of Chicago. He's a lawyer and he told me how he knew a vice president at Montgomery Ward: "'Eli,' he said to me, 'Why do you think we rich people hated FDR? Because he raised taxes...? Pfftz! No, because after FDR you couldn't get any help! Before FDR, you gave your maid like a dress, but after FDR there was the minimum wage! And before FDR, if you wanted your kid to go to Harvard, go, but after FDR, there was a middle class and they had to take all these tests!'"
posted by enn at 10:36 AM on September 29, 2010 [17 favorites]


We have an economy for 300 million people with only 150 million participating. We're like a town where half of the houses are boarded up.

Oh, come now. The reason only half the people in the country are considered part of the labor force is because of the age structure of the population. There are about 60 million people under 14 and 40 million people over 65. That's 100 million right there. So sure, there are 50 million people between those ages not working, but filter out people under 20, most of whom are in school full time, and make some allowance for two parent families with one working parent, and you come pretty close to the 150 million number you're looking for.
posted by valkyryn at 10:39 AM on September 29, 2010 [2 favorites]


Sure, they can afford to send their kids to private school, but for the vast majority of "the rich," that income represents their wages, not some passive source of income derived from ownership of assets.

You mean assets like being born into a family that gives you more than a 1 in 100 chance of getting a post-secondary education?
posted by paradoxflow at 10:42 AM on September 29, 2010 [2 favorites]


Yeah, I'm mixing up quintiles of wealth and % of population. Does anyone have any comprehensible source for how many people are members of each of these quintiles? I'm having a hard time finding that.
posted by rusty at 10:42 AM on September 29, 2010


One of the things this article brings to my mind is also one of my current major complaints about the tax code. Right now the tax code is also massively slanted to benefit the wealthy over all others. Income taxes have marginal rates around 36%, but taxes on sources of wealth like the capital gains tax are only 15%, so if you are a relatively well-off wage earner, like a doctor or a lawyer, you pay a large portion of your income in taxes. But, if your income comes from earnings from your investments (which is almost exclusively how the wealthy live), then you pay less than half of what wage earners make. This seems incredibly unfair to me.
posted by bove at 10:43 AM on September 29, 2010 [21 favorites]


You mean assets like being born into a family that gives you more than a 1 in 100 chance of getting a post-secondary education?

The article was about money, and that's what I was talking about. You want to talk about something else, go right ahead, but the snark really isn't necessary.
posted by valkyryn at 10:45 AM on September 29, 2010


valkyryn, the upper middle class may be sensitive to income and price shocks, but they're not sensitive in the same way someone making $8.50 or $6 an hour is. What's the worst that can happen? They can stop sending their kids to private school, or fire the nanny or the maid. The person making $8.50 an hour will be living in their car eating Taco Bell for every meal. Trying to lump the "upper middle class" in with regular working folk is vastly disingenuous and betrays either intellectual dishonesty or never having been poor. I've lived both lives. And you know what, sure, the upper middle class have monthly budgets. But when it gets really rough, they absolutely can dip into their 401(k) or whatever other investments they have. Sure, they may get penalized, but their kids aren't going to eat peanut butter for the next year so they don't lose the house.
posted by stoneweaver at 10:45 AM on September 29, 2010 [55 favorites]


So lay off "the rich" unless you're talking about people like that.

People whose income is over a hundred thousand dollars and who can't make ends meet on it are choosing to live lifestyles which cost a lot of money. What you are asking us to do is to feel sympathy for people who refuse to live within their means, or who feel entitled to lifestyles which are beyond their means.

When poor people do this, people look down on them. When the wealthy do it, we are exhorted to extend our sympathy.

Fuck that, fuck them, and fuck anyone who has the slightest sympathy for rich people who think they're entitled to be super-rich.
posted by Pope Guilty at 10:46 AM on September 29, 2010 [83 favorites]


Yeah, I'm mixing up quintiles of wealth and % of population.

I think you're misunderstanding what's going on. They take the population, divide it into five equal chunks--quintiles--ranked by amount of assets. There is exactly 20% of the population in each quintile, by definition.
posted by valkyryn at 10:46 AM on September 29, 2010


Fuck that, fuck them, and fuck anyone who has the slightest sympathy for rich people who think they're entitled to be super-rich.

Oh, get off it. An income over $100k gross is a real income of about $60k net. This hardly counts as super-rich. Do your freaking homework before you get all pissy.
posted by valkyryn at 10:47 AM on September 29, 2010 [7 favorites]


Some more graphs and comments. Also quotes John Scalzi's New Rule For the Internets:
1. If you make a six-figure income, you are not allowed to argue on the Internets that you are poor.

2. You are not allowed to argue that you feel poor, which as we all know is just like being poor.

3. You are not allowed to posit the argument that if you hang around with people who make more than you, then you are allowed to have your wee little heart sing the Poverty Song because, after all, you make less than all of them and your life is sad...
posted by TheophileEscargot at 10:47 AM on September 29, 2010 [32 favorites]


valkyryn: Ok then. I wasn't sure if they were dividing income (or wealth) ranges into five equal chunks or dividing the population. Thanks.
posted by rusty at 10:52 AM on September 29, 2010


The article was about money

No, the article is about economic disparity, and if you don't think environmental factors contribute to a person's economic outcome, then it's time to put away the "I earn my 60K from the sweat of my brow!" rhetoric, and examine all that stuff you're carrying around in your invisible backpack.

These people are still living off their salaries, i.e. they're just as sensitive to taxes, income shocks, and unemployment as anyone else is.

No.
posted by paradoxflow at 10:53 AM on September 29, 2010 [6 favorites]


So how do you define rich?
I was once told that a gentleman was someone who lived on the income from his income.
Think about that one a bit.
At income 5%; to gain 1,000,000 per year you need 400,000,000 to keep growing your wealth.
posted by adamvasco at 10:55 AM on September 29, 2010


Oh, get off it. An income over $100k gross is a real income of about $60k net. This hardly counts as super-rich. Do your freaking homework before you get all pissy.

You do not get to pretend you are poor. And shit, man, look at this:

my colleagues in law school who got jobs at big firms are only making $160k to start. A lot of money, to be sure, but even if they're really frugal it's going to take them a decade to save their first million. But they're going to want to send their kids to college, an increasingly expensive proposition, and they'll buy a house at some point, and health care ain't getting cheaper. So that first million might take closer to fifteen or twenty years.

How fucked up as a person do you have to be to type that and think that it will excite even the slightest sympathy in anyone whose head hasn't been fucked up by money? A million in a decade? In twenty years? That is fabulous wealth beyond the reach of any but a tiny minority. The idea that somehow we're supposed to say "Oh, it'll take twenty years to accumulate a million dollars in savings? I guess that person isn't really all that rich then!" is ridiculous. If you have fifty thousand dollars- an amount of money equal to the median income in this country- that you can sock away in your bank account every year, you are fabulously wealthy.

That we live in a culture which pretends that being able to throw the median income into storage each year and still live comfortably is somehow the norm, or not substantially outside the norm, doesn't make it so; it simply shows that we live in a sick culture which creates sick people.
posted by Pope Guilty at 10:56 AM on September 29, 2010 [90 favorites]


They're all earning their keep, and most of them, while comfortable, can't afford to miss a paycheck or see their monthly income reduced any more than someone earning $8.50 an hour at Wal-Mart.

Do you really think that's true? If you can't afford to miss a few paychecks at $150K/yr, you're an idiot. For one thing, there's no excuse not to have a couple months living expenses saved up. For another, you're looking at some seriously flexible spending at that income level.

It's trivial for me, as a member of an upper-quintile household, to borrow money from somewhere if I absolutely have to. I've also got a full salary's worth of expenses I could cut *immediately*. If my wife or I lose a job we can cut $2000/month in childcare, an easy $200/mo in bills, probably $500/mo in fancy food, etc. It would sting, but we wouldn't miss a mortgage payment, need to sell any of our expensive toys or take other drastic measures.

Families living on a couple of < $10/hr jobs, though? I don't have a reference point for what that's like, but I'm pretty sure losing a job is a MAJOR emergency at that income level.
posted by pjaust at 10:57 AM on September 29, 2010 [22 favorites]


the upper middle class may be sensitive to income and price shocks, but they're not sensitive in the same way someone making $8.50 or $6 an hour is. What's the worst that can happen? They can stop sending their kids to private school, or fire the nanny or the maid.

See, that's not precisely true. The worst that can happen is that they have to file for bankruptcy because they can't meet their obligations. And you have to get way beyond $100k, even probably $200k, before most people can realistically start talking about hiring domestic help. And pulling your kids out of school isn't the same kind of decision as not going out to eat quite as often. It isn't the kids' fault their parents are having money troubles, but all of a sudden it's okay to penalize them just because their parents had the misfortune to attract Pope Guilty's ire? Besides, most of them are just buying the stuff that poor people would buy if they had the money. Sure, exotic vacations and jumbo McMansions are hard to justify. But even those aside, life is expensive, and kids even more so. We're talking about people who, by and large, are trying as hard as they possibly can to make sure that their kids do have the advantages their position at birth would suggest.

Even beyond that, cutting back is hard to do, and not just psychologically or egotistically. You can't just decide to stop paying your mortgage because your taxes went up. You can't instantly reduce your utility payments or car payments or whatever else either. Takes time. Enough time to cause a serious liquidity crisis. And for people who are really just living paycheck to paycheck--maybe they've got enough cash to avoid monthly liquidity problems, but usually no more than that--it takes just one or two major unplanned expenses to really get into a hard spot.

And sure, maybe they can tap into their 401(k), but most people don't really have retirement savings, even well into the top 20% of incomes.
posted by valkyryn at 10:58 AM on September 29, 2010 [3 favorites]


"But here's the thing: it's almost impossible to make that kind of money by getting a normal job."

Yes. Entrepreneurial efforts are a large part of wealth creation in America. When I look at the Forbes 400, I don't see professionals by and large, i.e. normal jobs. Most of the truly wealthy seem to be people who have made their money from taking risks of some sort, mostly entrepreneurial, and have been rewarded tremendously. I won't argue whether this is fair or not, or right or wrong. I don't know how far down the Forbes List before you get to someone who is wealthy from an income from a job.

For example, look at the top 20 wealthiest in America (according to the Forbes 400), it comes from a handful of successful entrepreneurial ventures: Microsoft, Walmart, Berkshire Hathaway, Bloomberg, Google, Amazon. Those 6 ventures alone created 12 of the top 20.

My personal take is that none of those entrepreneurial ventures were a sure thing. I mean, a five and dime? (Walmart) Selling books online? (who reads books anymore?) Another search engine when we already have Alta Vista and Yahoo? (Google) They all could have gone under and some other entrepreneur would be on that list instead. It's only in hindsight that they appear destined to be huge. Someone passed up investments in all of them at some point because they looked risky.

Which is why the American Dream is such a strong cognitive bias: it seems to be true for a handful of people, so I hope it will be true for me too.
posted by acheekymonkey at 11:00 AM on September 29, 2010 [5 favorites]


valkyryn: So lay off "the rich" unless you're talking about people like [Tom Brady et al].

I'm not all that interested in criticizing the rich, but it appears that 60% of Americans (including me, for one) would lose nothing if we just burned the whole place to the ground right now and started over. Surely even the moderately rich can see that that is not in their interest?

Historically, when wealth is distributed that unequally, it's only a matter of time before there's a revolution, whether it's a nationalist / fascist one or a communist one. But essentially someone charismatic enough to gain the ear of the disproportionately massive disenfranchised underclass comes along and proposes an extremist form of wealth redistribution. And that has not, so far, gone very well anywhere but (arguably) Cuba. And in Cuba it sure as hell didn't go well for you if you were rich, or even clinging to the margins of the upper middle class.

So we could argue about how rich the "rich" are, but the way it looks is pretty much that if you have any wealth at all, you should probably be supporting a pretty major push to distribute some of it peacefully down the ladder, before it gets distributed for you at gunpoint.
posted by rusty at 11:01 AM on September 29, 2010 [16 favorites]


valkyryn: Oh, get off it. An income over $100k gross is a real income of about $60k net. This hardly counts as super-rich.
Not super rich no, but rich for sure. $60k is the US average *before tax* household income. $100k is well into the 90th percentile.
Why do people in the US insist on calling themselves "middle class" when they're way above the middle?
posted by Popular Ethics at 11:02 AM on September 29, 2010 [15 favorites]


And pulling your kids out of private school isn't the same kind of decision as not going out to eat quite as often.

FTFY, and yes it is EXACTLY the same kind of decision.
posted by paradoxflow at 11:02 AM on September 29, 2010 [4 favorites]


Money is made of people. it's people.

Soylent Greenbacks?
posted by mazola at 11:03 AM on September 29, 2010 [12 favorites]


"The person making $8.50 an hour will be living in their car eating Taco Bell for every meal."

No, he won't. Taco Bell, maybe, once every two weeks. Hot dogs, canned beans, occasionally canned chili. The Little Caesars down the street has a $5 large pepperoni that will serve as two or three meals. Peanut butter sandwiches, no jelly, on cheap wheat bread found on sale. 12 pack of Safeway soda for $1.99 each, if you buy three of them. Cheap store brand cereal that comes in a large-ish plastic sack, for $3.19. Half a gallon of milk for $1.49 if you know where to find it. Four quarts of 2% for 50 cents each the other day "priced to move" but doesn't expire till Oct 4. Ham sandwiches, you get a loaf of "artisan" sourdough bread for $1.49, makes four enormous sandwiches, cheap ham. Iceberg lettuce is only a buck.
posted by Xoebe at 11:04 AM on September 29, 2010 [22 favorites]


How do we start educating people about this? The people reading Slate, by and large, aren't the ones who need to know this. They're the people who are already voting more in line with the take away message. How do we reach the people who are voting against their interests?

Sadly, I think it would take a left-wing Rush Limbaugh and a left-wing FOX. The people voting against their interests are obviously not moved by facts and figures, but by rhetoric and hate-mongering. It wouldn't be that hard to demonize the rich instead of the immigrants. You just create an Air America but instead of trying to be somewhat reasonable, just push hate hate hate the rich all day every day. The rich are stealing your money. The rich are destroying your jobs. The rich are dodging taxes. The rich are raping the environment. It's totally doable. It's just that the kind of people who would be up for that job tend to be the kind of people who idolize the rich and despise the poor. The kind of people who care about the poor are also the kind of people who oppose rabble-rousing.

But maybe you could just pay off the guys on the right. Would Limbaugh refuse $100 million to start carrying water for the left? Would Beck and Coulter and Hannity? That would be a fun experiment.

The right but much harder way to do it, of course, would be to genuinely prioritize education and create a generation of people habituated to critical thinking. Good luck with that one. I'm starting to lose hope.
posted by callmejay at 11:06 AM on September 29, 2010 [14 favorites]


Let's also not forget that it's not just about income, but about where you're coming from and who you are. Making $30K/yr as a single 20 year old is different than making $30K/yr as a 45 year old with kids. Making $30K/yr with rich parents to help you in an emergency is different than making $30K/yr with poor parents. Making $30K/yr in a job below your ultimate earning potential is different from $30K/yr in a job you lucked into (ie, a Harvard grad losing a $30K/yr job could find another job in a week of looking if they needed to, but a guy with a high school degree would be SOL).

It'd go a long way towards easing this tension if the relatively rich could more easily admit how damn lucky they are.
posted by pjaust at 11:06 AM on September 29, 2010 [17 favorites]


You do not get to pretend you are poor.

I am not pretending that I am poor, I am claiming that despite my above average income that I remain solidly middle class, i.e. in a position where I am not in immediate financial hardship but remain far from financially secure. All I can possibly conclude is that you are either deliberately and disingenuously misreading me or so blinded by your spitting hatred for people with money that you've completely missed the point.

FFS, the only way you can possibly justify your position is to hold as a verified axiom that it is completely immoral to live as if you made more than that, that any expenditure not available to the poorest person in the country is unjustified and immoral excess. This is just unreasonable and I cannot for the life of me understand why you might believe this.

Well as someone who does live on less than that, lemme tell you, money is tight. Is it so tight that I'm worried about how I'm going to make rent this month or where I'm going to get my next meal? No, and for that I am eternally grateful. But my net worth is currently in the negative six figures, and I don't see that turning positive until I'm fifty or so, should I be so lucky.

Get off my case, dammit.
posted by valkyryn at 11:06 AM on September 29, 2010 [6 favorites]


A million in a decade? In twenty years?

I'm a relatively well-paid technology professional, and it would take me, I estimate, about 400 years to save a million dollars. Just for a data point.

The very idea of a million in savings is well outside of the scope of imagination, for most people. And by most, I mean 9 out of 10 Americans.
posted by rusty at 11:09 AM on September 29, 2010 [4 favorites]


Not to gang up valkyryn, but I'm in the same boat. My net worth just went positive for the first time last year. Net worth is a poor indicator of wealth. As far as your comfort is concerned, access to credit is nearly as good as savings (as long as you maintain positive cash flow). It's no good to complain to a homeless person that you owe $200k in student loans when you've turned that loan into a $100k/year salary.
posted by Popular Ethics at 11:11 AM on September 29, 2010 [2 favorites]


Maybe it's time we start talking class war.

You can never be too rich or too lined up against the wall.
posted by Astro Zombie at 11:15 AM on September 29, 2010 [17 favorites]


American class, race and politics all pretty much come down to people who think they're entitled and people who don't.

Substitute "elect" for "entitled" and you're even warmer.

Having people bringing in $80k net arguing relative wealth with people bringing in $35k is just another corner of the ideological smokescreen that gets people on $35k to vote for billionaires' tax cuts on the off-chance that they might one day benefit. It's two bald men arguing over a comb.

Historically, when wealth is distributed that unequally, it's only a matter of time before there's a revolution

Historically, the US has been fairly well insulated from those revolutionary moments.
posted by holgate at 11:20 AM on September 29, 2010 [5 favorites]


I'd like to propose some guidelines for determining how rich or poor you are.

If you can pay cash for everything you need or want, anytime you need or want it, you're rich.

If you can pay cash for everything you need, but must incur debt for some of the things you want, you are upper middle class.

If you can pay cash for what most of what you need, but must incur debt for the more expensive things you need and most or all of the things you want, you are middle class, providing you can pay off that debt by the time you retire.

If you can't pay cash for everything you need and must incur debt that you can't pay off by retirement (or know you'll never retire) just to get by, you are lower class.

If you can't get credit, are forced to pay cash for everything and can't afford everything you really need, you are poor.

Alternately, you could just posit that if you have to incur any debt at all to have the lifestyle you think you're entitled to, you're not rich.
posted by zoogleplex at 11:21 AM on September 29, 2010 [18 favorites]


I really like zoogleplex's approach, but I'd have to ask whether housing is included in incurring debt, because that would exclude the vast, vast majority of Americans from being considered "rich" under this definition. I'm not opposed to that in principle, but I'm willing to argue that housing is kind of an exception to "things you need or want," because everyone needs it, but even most people I would consider upper middle class can't actually buy even a modest house in cash.
posted by valkyryn at 11:26 AM on September 29, 2010 [1 favorite]


Alternately, you could just posit that if you have to incur any debt at all to have the lifestyle you think you're entitled to, you're not rich.
That's a very high bar for "rich", given that the things you "want" are arbitrarily expensive.

This isn't just arguing over scraps. I truly believe the culture of "I'm still middle class" is hurting the US. No one at any level seems to be willing to accept that they are privileged, and therefore no one feels they have to contribute anything towards the tax burden.
posted by Popular Ethics at 11:27 AM on September 29, 2010 [12 favorites]


Net worth is a poor indicator of wealth.

Why's that? I would have thought they were exactly the same thing. Income may be a poor indicator of wealth, but net worth is wealth.
posted by valkyryn at 11:28 AM on September 29, 2010 [2 favorites]


I'm curious how you think these things are at all separate.

i don't - but unfortunately, these things are often presented as if they are, especially by the right wing
posted by pyramid termite at 11:29 AM on September 29, 2010


If you can pay cash for everything you need or want, anytime you need or want it, you're rich.

I very much doubt that this would apply to somebody as highly-leveraged as, say, Donald Trump. If the prospect of calling in your loans to someone scares the shit out of you, it still makes that someone rich.

Though it shows how difficult it is to have a conversation about wealth and class when the common terminology is so tenuous.
posted by holgate at 11:30 AM on September 29, 2010


Some more graphs and comments. Also quotes John Scalzi's New Rule For the Internets:

Ugh, gross, in that 3rd figure on the 1st link you can literally see the "parasites" living on the hump of the US. Ewf.
posted by peppito at 11:30 AM on September 29, 2010


No one at any level seems to be willing to accept that they are privileged, and therefore no one feels they have to contribute anything towards the tax burden.

Conversely, Pope Guilty, and you if you agree with him, would define "privilege" down to the point that anyone who makes north of the national median would be considered "privileged." If everyone is special, no one is.
posted by valkyryn at 11:30 AM on September 29, 2010 [1 favorite]


It's two bald men arguing over a comb.

Campion: " With some paper, that would make a fine kazoo"

Lugg: "Classic case of wurkers Alienation. Rich or poor cant see no alienation about it."
posted by clavdivs at 11:32 AM on September 29, 2010 [1 favorite]


Apparently the godly snail should have posted rule 4 as well:

4. You are not allowed to use your own poor money management skills as evidence of how challenging life is for those, like you, with six-figure incomes.
posted by garlic at 11:36 AM on September 29, 2010 [11 favorites]


Yes, valkyryn, housing is included in incurring debt.

There's a lot of house-poor people in the US, especially now. Even at 5% mortgage rates, over 30 years actually pay almost twice as much for the house as the selling pice via interest, insurance and property taxes.

Home equity can be considered part of wealth, but if you can't spend it, you're not rich.

Rich people pay cash for houses, and you don't need to buy housing.

Holgate: I feel pretty confident that Trump has enough liquid, ready cash that even if his highly leveraged real estate empire collapsed, he'd be able to live at or close to his current lifestyle. If that's not true, then he's not actually rich IMO. He's just another poseur, fronting that he has real money.
posted by zoogleplex at 11:37 AM on September 29, 2010 [1 favorite]


Argh. You actually pay, and price. Left the Bluetooth kbd in the office.
posted by zoogleplex at 11:38 AM on September 29, 2010


I've seen this kind of disconnect within my own extended family. On one side I have people living at the poverty line, on the other, I had an uncle with a house in the Hamptons. The side with money knew that they were wealthy, but didn't consider themselves rich, because down the road there was a family with a far larger house. And the poor side didn't consider themselves as such because they could still afford to buy beer and keep their Harleys running.

I think about this a lot when I consider my own place, because I'm comfortable, and I see people in far more need than myself.

But then, I'm also not living in a house in the Hamptons.
posted by quin at 11:40 AM on September 29, 2010 [2 favorites]


I don't get all this arguing about what point exactly on the salary scale makes you not middle class. It's missing the point- the truly wealthy are living off of income generated by investments, and they are not in any way dependent on a paycheck of any sort. Furthermore, the income generated by investments is taxed at a much lower rate than income from a paycheck. So the trust fund baby living off of $200K per year in investment income is taxed at 15%. Such a trust fund baby likely does not have student loans, and may well not have a mortgage or rent to pay. Compare that to a professional couple whose combined income is $200K, except their income is taxed at 28%. Add to that student loans and the cost of housing, and the difference between a trust fund baby living off of $200K and a working couple earning $200K is significant.

Is the couple earning $200K more comfortable than someone making $8.50/hour? Absolutely. Yes, it's more money, and it can provide a nicer lifestyle. Are they lucky? Yes. But they are still nowhere near rich. To be blunt, if you are depending on a paycheck to cover your living expenses, you aren't rich. No matter what the size of your paycheck. The top .01% of incomes have quite successfully managed to obfuscate just how obscenely wealthy they truly are by hiding behind the skirts of people who make professional salaries that sound large to people making average salaries, and raising the cry of "class warfare!" at policies that would benefit 98% of the country.

When the people making $30K or $60K start arguing that people making $200K are "relatively rich," the people making twenty million dollars a year have won.
posted by ambrosia at 11:41 AM on September 29, 2010 [26 favorites]


The wealthy are not going to change their minds and decide that they maybe don't need quite so much money. The all-time-high wealth disparity in this country is not just going to fix itself. Wealth will continue to accrue disproportionately to the wealthiest and tens of millions of others will suffer until we stop that from happening. Revolutions happen because the wealthy and powerful think they can fuck everyone else indefinitely, and they are always wrong.
posted by clockzero at 11:41 AM on September 29, 2010 [9 favorites]


I very much doubt that this would apply to somebody as highly-leveraged as, say, Donald Trump.

Leverage is debt, which is an obligation, not wealth. If you pay for it, it's debt, if it pays you, it's wealth.
posted by acheekymonkey at 11:42 AM on September 29, 2010 [2 favorites]


Oh by the way, the incomes that qualify as poverty levels strike me as being extremely low. If the qualifying incomes were a little higher, life with those incomes would still be a damned tough row to hoe... and the poverty rates would be higher.
posted by ambient2 at 11:43 AM on September 29, 2010


No, ambrosia, the people making twenty million fucking dollars a year have already won and require no help in "winning" from the oh so unjust observations of the working classes that wealthy people are wealthy.
posted by clockzero at 11:44 AM on September 29, 2010 [1 favorite]


Historically, the US has been fairly well insulated from those revolutionary moments.

Possibly just lucky.
posted by rusty at 11:45 AM on September 29, 2010 [2 favorites]


While zoogleplex's guidelines are a fun though exercise, they're a bugger to implement as standards of economic well-being. The problem for many is that with more money, there are more viable options in life. I was reading through the list and thought, "I'm doing pretty well for myself. I've never had a credit card, and I've only overdrafted my account a few times in college when I wasn't watching what I spent. I buy things I like, but I don't really feel the need for a lot of things. I travel a bit, and I enjoy myself. But wait, I have wanted a proper DJ set-up for a while, and I haven't bought it because it's expensive, and I don't travel as much as I'd like to. So I guess I'm somewhere in the middle class."

But what if I landed a sweet job that paid me twice what I make now? I buy those turntables and that mixer, and I start splurging on records. I take more lavish trips because I can, traveling by air more than car and traveling farther. But now my housing situation and my vehicle are shrinking compared to my music collection, and I've really wanted to live somewhere for a while, just enjoying the place and not thinking about returning to work in a week. But I don't make enough to live like that yet, so I'm in the upper middle class.

By luck, I get millions in a lawsuit settlement over a faulty product, and I got a huge raise! I buy a big house, buy music like it was candy, and have a huge SUV to haul my music collection with me for my entertainment. I travel first class, but I can't yet buy a personal jet. Damn, I'm not rich yet.

That personal jet, the extravagant expenditures on trivial indulgences, they were never in the world I imagined at the beginning of this story, but I was content with my place in the world. And thus, the moral of the story is: mo' money, mo' problems.
posted by filthy light thief at 11:46 AM on September 29, 2010 [3 favorites]


valkyryn Net worth is a poor indicator of wealth.
Why's that? I would have thought they were exactly the same thing. Income may be a poor indicator of wealth, but net worth is wealth.


I would argue the opposite. Income defines how you can live each day - what clothes you can buy, what food you can eat and importantly, how much debt you can service comfortably. Even if your four bedroom house has put you $500k in the hole, you still get a nice big house to live in. Whereas a single mom may have a $0 or slightly positive net worth, but she can only afford a sketchy bachelor apartment for her family.

If everyone is special, no one is.
You don't have to be "extra special" to be privileged. You just have to be doing well enough that you can shoulder a bigger portion of the social burden. More so the super-rich of course.
posted by Popular Ethics at 11:47 AM on September 29, 2010 [3 favorites]


Conversely, Pope Guilty, and you if you agree with him, would define "privilege" down to the point that anyone who makes north of the national median would be considered "privileged." If everyone is special, no one is.

You are swinging wildly, blinded by rage, at a target that isn't there. I'm over here. If you want to address my points, please feel free. Your inane raging at some kind of soviet strawman is entertaining but not productive.
posted by Pope Guilty at 11:49 AM on September 29, 2010 [4 favorites]


I've been in graduate school for the past 6 years, making about $17K a year on a stipend. I took out about $3K a year or so in loans in order to get me up to the level where I was living extremely comfortably.

Sure, it was in the middle of Iowa, and I didn't have a car. I lived in the 7th floor of a high rise building with an awesome balcony, and it took me 5 minutes to get to my office. I ate out whenever I wanted. I got drinks with friends whenever I wanted. I had some credit card debt to be sure, but nothing overwhelming. I was making much more than the monthly payments each month.

I certainly wasn't "rich" by whatever standards people are throwing around here, but I sure as hell wasn't poor. I lived how I wanted to live without fear of not getting what I wanted when I wanted it. My tastes may not be as extravagant as others', but I was doing just fine.

On $20K a year. I was definitely not poor.

I understand that $20K a year for someone with a spouse and children is different, but as a single guy in his 20s in good health in Ames, Iowa, I certainly felt pretty rich.
posted by King Bee at 11:49 AM on September 29, 2010 [2 favorites]


the incomes that qualify as poverty levels strike me as being extremely low.

Holy crap! My wife and I make more than 5 times the poverty level for a two-person, no-child household. But we have so much debt that we essentially break even every month (we don't go without the things we need, but old loans suck up the bulk of what we make over the necessities) Where does that put me? I've thought middle class, maybe even bordering on upper middle class.
posted by grubi at 11:49 AM on September 29, 2010


Vaklyrn sez "And pulling your kids out of school isn't the same kind of decision as not going out to eat quite as often. It isn't the kids' fault their parents are having money troubles, but all of a sudden it's okay to penalize them just because their parents had the misfortune to attract Pope Guilty's ire? "

---
Ah, I see, I see. So. Public school is a penalty? It's just not fair to send them to regular ol' plain school... Punishment to have to go to school with the masses. No private school = private hell! Ah yes, yes. I see, completely.
posted by symbioid at 11:53 AM on September 29, 2010 [17 favorites]


Flt: your scenario would mean that you're experiencing "scope creep."

As long as you can pay cash for all that fun along with your bills, healthcare and savings, you're doing fine.

There are a lot of hypotheticals in your scenario. What do you think are the actual odds of any of that happening to any American?

This is where understanding statistics is important, and why many call the lottery a stupidity tax.

King Bee: location is everything. Try doing that in New York or San Francisco. Also, try doing that when you're 40 and you have 3 kids.
posted by zoogleplex at 11:54 AM on September 29, 2010


I actually think valkyryn's point is great. I'll take it further: we're in a pretty shitty situation where a lawyer making $60k isn't solidly middle class. I'm sure there's going to be a hundred people explaining how they raised 5 kids in grad school on $12k and gumption, but let's do the math.

Assume our lawyer is receiving no help from family on school, housing, etc. Assume they live outside of crazy expensive parts of the country. Let's also assume they have $50k in undergrad and law school debts (low, but let's be conservative here). That's only $3,880.52 a month. Only? $600 goes to student loans, $1200 to housing. You're down to $2080. Subtract another $125 for car insurance and you're down to $1955. Another $50 a week in gas and you're down to $1755. Let's figure another $100 in savings for a car (again this is probably low if you figure a used budget car every 5 years) and another $200 a month for television, internet and cell phone. Figure another $10 day for lunch / misc expenses and you're saving about $35 a day.

So that's $35 for retirement, emergency funds, down payment, anything else you want beyond relatively frugal living.

Now let's compare this to Dan Hesse, the CEO of Sprint, a middling telecom company that's in last place. He made $12mill a year. That's $32,876 a day and I would say average pay for a CEO of a company that large. I also bet a lot of his living expenses are paid for by the company.

I realize the tendency here is to get all grar, but even if you replace an associate lawyer with someone making $500,000 you're still being absolutely dwarfed by Dan Hesse's pay. This is the real problem. Of course I could have told you $25,000 a day or $15,000 a day and it would have still been so remote for all of us, those without a mathematical inclination would have put in the bracket of "way beyond me" when the difference presented in daily pay is $10k.

And get this ... Dan Hesse didn't even really hit the jack pot. Due to the power law distribution of money, he's a country lawyer compared to people like Zuckberger who apparently netted around a $1bil this year.

There's a lot of money out there and it's all going to an ever decreasing number of people.
posted by geoff. at 11:55 AM on September 29, 2010 [15 favorites]


If you want to address my points, please feel free. Your inane raging at some kind of soviet strawman is entertaining but not productive.

Oh, FFS. "Fuck that, fuck them, and fuck anyone who has the slightest sympathy for rich people who think they're entitled to be super-rich." does not count as a point. Who's raging now?
posted by valkyryn at 11:56 AM on September 29, 2010 [1 favorite]


And if you think not going to a private school is punishment, how about getting good schooling at all, because your school district is deprived of funds because upper-middle/wealthy people whine about tax cuts so they can keep sending their kids to private school while the rest are told to choke and suck it. And that it's *their* fault for being so poor.


Christ, what an asshole.
posted by symbioid at 11:56 AM on September 29, 2010 [12 favorites]


valkyryn: People don't need houses, just a place to live. If they can buy a house outright then they're rich. If they can afford to pay cash for an apartment, but choose to incur debt for a house, then they're upper middle class.

That seems to fit, right? Maybe not by the time you get to middle class on the list. Hm.
posted by ODiV at 11:56 AM on September 29, 2010


Whoops. Had an old page loaded.
posted by ODiV at 11:57 AM on September 29, 2010


Ah, I see, I see. So. Public school is a penalty?

No, but drastically reordering a child's life is. Changing schools is a big deal, and one that parents rightly agonize over.
posted by valkyryn at 11:57 AM on September 29, 2010 [4 favorites]


Trump has enough liquid, ready cash that even if his highly leveraged real estate empire collapsed, he'd be able to live at or close to his current lifestyle. If that's not true, then he's not actually rich IMO. He's just another poseur, fronting that he has real money.

well not the best apple vs. orange but...

Leveraged Titan runs bowlling alley

posted by clavdivs at 11:57 AM on September 29, 2010


Now the truly rich, on the other hand, the 1% which controls 43% of non-housing assets, don't have to work for a living. The 2d-20th percentile owns two or three times their per capita share of non-housing assets, but these bastards own forty times their share. So regardless of what their current income might be, they've got assets which enable them to live without having to get and keep a job. This means they're sitting on a bare minimum of $1-2 million, probably closer to $5 million.

That top 1 percent is the very hungry caterpillar, they started eating at the bottom of the leaf and are now moving their way up. so, watch out you upper quintile professionals, prepare to get downsized eaten for lunch.
posted by ennui.bz at 11:58 AM on September 29, 2010 [2 favorites]


If you can pay cash for everything you need or want, anytime you need or want it, you're rich.

Again, the focus on cash flow. Being rich is not about cash flow. It's about assets. There are even rich people that have poor cash flow because they have non-income generating assets (think of all those poor Dukes in Victorian novels trying to marry into new money so they can fix the roof on their gigantic manor).

Rich people have vast assets and can generally live off the income generated by these assets in perpetuity.

Having an income of $1M or more annually does not make you rich (although this is a semantic debate to some extent). Earning $1M in income from rent, dividends and capitol gains while lying in bed for a year makes you rich.

That's the beauty of the middle class. They have incomes but are generally devoid of assets. It's easy for people to get into the middle class from poverty - just get a decent job. Getting rich is a whole other matter and generally requires the creation of equity in a business that's growing. That's the usual route.
posted by GuyZero at 12:01 PM on September 29, 2010 [5 favorites]


Grubi, how long would it take you to pay off that debt? Can you even pay it off, by rearranging your finances?

If you can't come up with math at your present income level that pays off all that debt in say, 30 years, you're like many Americans - you look middle class, but you're trapped in that debt and if your income drops, you're screwed. That's what I mean by house-poor, but I suppose debt-poor is an appropriate term since a lot of people are trapped like this without buying a house.

I'm sorry to be harsh and I feel for your situation; you got duped like most everyone else.
posted by zoogleplex at 12:02 PM on September 29, 2010


Also - I do want to apologize for the personal attack, valkryn... It was a bit harsh, even if I disagree with you on this matter.
posted by symbioid at 12:02 PM on September 29, 2010


acheekymonkey: "For example, look at the top 20 wealthiest in America (according to the Forbes 400), it comes from a handful of successful entrepreneurial ventures:"

You realize that none of the Waltons on that list founded Walmart, right? And that the Koches inherited the business from their father? For every great fortunes made in America, one is also handed down. Sure, Warren Buffet is donating his wealth to the Gates foundation, but there's 398 other people on the list.
posted by pwnguin at 12:03 PM on September 29, 2010 [7 favorites]


One of the things this article brings to my mind is also one of my current major complaints about the tax code. Right now the tax code is also massively slanted to benefit the wealthy over all others. ... This seems incredibly unfair to me.

Our Indefensible Tax System

Sadly, I think it would take a left-wing Rush Limbaugh and a left-wing FOX.

That seems contradictory to the purposes of commercial media.

I'm a relatively well-paid technology professional, and it would take me, I estimate, about 400 years to save a million dollars. Just for a data point.

Math. 400 years = 4800 months. Without any return on your savings (interest), you'd need to save $208 per month. That doesn't seem that hard. If you are a "well-paid technology professional," I'm guessing you take home ... $4,000/mo? $3,000? $5,000? Regardless, it should be possible to save 5% of your take-home pay.

I am a not-so-well paid technology "professional," and I can imagine a million dollars in savings. My father is a retired teacher and my mother did not have a college degree. They were probably close to a million dollars in savings (pre-2007 or whenever the market died). My wife and I both put more than 10% of our monthly take-home income into a general savings account.

We're not near $1,000 per month yet, but I think we could probably save that much if we (more specifically my wife, lol (she makes more than me)) were more frugal. At an APR of 5% (yeah right), compounded annually, $1,000 per month would take us 33 years (by my back-handed Excel math) to make $1,000,000.

Not very tangible, but within the scope of my imagination.

posted by mrgrimm at 12:04 PM on September 29, 2010 [1 favorite]


Also - I do want to apologize for the personal attack, valkryn

No worries.
posted by valkyryn at 12:04 PM on September 29, 2010


all of you are missing the point of valkryn's post: the bottom 95% of the pay scale have more common interests than the top 20%. The problem is that the real-politik of american society is that the top 20% have been rewarded since Reagan for voting against the remnants of American social democracy. Yuppies weren't born, they were made with the express purpose of dividing the middle class politically.

The thing is that until those professionals making $250,000 realize that increasing their taxes i.e. reducing their net income substantially to build better schools and general infrastructure is in their interest, rather than pretending they can live like the top 1%, the politics can only get increasingly vicious.

The genius of the conservative movement in the U.S. is that while pushing policy that created the overpaid professional class they can turn around and attack those yuppies through the 'values' voters. Sarah Palin represent nothing if not class warfare from the right wing.
posted by ennui.bz at 12:05 PM on September 29, 2010 [18 favorites]


The worst part is that Republican voters don't make the connection that fixing this one problem would reduce crime, drug abuse, and the cost of welfare and other social services - all issues they claim to care deeply about.

rocket88, you've hit on an issue that always bugs me.

DERAIL FOLLOWS!

What is the purpose of sentencing? To exact revenge? To safely isolate dangerous elements from civilized society? To reform?

Ideally, the latter two, IMO. But to many people, sentencing = punishment, pure and simple. They aren't really interested in knowing to what degree punishment (sentencing) actually inihibits crime. In their world view, the more hideous the punishment, the more effective... at something.

But, of course, study after study shows that more "humanitarian" punishments, such as work training while in prison, free education, and so on, are far more effective than harsh sentencing (whether harsh because of long sentences, or harsh conditions). And, invariably, longer sentencing = much higher (direct, irrefutable) costs to the taxpayers.

--

Republican strategists know that most people aren't interested in looking at such a nuanced reality. They know people like revenge. They aim for that common, lowest denominator in their motivational ads.

But it costs us billions, directly (prison costs) and indirectly (increased recidivism over more statistically effective measures).

I'm not really all that interested in the "humanity" or "cruelty" of one punishment system over another. I oppose the death sentence for only two reasons: its demonstrated high rate of usage on innocent, misconvicted people, and its much-higher cost to this country (USA) versus life sentencing.

Same with "tougher" drug/violence/sex-offender sentencing guidelines & laws. I don't really care what happens to the criminals, as long as punishment of the innocent is minimized, and recidivism can be demonstrably improved. Longer sentences don't do it. Neither does harsher sentencing. (And, in case someone missed it, "Just kill them all & let God sort them out!" fails the "don't punish the innocent" test.)

DERAIL OVER!

So, would less economic disparity decrease crime rates? AFAIK, the data strongly suggests "Yes." Therefore, despite any lotto-ticket chance of me becoming a zillionaire, my ideal world incorporates a flatter economic distribution. Not flat - I believe in the power of wealth accumulation to motivate capital production and public works (Rockefeller Foundation, Bill & Melinda Gates Foundation, etc.). But flatter than we (Americans) have. We're certainly headed in the wrong direction, on the selfish basis of "How safe am I walking the streets at night, or leaving my home unguarded while I'm at work?"

That is all.
posted by IAmBroom at 12:05 PM on September 29, 2010 [4 favorites]


geoff.: we're in a pretty shitty situation where a lawyer making $60k isn't solidly middle class.

You make a valid point, but I worry that always pointing "no look, the bigger jerk's over there" enables this kind of wealth inequality to germinate. If you don't think the problem of inadequate taxation rests with those richer than you, how can you expect them not to believe the same?

Moreover, it doesn't take long for a medium-sized wealth inequality to become a large wealth inequality when the $100kers can afford to give their kids free post-secondary education and the $50kers can't.
posted by Popular Ethics at 12:06 PM on September 29, 2010 [1 favorite]


GuyZero: I would propose that "rich" and "wealthy" not be considered synonyms in this context.

I agree with you 100%. Wealth is about owning assets. You can be rich without being wealthy, but its hard to be wealthy and not rich (unless you're truly foolish). You can always sell assets to maintain your cash.
posted by zoogleplex at 12:06 PM on September 29, 2010 [1 favorite]


zoogleplex, I like that definition a lot, but I'm not sure it does what you want it to do.

If your basic needs are covered (food, shelter, water, health care), how "rich" you are depends on how much you want. This feeds into my idea of a "utopian" society, by the way: One in which these basic needs of all members are covered and all members regulate their "wants" based on their specific situation, instead of comparing themselves to others or looking to others for their "wants".

I am "average" when it comes to income in the US, probably below average for my area. My basic needs are covered without going into debt (*crosses fingers*). I can pay for anything I want because I don't want much. My major want is to do the best at whatever it is I am doing (hobby, skill, etc.). I feel very lucky and grateful for this.

I wish more people in America felt this way. It would probably a more joyous and warm place to live. But hey, we're just people, and you know what they say about absolute power.

Sorry for the sappy post but this thread is a real drag.
posted by 3FLryan at 12:08 PM on September 29, 2010 [1 favorite]


And you have to get way beyond $100k, even probably $200k, before most people can realistically start talking about hiring domestic help.

From personal experience, this isn't true.
posted by zarq at 12:08 PM on September 29, 2010


How am I to know which groups are larger around the world or even in the United States without someone else telling me?

You don't need to travel to India to realize that. There are huge disparities in the US. From this fun infographic, you could be the King of Dayton, Ohio (per capita income: $17,089; median home value: $81,500), or you could be just getting by in Newport Beach, CA (per capita income: $86,586; median home value: $1,000,001). If you could make it in Newport Beach, you could probably adjust your life a bit and live in Dayton with a private chef on the same income. Of course, the chances are slim that you could actually make the same amount of money in Dayton. But if you moved from Newport Beach to Dayton and sold your million dollar home (and you had owned it outright), you could live comfortably for quite a while.

Sadly, I think it would take a left-wing Rush Limbaugh and a left-wing FOX. The people voting against their interests are obviously not moved by facts and figures, but by rhetoric and hate-mongering. It wouldn't be that hard to demonize the rich instead of the immigrants.

Unfortunately, I don't think there are enough politically active financial backers who would support such an endeavor, and it would alienate many liberal people. Trying to win hearts by out-yelling the opposition is a noisy, losing effort for all parties.
posted by filthy light thief at 12:09 PM on September 29, 2010


When I look at the Forbes 400, I don't see professionals by and large, i.e. normal jobs. Most of the truly wealthy seem to be people who have made their money from taking risks of some sort, mostly entrepreneurial, and have been rewarded tremendously. I won't argue whether this is fair or not, or right or wrong. I don't know how far down the Forbes List before you get to someone who is wealthy from an income from a job. For example, look at the top 20 wealthiest in America (according to the Forbes 400), it comes from a handful of successful entrepreneurial ventures: Microsoft, Walmart, Berkshire Hathaway, Bloomberg, Google, Amazon. Those 6 ventures alone created 12 of the top 20.

acheekymonkey, I think this is a great point, but one thing that you didn't explicitly mention that is worth nothing is that a sizable number of the Top 20 (and Top 400) are not themselves the risk-taking entrepreneurs who started those companies, but rather individuals who inherited those companies from their entrepreneurial forebears - 4 Waltons in the Top 10, for example. Just wanted to put that out there.
posted by naoko at 12:10 PM on September 29, 2010 [4 favorites]


And pwnguin waaaay beat me to it.
posted by naoko at 12:11 PM on September 29, 2010


Two-thirds of the members of the Forbes 400 have fortunes that are entirely self-made, while 19% of the group inherited their entire fortunes.

Source
posted by Perplexity at 12:13 PM on September 29, 2010


Hmm, I guess my quote above referred to the 2008 list.

This more recent article on the 2010 list reports a similar number along with lots of other fun tidbits.
posted by Perplexity at 12:15 PM on September 29, 2010


"If your basic needs are covered (food, shelter, water, health care), how "rich" you are depends on how much you want."

Oh, I'm with you 3FLryan. That's why I distinguished between needs and wants and how you have to pay for them.

But we are talking about definite economic classes here. I mean, I need a car; I can pay cash for a used Honda, but I want a BMW M5. I need housing; I can easily afford to rent a place in a neighborhood where I want to live, but can't afford any of the houses here, some of which I want.

I can't get the things I want without borrowing a lot of money, so I'm just plain old middle class, economically.

I feel pretty comfortable, we're not struggling to pay bills at chez zoogleplex (this year), so I feel relatively rich, but economically I'm really not.
posted by zoogleplex at 12:19 PM on September 29, 2010


Maybe it's time we start talking class war.

Yeah, that's the attitude. Take the collected wealth of the U.S. and distribute it evenly to everybody. Last I read that'd be about $3,000 for each man, woman, and child.

Now, some of the folks that get it would magically turn turn that $3K into $6K tomorrow, $12K the day after, and so on, and be filthy rich in no time.

Some would take that $3K blow it, and try to figure out how to steal a TV to get some more money - and then argue that the folks that increased their wealth should be lined up against the wall.

I'm gonna go load my gun.

Hell, if having enough money to pay cash for dinner is being rich, then I'm glad that circumstances (as well as the military, working like hell, and then getting a freaking education so I could get a decent job) is responsible for me being rich.
posted by Man with Lantern at 12:19 PM on September 29, 2010


Ah, I see, I see. So. Public school is a penalty?

No, but drastically reordering a child's life is. Changing schools is a big deal, and one that parents rightly agonize over.


Some kids move every year or every few years, and they survive. I understand your concern for impacting the life of your kids, but the desire to keep up some social norms is not a reason to consider someone rich or poor. If someone has the option of paying extra for something or getting the free (or already for paid through taxes) alternative, they have more money who is stuck with the free option or nothing. Not knocking you, but pointing out where some might take issue with your stance.

And to add more noise to a noisy topic: I read "fuck anyone who has the slightest sympathy for rich people who think they're entitled to be super-rich" as meaning "no one is entitled to go from rich to super rich," not "fuck the rich." It's like someone complains that their limitations in life are similar to the poor who want to be less poor. "See, I have to suffer the same slings and arrows as the poor people because I can only spend a week per year in That Ritzy Resort, not a whole month like those other people who are better of than I am."
posted by filthy light thief at 12:20 PM on September 29, 2010 [1 favorite]


I have food, friends, safe shelter, people who love me, and whom I love. I have a car and a bicycle, and I think--for me, for right now--that is the most awesome thing ever. I help people when I can. I have my freedom and my health. I believe wholeheartedly in my beliefs, so long as they do not harm others.

Today, I am happy. I am satisfied most of the time with what I have. Sometimes I want More, but I do not need More. I used to have More, but I was not as happy with More. I don't know why More did not make me happy, so I stopped pondering that.

I used to crave More, desire More, lust for More...
but I don't want More, anymore.

I am not rich, well off, or even middle class, but I feel more satisfied than I ever have, simply because I am content with what I have.
posted by Debaser626 at 12:21 PM on September 29, 2010 [6 favorites]


I'm confused why there is so much disdain for people that were able to make money. As long as they did it without holding a gun to someone's head, they played the game and won.
If one doesn't choose to play the game because they hold other things as more important to intrinsic wealth than money than that's fine too.
Is it the whole thought that some people may not have the best start or possibility at playing?

What is the answer to the truly poor? Should people be given handouts for doing nothing? Should jobs be created by the government for people to trim lawns with scissors @35k a year? Is the proposed answer than the people that make obscene amounts of money just find a way to redistribute as often as possible?

Is this same hatred felt for people that were poor as a child, make it through public school, don't go to college and then go on to make 100,000 a year or even millions on their own entrepreneur endeavors?
Is there supposed to be some type of term on what one can pass to immediate relatives based off of wealth accumulated?

I ask because I'm genuinely curious.
posted by zephyr_words at 12:22 PM on September 29, 2010 [1 favorite]


"Two-thirds of the members of the Forbes 400 have fortunes that are entirely self-made, while 19% of the group inherited their entire fortunes."

But how many of those two thirds are people like Gates, Zuckerberg, or Nike's Phil Knight, who came from (relatively) wealthy-- or at the very least upper middle class-- backgrounds which provided them the kind of education, opportunities, or contacts that are pretty necessary to enable someone to "self-make" a fortune?
posted by dersins at 12:23 PM on September 29, 2010 [13 favorites]


What Reich was saying on the radio earlier was that the economy simply cannot be maintained when so much of the available buying power is in the hands of people who only speculate. There is a huge amount of money now in a bizarro invisible sub-economy that by its very existence makes the larger economy less stable. That's a problem for everyone.
posted by heatvision at 12:27 PM on September 29, 2010 [5 favorites]


I read "fuck anyone who has the slightest sympathy for rich people who think they're entitled to be super-rich" as meaning "no one is entitled to go from rich to super rich," not "fuck the rich."

Yeah, okay, but Pope Guilty has expressed a willingness to define "rich" and "super rich" at unreasonably low thresholds, so I'd argue that your sentiment is a distinction without a difference.
posted by valkyryn at 12:27 PM on September 29, 2010 [1 favorite]


"I'm confused why there is so much disdain for people that were able to make money."

If it helps, I'm of the general opinion that there is almost no way to make "super rich people" kind of money without royally screwing over some number of people - the larger the sum, the more people screwed.
posted by zoogleplex at 12:27 PM on September 29, 2010 [10 favorites]


Oh by the way, the incomes that qualify as poverty levels strike me as being extremely low. If the qualifying incomes were a little higher, life with those incomes would still be a damned tough row to hoe... and the poverty rates would be higher.

I read something not long ago (a book about how people are doing since welfare reform, I think) that said that people don't really cross a line and start experiencing life and their finances differently until they reach about 2x the federal poverty level. That's been a useful thing to remember when I'm reading about issues like this.
posted by not that girl at 12:30 PM on September 29, 2010 [1 favorite]


pwnguin:"For every great fortunes made in America, one is also handed down."

I'm not sure the ratio is 1:1. What surprises me about the Forbes 400 (which is a handy proxy for the elite that we are talking about here) is how much wealth is actually first generation, i.e. the wealth creators. I look at the industries on that list and often they are new: Ebay, Google, Microsoft, etc. I can't even find the Henry Ford family for instance. I'm just skimming it with eyeballs, however. It seems to support the old notion of shirtsleeves to shirtsleeves in three generations.

Personally, I think second generations should be allowed to keep some of the wealth of their parents. In Walton's case, there was so much wealth that it even keeps the second generation in the top ten!
posted by acheekymonkey at 12:35 PM on September 29, 2010


Those that don't need a paycheck see those that have more than themselves as rich(er)
Those that need their large paycheck see those that don't need one as rich
Those that need their small paycheck see those that get larger paychecks as rich
Those that don't get a paycheck think those that do are rich.
posted by zeoslap at 12:37 PM on September 29, 2010


The Henry Ford family seems to have done ok-ish.
posted by Comrade_robot at 12:40 PM on September 29, 2010


I'm confused why there is so much disdain for people that were able to make money.
Nothing wrong with being rich as long as the money:
a) is earned and not given unfairly,
b) doesn't grant disproportionate control over public matters,
c) comes attendant with a bigger responsibility to contribute back.

The problem highlighted by the original link is that most Americans feel they are exempt from these stipulations because don't consider themselves rich.
posted by Popular Ethics at 12:40 PM on September 29, 2010 [6 favorites]


The prospect of class warfare is more remote because our society has scaled significantly in size since 1915, and because the quality of life at the bottom (as much as it sucks) is substantially better than it used to be (availability of clean, cheap drinking water, public school education, paved roads and sidewalks, and so on.)
posted by davejay at 12:41 PM on September 29, 2010


Davejay: all those things you mention, especially public schooling, are literally falling apart right now because the wealthy are not paying even a fraction of their fair share. People are starting to notice.
posted by zoogleplex at 12:44 PM on September 29, 2010 [7 favorites]


But we have so much debt that we essentially break even every month (we don't go without the things we need, but old loans suck up the bulk of what we make over the necessities) Where does that put me? I've thought middle class, maybe even bordering on upper middle class.

My partner and I are also servicing a lot of debt, some of it for mundane reasons (we have a car payment) and some of it because of a catastrophic and unpredictable financial setback nobody could have prepared for. We've been living with very little spare money for a couple of years, and it will be another year, plus or minus six months, before we're out of the woods.

However, our family income puts us in the top quintile, and we live in a place where relatively low cost of living means that really means something!

The fact that we only have $89.50 left from tomorrow's paycheck after I pay all our bills doesn't mean we're anything but upper-middle class. It just means we have cash flow problems. A family that was truly lower-middle-class or working-class, faced with the financial setback we had, would have probably lost their home and cars, or declared bankruptcy, or defaulted on something. We did cash in some retirement accounts, and at one point we took a 90-day forbearance on our mortgage to get caught up on bills. But mostly we've been chugging along by the skin of our teeth, and except for that mortgage forbearance have paid bills on time.

Having the income we do has meant that while we have gone without or deferred some things people have wanted, we have not had to go without anything anybody needed. We have sometimes eaten the pantry and freezer to a crumb but we have never missed a meal or had less than a full meal or eaten the same food for three or more meals in a row because it was literally the only thing in the house.

It can also be useful to remember, when you feel "poor" because of debt, that just having the capacity to get into that much debt means you aren't poor. Truly poor people can't get credit.
posted by not that girl at 12:45 PM on September 29, 2010 [15 favorites]


I make more than valkyryn and less than Prof. Henderson. I still live paycheck to paycheck, but that's not because I'm poor, it's because I am an extremely lucky idiot.

I have money that is being set aside for retirement.

I have health insurance.

I drive a nice 2 year old mid-range car. I own a modest home.

I eat more (quantity, quality and variety) than I have to to stay alive. Much of this is consumed in restaurants.

I drink good beer and decent scotch and wine. I smoke.

We have 3 iPhones in the house. TV. Cable. A couple of laptops.

I don't care if some people have more, or way more, or way way more than I do, but I do care that so many people have less.

I say raise taxes on all the "rich," from me on up. If you can afford to do any of that stuff above while other people in your country go hungry, and you don't want your taxes to go up, well, I don't understand you at all.
posted by patrick rhett at 12:45 PM on September 29, 2010 [38 favorites]


I may not agree with everything he says, but I think this is something that Derrick Jensen says that I do find has an interesting semi-validity, when it comes to what I demand of our society/civilization (that is to say, the first part - the extremes he takes it too, I don't know if I would go that far, but it's close):
"Premise Five: The property of those higher on the hierarchy is more valuable than the lives of those below. It is acceptable for those above to increase the amount of property they control—in everyday language, to make money—by destroying or taking the lives of those below. This is called production. If those below damage the property of those above, those above may kill or otherwise destroy the lives of those below. This is called justice."
Personally, to answer zephyr_words query, I want to see a world/country/state/city, whatever, SOME level of place where the needs necessary for living aren't a struggle. That is, I stand for universal providence by society/nation of the essentials to live: Housing, Food, Clothes, Education, Communication (internet/telephone access). I do not claim everyone should have a free mansion, but I do think there should be a minimum standard in all these. I don't have an answer how to accomplish said goal, and it may never be attainable, but that is the world in which I wish to live.

I also want freedom for people to be able to move up (to a point) beyond that so they can live in environs that they feel conducive too. I also don't think society should automatically "fix" shit. If someone has a property and they destroy the fuck out of it, then it's not society's job to fix it for them. But everyone should have some place to live in some way that's not just a cardboard box or "the projects"/mass housing/slum lords.

Ideally, the food would be organic and healthy... Education through 4 years of college for every single person at an accredited college. If they want something fancier and can pay for it, go ahead.

I would set some sort of cap on income or wealth or something. I don't know. I would tax the fuck out of inheritence... I think people should be able to share some with their families, but I don't think just because you're born into wealth means you have the right to accumulate ever more. You already get enough from that (connections, schooling, etc...) that you should be able to make it on your own without the actual money.

I think Tommy Paine had a great idea in his "Agrarian Justice" that each person (of course in his day that was defined differently but the essential point remains) should be given a lump sum at the age of setting off on their life journey so they have an opportunity to start out somewhere.

Unfortunately, a lot of wisdom that comes from living life hasn't been accrued by that point and a lot of it might be "wasted". I don't know the answer, but I think it's a possible thing to look into.
posted by symbioid at 12:45 PM on September 29, 2010


You can always sell assets to maintain your cash.

Oddly, no, not always. Again we have the Victorian ethnographies of the Bronte sisters to guide us. In the worst cases major assets are controlled by trusts - houses, paintings, equity, land, even minor things like cars - and the trusts prohibit the sale of these assets. But, as your "Rich Dad" will tell you, a house isn't really an asset because it costs money, it does not generate money. And thus you have people living in unheated, unfurnished million-dollar houses because they aren't allowed to sell them.

Now, mostly this isn't the case and you end up with Heathcliff buying back Wuthering Heights from the indebted landowner or however that book ended.

But I maintain that if you basically read any Victorian novel and put yourself in the position of the dude shoveling shit in the stable as opposed to one of the main characters you've got it about right.
posted by GuyZero at 12:48 PM on September 29, 2010


Not that girl: I submit that having the capacity to get OUT of that debt is the true measure of your class status, and said so explicitly in my rules. Sounds like you're definitely middle or upper middle, yeah.
posted by zoogleplex at 12:49 PM on September 29, 2010 [3 favorites]


I submit that having the capacity to get OUT of that debt is the true measure of your class status

Only an American would conflate cash flow with class status.
posted by GuyZero at 12:52 PM on September 29, 2010


GuyZero: no argument from me, in terms of most Americans.
posted by zoogleplex at 12:53 PM on September 29, 2010


Heh, should have previewed, but I guess I wouldn't argue with that one either!
posted by zoogleplex at 12:54 PM on September 29, 2010


clockzero: No, ambrosia, the people making twenty million fucking dollars a year have already won and require no help in "winning" from the oh so unjust observations of the working classes that wealthy people are wealthy.

If you really believe this then you haven't been hearing the talking points for this upcoming election.

I saw a bumper sticker the other day (that I can't find online) that basically read:
"The GOP: Succesfully convicing the poor to vote against their own interests since 1980."
I think that about sums it up.
posted by Big_B at 1:02 PM on September 29, 2010


I say raise taxes on all the "rich," from me on up. If you can afford to do any of that stuff above while other people in your country go hungry, and you don't want your taxes to go up, well, I don't understand you at all.

When I get taxed I don't feel like it's helping anyone. In a large degree it feels like I'm being stolen from to help businesses that don't know how to operate stay afloat through undeserved charity. It feels like I'm helping people better off than I am. It feels like I'm giving an eight year old a credit card attached to my name and dropping them off in the world's largest toy store.

Maybe the IRS can change there image to starving children and the ultra rich will just start throwing in extra tax money.
posted by zephyr_words at 1:04 PM on September 29, 2010 [1 favorite]


Not that girl: I submit that having the capacity to get OUT of that debt is the true measure of your class status, and said so explicitly in my rules. Sounds like you're definitely middle or upper middle, yeah.

Oh, yes! That's one of the things we've thought of often during the past couple of years: that however broke we were and however long the timeline seemed, we still had a timeline: we could always look forward to a time when we were going to be much less broke.

It's a really useful metric to include; I like your rules. I remember a middle-aged woman in my Quaker meeting saying to me a few years ago that something someone said had made her realize that, when she was in grad school and living on ramen noodles, that wasn't the same as being poor because she always knew at some point she'd be out of grad school and making money--for most of her adult life, she had thought she understood poverty because of that tiny grad school stipend she lived on for a few years. And then a lightbulb went off over her head, and it hit her how different it would be to be that broke for the rest of your life.

We also talked sometimes about the worst-case scenario: we might have lost our home. In which case we would have had to rent a place to live. The place we rented would certainly have been decently maintained, it would have had hot and cold running water, working appliances, heat and probably air conditioning, too. Our worst-case scenario, as stressful as it felt sometimes, really wasn't all that bad! Definitely a class marker there as well.

I am interested in my life how resistant other people are to me identifying my family as upper-middle class, when it seems to me we clearly are: my partner and I both have advanced degrees, his income is sufficient to put us in the top quintile while I am home full-time or doing only part-time work from time to time, we have reliable late-model cars, and so on. Our home is modest, by choice--we downsized from a very large and beautiful home we found too oppressive to maintain and support.

I think people are resistant to it the way an alcoholic's drinking buddies can resist admitting the alcoholic is an alcoholic: because if they are, maybe you are too? A few times when I've said I think of us as upper-middle-class, people have really pushed back--people with nicer houses and higher incomes than ours, for instance. One woman who should have known better said to me that she thinks she and her husband have a lot of money until they look at that top 1% and then she realizes they really don't.

I take the point made above that the great mass of us down here have more in common than we do with that top 1%, and yet thinking like this woman's--that she really doesn't have economic privilege if she isn't in that top 1%--is one way people protect themselves from having to think about the privilege they have.

Phew, I'm long-winded. But I've been doing a lot of thinking and reading about social class lately, it's a subject I find very interesting.
posted by not that girl at 1:05 PM on September 29, 2010 [19 favorites]


It's important to note that there are thousands of ultra-high-net-worth individuals (>$30 million in wealth) in the U.S.; I'd question the assumption that the backgrounds of the Forbes 400 are representative of them all, much less the hundreds of thousands in the top 1%.
posted by Esteemed Offendi at 1:07 PM on September 29, 2010 [2 favorites]


mrgrimm: Not all that well-paid. And single-earner of a family of four (my wife works very part time). I meant "relatively well-paid" relative to, like, half of my fellow citizens. Not relative to well educated professionals, necessarily. I'm pretty much the center of what's left of the middle class.

Yes, I could probably make choices that would leave me with a hope of saving a million by retirement, what with compound interest etc etc. My point was mainly that it would be a major lifelong goal that I'd have to make serious sacrifices for. Not something I might have to wait fifteen years to accomplish, for my first million.
posted by rusty at 1:08 PM on September 29, 2010


Conversely, Pope Guilty, and you if you agree with him, would define "privilege" down to the point that anyone who makes north of the national median would be considered "privileged."

I'm confused as to why this isn't the very definition of privilege.
posted by shakespeherian at 1:10 PM on September 29, 2010 [1 favorite]


"Only an American would conflate cash flow with class status"

Maybe it's because I am a new American, but what other means is there to talk about class status in America? We don't have a peerage system or castes to establish class status, so money is about all that is left. If you can jump class by winning the lottery, then it's based on dollar dollar bills, y'all. No?
posted by acheekymonkey at 1:12 PM on September 29, 2010


By the way, the Wall St segment of the last This American Life seems particularly relevant. Especially the interview in the bar with the Wall Street guys who know that they have what they have because they're smarter than everyone else and they deserve it. Where "it" is government bailout money, mind you.

That, right there, for anyone in this thread who's still puzzled why even people with moderate income-based wealth are so reviled, is why. I know perfectly well you're not all like that (e.g. patrick rhett, very well said!), but you don't have to look very hard to find those who are.
posted by rusty at 1:15 PM on September 29, 2010


acheekymonkey: We have a cultural class system too, it's just not as easy to see or as acknowledged as in, say, the UK. I, for example, come from white-collar New Englander stock, went to private middle and high school, and dropped out of a very good college. I could be quite poor before I'd have to really suffer for it. I have a very strong sense of my own privilege, which means I probably won't ever be treated like a poor person, even if I am one. If anything our class system is less flexible and more pervasive for the fact that we all pretend it doesn't exist.
posted by rusty at 1:18 PM on September 29, 2010 [4 favorites]


heatvision: "I would like to see how much of the population is represented by each of those quintiles."

yay! a question I know the answer to! The answer is: one-fifth of the population. That's what "quintile" means.

Thinking back on the article, though, that means that the "utopian" graph where all five quintiles are equal really isn't "utopian" at all unless your name is Peter Kropotkin; it's actually anarchist communism. If the "wealthiest" quintile has the same amount of wealth as the next wealthiest quintile, and the next one, then all quintiles have an equal amount of wealth, which means that everybody has an equal amount of wealth, which means that everybody has zero wealth (or effectively zero wealth if everyone has exactly the same as everyone else).

I think, sadly, that as someone else asked further up the comments, this article does show that Americans don't understand statistics more than it shows that they don't understand economics, especially since 43% of the respondents said they'd prefer the graph where nobody owns anything.

WAAAAAAAAAAAIIIT a minute; according to footnote 2 on page 4 of the PDF, these people are rigging their results by comparing apples to oranges; when they asked people to choose between the three pie charts, they were using wealth distribution for the US one, but income distribution for the Sweden one! (I was wondering why the Sweden one was showing the second wealthiest quintile as being twice as wealthy as the wealthiest quintile!) If they'd been comparing apples to apples and were comparing the income quintiles of the US to the income quintiles of Sweden, or the wealth quintiles of Sweden to the wealth quintiles of the US, they would've looked a lot more similar (in fact they basically say as much in that footnote!) and a lot more people would've voted for the US one. From where I'm standing, it looks like this entire study was specifically rigged to generate the breathless headline "MOST AMERICANS WOULD PREFER SWEDEN'S DISTRIBUTION OF WEALTH!" (which is exactly what it's done.)

Damn it, guys! Now I have to roll my eyes a little less when neo-cons complain about the "liberal media conspiracy"!

My brain seems all squishy today, so if I'm completely misinterpreting the article and the PDF, please let me know.
posted by luvcraft at 1:19 PM on September 29, 2010 [7 favorites]


We have enough to fill a ball pit with crisp Jacksons and loll therein, but then typically we have to use one of those twenties to procure Bag Balm, to soothe our chafing injuries.

There's nothing about that on the chart, so fuck if I know where we stand.
posted by everichon at 1:20 PM on September 29, 2010 [1 favorite]


Esteemed Offendi: "It's important to note that there are thousands of ultra-high-net-worth individuals (>$30 million in wealth) in the U.S.; I'd question the assumption that the backgrounds of the Forbes 400 are representative of them all, much less the hundreds of thousands in the top 1%."

You're right. The reason I use the Forbes 400 as a proxy is due to the way wealth skews with inequality. The wealth of the Forbes 400 could be larger than the total wealth of the next 4000 combined, much like the top 1% is worth 60-80% of all other wealth (or whatever the true amount is.) It's not that they are representative so much as they outweigh so many other people with regards to wealth.

But, yeah, good point.
posted by acheekymonkey at 1:21 PM on September 29, 2010


The richest 1 percent account for 35 percent of the nation's net worth; subtract housing, and their share rises to 43 percent.

Funny how they keep subtracting housing to try and illustrate how little regular people have.

"You know your largest & most important asset; the one that you've been throwing more than half your income at for years; that one which takes decades to finally call your own?

Well, for the purposes of working out how much stuff you have, let's just pretend that it doesn't exist..."
posted by UbuRoivas at 1:23 PM on September 29, 2010 [3 favorites]


I see valkyryrn's point, honestly. It's not that some guy making $60K has it rough, it's that our culture is so fucking aspirational that it's much, much easier to see the things you're lacking rather than the things that you have.

My family, by any measure of the equation, has got it good. We make basically exactly the median income for a family of four for our county (one of the 100 highest-earning counties in the US), but we do it with a single income, which is a rare privilege. We have no debt apart from our mortgage, which is $100K less than our home is worth even in the current economy. I send my kid to private preschool despite the fact that I'm a stay-at-home mom. I have hobbies, hobbies that need supplies that cost hundreds of dollars a year, and I buy more of them than I need. My kid wears new clothes. As I type this, I'm paying my neighbor to clean my house for me. (Although that's mostly because whenever I try to do ANYTHING at this point, I get waves of contractions, and I'm still a month away from being at full term.)

There are circumstances that make our situation even better than it sounds, too, but I won't go into them here.

And yet, it's so much easier to focus on what I wish we had. Our furniture is 15 years old and falling apart. We had to move the home office into our bedroom to make a bedroom for the second baby, because our house just isn't THAT big. One of the turn lights on the car is out, and I can't figure out how to replace it, and taking it into the shop is just more than I want to spend. I hate my oven with a purple passion, but replacing it is soooo not in the budget. I want a damn iPad so bad I can taste it.

It's so, so, SO easy to forget that the reason we don't buy these things is NOT because we can't afford them, but because we are spending our money on other things. For what we spend on the kid's preschool, I could buy a new living room set every year. We bought a house that we could afford on one income so that one of us would be able to be home with the kids. Over the past two years, I've probably spent enough on fiber arts and quilting supplies that I could have bought a new oven instead. I have certainly spent enough money paying my neighbor to clean my house since I've been pregnant that I could have bought an iPad.

What makes me rich -- regardless of the quintile I'm in, or what have you -- is having the choice of how to spend my money. Yeah, it hurts sometimes to have to make the decisions, but having the option of one thing or the other thing is rare enough in this country. There are a lot, a lot, a LOT a lot of people who don't have the things I don't have, but who don't have the things I *do* have either. People who don't take their cars in to be fixed not because they spent the money on fancy cheese, but because they just plain don't have the fucking money. People who don't have a dedicated home office not because they want their kids to each have their own room, but because they don't have the room even when their kids are sharing and they don't have a fucking computer anyway. &c.

But everything on the TV and the radio and the everything all around you is all bigger better shinier richer deeper faster better harder MORE. . . it's constant work, for anybody, to buck against it. For me, for the guy making ten times what I make, for the guy making one-tenth of what I make. It's sick, and I don't know what to do about it, except to try and make time for quiet gratitude in every day.
posted by KathrynT at 1:24 PM on September 29, 2010 [14 favorites]


I'm confused why there is so much disdain for people that were able to make money. As long as they did it without holding a gun to someone's head, they played the game and won.

The problem is, the game isn't fair, and guns aren't the only weapons at play in the game. The game rigged by people with power, and power generally comes from/with money. Sometimes the set-up includes a minor tilt, sometimes it's rules that only certain people know, or maybe there's a certain mentality that helps the game make sense, but very few poor people end up on the rich side of things by playing the game in any fair and even-handed sort of way. Everything could have been done in a law-abiding fashion, but that doesn't mean every action was fair.
posted by filthy light thief at 1:30 PM on September 29, 2010 [5 favorites]


Oh by the way, the incomes that qualify as poverty levels strike me as being extremely low. If the qualifying incomes were a little higher, life with those incomes would still be a damned tough row to hoe... and the poverty rates would be higher.

I agree, the poverty line is not a realistic way to measure poverty. Governments in America have an interest in setting that line unrealistically low in order to deny benefits. And then when people are able to meet the criteria, the benefit programs offer such sparse, inadequate assistance. They're designed to meet a minimal standard of living, and I do mean minimal.

I personally prefer the "basic needs" standard.

I did a paper and learned that for a single adult living in my city (Philly PA), they would need about $18,000 a year to pay for basic needs. The federal poverty threshold is $10,830. Through Social Security, I receive less than that and there are many people who work and still earn less than that.

I've often wondered, shouldn't income programs like Social Security and welfare pay enough to at least meet the poverty threshold? Why do people on SSI receive only $8088 a year when they cannot work because they are disabled and should by all rights be spared the judgment of those who hate the "undeserving poor"? That just goes to show that the ire isn't really about poor people buying cadillacs or any "culture of poverty". There is institutional animosity toward people who are poor despite working full-time, people who are poor due to disability, people who are poor because they are children, etc. America hates poor people, even though so many Americans are poor.
posted by Danila at 1:39 PM on September 29, 2010 [12 favorites]


And as to the title of this post, I don't think of myself as middle class, but it's not because I haven't tried. I've probably played with this How Class Works graphic a dozen times, trying to make it work. But in my case I don't want to be middle class in order to feel better about myself or my family's circumstances, but because I KNOW there are a lot of people who are worse off than I am and I feel like they are basically erased from public discourse. I don't want to contribute to their invisibility by claiming the mantle of "poor", but man I am poor.
posted by Danila at 1:51 PM on September 29, 2010 [2 favorites]


Man, that 'How Class Works' graphic is the kind of thing that cheers me up. I'm Ozymandius here or something.
posted by GuyZero at 2:03 PM on September 29, 2010


"I'm confused why there is so much disdain for people that were able to make money."

Behind every great fortune is a great crime. Usually some form of monopoly or other unfair business practices. Microsoft is your classic example of this, and it made the richest man in the world until Gates started giving away his money, now it's the Mexican telecom guy, another monopolist.

Revolutions happen because the wealthy and powerful think they can fuck everyone else indefinitely, and they are always wrong.

cf. Roman Republic, Fall of
posted by Ndwright at 2:05 PM on September 29, 2010 [1 favorite]


To me this feels not so much like Americans are clueless about economics (which is how it's being spun) as about statistics.

Speaking of statistics, what about the effect that a very long tail of mega-rich has, in terms of skewing those bars?

To give a simple model, if you have nine professionals on, say, $100K and one Bill Gates with $100,000,000,000, it would look like the professionals have bugger all, when in fact they're doing alright, notwithstanding that Bill Gates has so much money he'd take his whole life just to burn it in a bonfire.

For that reason, I'd prefer to see this data with around the top 1-2% of people removed; the statistical outliers who own ridiculously disproportionate amounts. Then we'd get a more subtle view of the disparities between the rest of the population.
posted by UbuRoivas at 2:14 PM on September 29, 2010


If one doesn't choose to play the game because they hold other things as more important to intrinsic wealth than money than that's fine too.

Right on. Because what could possibly be more important than money and playing the game to amass it?
posted by blucevalo at 2:15 PM on September 29, 2010


"For that reason, I'd prefer to see this data with around the top 1-2% of people removed; the statistical outliers who own ridiculously disproportionate amounts. Then we'd get a more subtle view of the disparities between the rest of the population.

NO. Because the top 1-2% has tremendously disproportionate political power. This is precisely the goddamn point, to show how badly skewed the game is toward that top 1-2%.
posted by zoogleplex at 2:18 PM on September 29, 2010 [1 favorite]


One time, I tried to explain to some people on a message board that they were wealthy compared to much of the world.

They got really angry at me when I sketched a metaphor involving Paris Hilton.

This thread reminded me.
posted by zennie at 2:19 PM on September 29, 2010 [1 favorite]


NO. Because the top 1-2% has tremendously disproportionate political power.

That's an important, but different, issue. What I was saying is that the very top 1-2% force the scale to be warped to represent them, such that you can no longer see the relative difference between the others.

It's like the mega-rich are on a logarithmic scale while regular people are on a linear scale, if that makes any sense.
posted by UbuRoivas at 2:25 PM on September 29, 2010


I'm confused why there is so much disdain for people that were able to make money. As long as they did it without holding a gun to someone's head, they played the game and won.

This isn't anything personal, but the reason I have animosity in this situation is largely because in a society where by and large your ability to be wealthy is based on having a predetermined wealth before you even escape your mother's womb, I find people who call such an unfair situation a "game" to be at best painfully shitty at metaphors and at worst complete assholes.
posted by XQUZYPHYR at 2:33 PM on September 29, 2010 [7 favorites]


"It's like the mega-rich are on a logarithmic scale while regular people are on a linear scale, if that makes any sense."

It makes perfect sense, because it's true.

The point is that since most Americans don't understand this at all, dont know where they are on these curves, large numbers of them use their own political power of voting not for their own financial interests, but for the people on the logarithmic curve. They're being bamboozled by tremendous amounts of cash spent on marketing.
posted by zoogleplex at 2:36 PM on September 29, 2010 [4 favorites]


Oh, but I do. I do. Some of us pay attention.
posted by Decani at 2:51 PM on September 29, 2010


And you have to get way beyond $100k, even probably $200k, before most people can realistically start talking about hiring domestic help.

I'm a nanny and none of the families I've worked for have ever made even close to this much money. Sure, if they were out of work, I'd be out of work too - but they're absolutely not super-wealthy. My current employers do alright, I would say that they make more than middle class wages (from what I know), but they're not rolling in dough and I've absolutely worked for middle class families. The people who hire nannies and housekeepers aren't always the people who do so because it's extravagant, but the people who do so because they need the help.

(Before anyone talks about the expense of a nanny: I personally cost less than a "good" day care for two kids. Childcare is wicked expensive and with more than one kid, a nanny is often cheaper than your other options.)

I am claiming that despite my above average income that I remain solidly middle class, i.e. in a position where I am not in immediate financial hardship but remain far from financially secure.

If you have an above average income, you by definition are not "middle" class as you're clearly making more than the "middle." Also, by definition, you have greater resources to draw on in the event of hardship. My working/middle class parents would certainly scoff at the idea of a lawyer being considered "middle class."

It's fine to have privilege. It's fine to make more than the average amount of money. What's sucky is to pretend like you're in the same boat as the rest of us. Look around your boat - if you can even see a lifeboat, you're ahead of most people. It would serve you well to acknowledge that.

I'm a nanny. I'm solidly middle class. I make less than the national average. And I don't want for anything. I have some debt, but not much. I can pay my bills on time. With the help of my partner, I'll be able to take a few months off unpaid after our baby is born in March. I have health insurance. Anything more in my life would be gravy. I absolutely know how lucky I am and how hard it is not to have access to credit or family members who are willing to loan some money in a pinch. I don't know true poverty other than I know I've never experienced it. I would never deny my own experiences to have been anything other than "privileged" and I'm not making anywhere near six figures.
posted by sonika at 2:52 PM on September 29, 2010 [5 favorites]


GOD untangling this thread, and valkyryn's responses to it, and making sense of it all is difficult. This would all be so tl;dr for me if valkyryn's comments haven't made me look closer to what he's saying.

heatvision: Also, it was weird today because I was thinking about that chart and what it means all morning, and kind of came to the conclusion that this must be part of why the economy is so stagnant. I keep reading about the tax break debate and how the wealthy don't spend in the same way as the lower classes at all, so the choice of who gets the tax breaks is very relevant. And then Robert Reich came on Fresh Air and said exactly that.

This makes sense. But then:

rusty: We have an economy for 300 million people with only 150 million participating. We're like a town where half of the houses are boarded up.

Which prompted valkyryn to respond:

valkyryn: Oh, come now. The reason only half the people in the country are considered part of the labor force is because of the age structure of the population.

But what rusty actually was referring to was how wealth becomes locked-off when the rich get ahold of it. He was using the numbers, to my eyes, as an example and not a sourced fact. So, the age structure remark is unimportant.

valkyryn: The income quintiles really aren't all that spread out. Sure, if you're making $160,000 you're making more than 95% of the population. But the richest 1% of the population--and you only need to earn a little more than $250,000 to be in the top 1% of incomes in the US--own 43% of non-housing assets. That means that the 2d-20th percentile control about 50% of non-housing assets. This is significant, because housing assets almost universally do not represent current income, i.e. they're part of your net worth but they won't feed you. So yeah, just under 20% of the population controls about 50% of the wealth, but that means that on average they've only got two or three times their share per capita. That isn't all that far out from most people's estimates of what a reasonably equitable distribution ought to look like.

God, reading that paragraph makes my brain hurt. It's taken me a lot of referring back and forth between the article and v's comment to get what he means. It is this: the 1% of the population controls 43% of the non-housing wealth, and the top 20% controls 93%. Subtract the wealth of the 1% from the wealth of the 20% and you get 50% of the non-housing wealth in the nation. His statement is that the average of this 19% of the population is only 2-to-3 times greater than the average wealth.

But where does the average fall in that continuum? Because he's talking about mean wealth, not median, the wealth of extremely rich people, including the obscenely rich 1%, would skew such a chart far to the left. As a result, far more than half the population of the U.S. have less than average wealth. These kinds of extreme power curves can make talk of averages misleading, and that itself skews people's expectations of what the income spread should look like... which, in a way, is the Slate article's point.

One more thing. In his longpost above, valkyryn says:
The standard MeFite response to this[...]

Every time I see someone stereotype then dismiss the "typical" MetaFilter user I see red. MetaFilter is not a liberal website; it is a themeless community website that requires $5 to join. It happens, for some reason, to host a fair bit of liberal thought, but it should not be forgotten that this happened on its own, that we aren't exactly DailyKos here.

Thus, I find it grievously offensive when someone tries to dismiss us as being liberals. We might be in the aggregate, but not because we self-selected for it.
posted by JHarris at 3:03 PM on September 29, 2010 [11 favorites]


Back when I was in college, I got some financial aid.

A friend was complaining that she didn't qualify for financial aid even though her parents were not rich, and did not make a lot of money. Oh, and she noted that her parents had to list the three properties they owned as assets, and it made them look like they were richer than they were.

I told her it was about priorities. Would your parents rather have an extra house they don't even live in, or would they rather sell it to pay for your education?

God forbid they had to sacrifice something like that for their daughter's education!

As it turns out, they could afford to pay for her education without selling any of their properties. But, apparently, it also earned them the right to bitch about not being eligible for financial aid.
posted by jabberjaw at 3:10 PM on September 29, 2010 [3 favorites]


If you have an above average income, you by definition are not "middle" class as you're clearly making more than the "middle."

Look, I largely agree with your points but that's just silly. Do you really mean to suggest that only people making exactly the average income should be considered "middle class"? Surely there should be a range? And surely 60K a year, valkyryn's claimed income, should fall within it, albeit at the upper end. That's a little less than 30 bucks an hour, which is pretty damn good but is less than what the plumber charged me for his labor last time I called one.

Also, by definition, you have greater resources to draw on in the event of hardship. My working/middle class parents would certainly scoff at the idea of a lawyer being considered "middle class."

Well, maybe your parents need to reassess their prejudices. I know lawyers who make well under 40,000/year, which as you can see, puts them under the median income for full-time employees in this country.
posted by dersins at 3:12 PM on September 29, 2010 [1 favorite]


the tax man's taken all my dough ...
posted by pyramid termite at 3:24 PM on September 29, 2010


I know this happened like forever ago, but the reason you don't buy the ham and bread is because you're living in your car and there's no where to store or make that stuff. There's also no where to wash dishes. For 99 cents you can get a half pound been and cheese burrito from Taco Bell. It's boring, but it's cheap and there aren't a bunch of added problems. Like bugs thinking your car makes a nice home because you're storing unrefrigerated food in it.
posted by stoneweaver at 3:51 PM on September 29, 2010 [3 favorites]


"You know your largest & most important asset; the one that you've been throwing more than half your income at for years; that one which takes decades to finally call your own?

Well, for the purposes of working out how much stuff you have, let's just pretend that it doesn't exist..."


The problem is that for most people housing is an extremely illiquid asset. There are ways to take out equity, of course, but that just keeps you paying mortgage interest indefinitely.

Even once you've paid off the mortgage, you've still got to live somewhere, so the only way to realize the value of a paid-for house is to move into a cheaper one, switch to renting, or stop needing a place to live (i.e., die). Most people tend to move into ever more expensive houses, and many people will only 'realize' the wealth tied up in their houses when they die, where it doesn't do them much good.

And remember, too, that home real estate is generally a terrible investment. Apart from the recent bubble, real estate values tend to go up more or less in step with inflation. There are exceptional areas, but on average home equity is just a hedge against inflation, not a money maker.
posted by jedicus at 4:07 PM on September 29, 2010


Plus as far as assets go your primary residence doesn't generate income. Stocks, bonds, mutual funds, etc all generate a return. Real estate investments generate a return. But real estate is generally a drain on your cash flow and not a net positive in addition to being a very illiquid form of savings (per jedicus).
posted by GuyZero at 4:32 PM on September 29, 2010


The problem is that for most people housing is an extremely illiquid asset / Plus as far as assets go your primary residence doesn't generate income.

Sure, but the figures are about "wealth owned" - ie total assets. There's nothing there about them needing to be liquid or income-generating assets.

And besides, even if real estate only keeps par with inflation in the long term, that's a whole lot better than most other things one might spend money on. Almost without exception, cars, electronics, furniture etc all lose value over time, and other lifestyle expenditure like holidays, food and clothing are also just a form of pouring money down the drain, albeit in an enjoyable & rewarding way.

Speaking of which, that's the greater value of a home - not so much the resale value (which is never likely to be realised, as jedicus points out) but in the value that comes from the comfort it provides, from living in it & making it your own space, according to your individual needs & tastes.

That was why I was calling it regular people's "most important" asset. It's important because it so significantly affects your day-to-day quality of life, unlike a stash of abstract wealth gathering virtual dust in the computers of a financial institution.
posted by UbuRoivas at 4:53 PM on September 29, 2010 [1 favorite]


I know I'll probably be vilified for this but here goes.

Between my ex and I, we probably make 300k a year before taxes - half that after. 4 kids 2 in college. I drive a 1996 car which cost 6k, live paycheck to paycheck, decent 3 br condo, no maid, nothing extravagant by any means. We support two reasonable households like many who are divorced, I eat my share of PB&Js, some but no huge retirement cushion, local drive vacations, no big luxuries, unless you consider that we live in NYC metro area. Am I incredibly lucky, and well-off compared to many, yes. I have a decent job in which I need to work 10-12 hours plus commute of 3 hours, decent health care. Wealthy? Doesn't seem so to me. Seems more like middle-class. I live less well and have less security than my dad and mom did.

I think people do not properly take into account costs of living in these kinds of analyses.
posted by sfts2 at 4:53 PM on September 29, 2010 [7 favorites]


i ref'd it here and i know noah comprehensively addressed some of these issues already but i thought cohen & delong in the end of influence (pp. 103 – 115) provided a nice overview (self-link ;) of some potential sources and causes of inequality...
While the median American male's top income stayed flat from 1973 to 2005, the gain went to the topmost reaches of the top 10 percent. The ratio of the top 1 percent to the middle fifth went from 10 to 26 times. What caused the change? A set of forces that include:
  1. An unprecedented rise in asset values: The Dow Jones Industrial Average rose at about 1.3 percent per year between 1960 and 1980 (and that is not adjusted for inflation). Over the next twenty years, 1980 to 2000, it rose tenfold—1,000 percent. Whatever we may hear about America being a nation of shareholders, shareholdings are radically skewed toward the top: The top 10 percent owns 77 percent of all stocks. And the holdings are steeply skewed within the top 10 percent: The top 1 percent of American households owns one-third of all stocks, the next 9 percent owns 43 percent, and the remaining 90 percent of Americans owns 23 percent (including 401[k]s). Housing prices also rose, and the wealthiest families own the biggest houses and benefit disproportionately from the advantageous tax treatment lavished on home ownership.
  2. Government policy: Under Eisenhower, whom no one ever called a radical, top tax brackets extended up to 90 percent (snaring marginal bracket dollars from no more than about three hundred very rich people); in the 1960s, they were about 70 percent; in 1986, they were lowered to 28 percent and have moved around since, but were never pushed back up to the ranges that prevailed during the faster-growth, more equitable America of the first postwar period. They are now about 35 percent. Under George W. Bush, the government cut away at inheritance taxes (and even eliminated them entirely as of 2010, but only until January 1, 2011, when pre-Bush rates are scheduled to return unless the law is changed: The elderly rich are likely to be especially fearful around Christmas 2010). Inheritance taxes affect only the top 1.5 percent.
  3. Immigration: Huge, recent waves of unskilled immigrants, legal and illegal, compete for low-wage jobs, pulling down the bottom of the income scale.
  4. Imports and offshoring: The influx of imported goods pushed down employment and pricing power at American manufacturers, which typically paid higher wages than did the big-battalion service employers, retail and fast-food restaurants, squeezing wages. Moving industrial production offshore—even the threat to do so—holds down demands for higher wages. Offshoring, until recently confined to industrial production, is rapidly extending into white-collar jobs in such diverse industries as finance, insurance, accounting, law, and engineering—the product flows instantly through the Internet, enabling employment to relocate to places such as India and the Philippines, where comparable skills can cost as little as one-fifth of American rates.
  5. Decline of unions: Unions more or less disappeared as a major force in most of the private sector. The Reagan administration was far more successful in its war on unions than in its war on drugs, beginning with the air-traffic controller strike. And of course, increased foreign competition and the weakening of the giant, mass-production, oligopoly industries such as steel (the core of union power) combined to radically reduce unions' ability to sustain wages.
  6. Technology: It is not the production of high-tech goods, but their use in business that is often cited as an important factor that has increased inequality. Whatever the findings of econometric analyses, it is difficult to argue that the U.S. economy uses more technology than, for example, Scandinavia or Germany, where significant increases in income inequality have not been recorded.
  7. Culture: It seems to us that there has been a cumulating and massive cultural change regarding income inequality: CEO pay is a good indicator. In the 1960s, CEOs of large companies were on the top of the income pile, paid as much as thirty times the average worker; by 2000, the ratio had gone up tenfold, to three hundred times the income of the average worker. It would be difficult to argue that CEOs, or their companies, performed better in the twenty-first century—when Congress voted to repeal the inheritance tax—than they did in the postwar period. Furthermore, this increase has been exceptionally high in the United States relative to other OECD countries.
We don't weigh these seven factors for their relative importance.

Is there a connection between rapidly rising inequality, stagnant middle-class earnings, and the collapse of savings in the United States? It is very likely that these trends are all closely linked. Faced with stagnant incomes, seeing themselves falling behind those above them on the income scale, and spending their evenings watching Lifestyles of the Rich and Famous, what did the average American family do?

[...]

Over the past ten to fifteen years, finance—always an important force in the American economy and in policy making—became a dominant force, perhaps the dominant force. It dominated in several reinforcing ways: as the leading growth sector generating swelling incomes and profits; as a substantial contributor to increasing income inequality; as a shaper of business behavior, government policy, and American ideology; and, of course, as the major precipitator of the current financial and economic crisis...
hacker & pierson apparently have more to say in winner-take-all politics:
Have America's financial-industry professionals generated such wealth in the broader economy that the growth in their share of income is justified? Have executives at American companies greatly outperformed executives at companies in countries where the income share of the top 1% did not rise, such as Germany and Japan? Are American executives being paid more because shareholders are getting their money's worth, or is something else going on?
i dunno, but if you think that politics will become more symbolic then there's probably not a lot that can be done (until political configurations shift again of course!)
posted by kliuless at 5:55 PM on September 29, 2010 [13 favorites]


UbuRoivas: When you say the top 1%-2% are the ultra-rich, I think you're thinking more of the top 0.1% or thereabouts. I.e. I think the real yawning gulf you're trying to get at is further up that logarithmic cliff than you might think. I'm not sure about that though.

JHarris: But what rusty actually was referring to was how wealth becomes locked-off when the rich get ahold of it.

Yeah, exactly. The numbers are irrelevant, what I meant was we're trying to run an economy for X people where only X/2 people can even participate in it. And, as you bring in, a further 50% or so of the total wealth is effectively out of circulation, in the hands of people who don't ever need to spend any of it. Wealth that doesn't circulate is worthless to everyone except the person holding it. Whereas a dollar that I get is almost certain to be back out making the rounds and greasing the economic wheels by the end of the month. The fewer people for whom that is the case, the less economic activity there is going to be. It's just a bad cycle to get your country into.
posted by rusty at 5:59 PM on September 29, 2010 [1 favorite]


"we live in NYC metro area ... plus commute of 3 hours"

Well, I don't want to jump all over you like you said, but to be honest, it doesn't sound like your family is middle class - it sounds like you need to move! The cost of living in NYC + your really long commute must be eating up most of your income. From your description, it sounds like having the ability to live 1.5 hours away from your workplace in metro NYC is your primary luxury, and it sounds like you pay dearly for it.

But make no mistake, $300k is a lot of money, 6 times the average US salary, and it puts you squarely within the ranks of the wealthiest 1% of people in the world. I understand that you think your costs of living are very high, but I ask you to consider the fact that you are making choices that cause your cost of living to be that high. It is the fact that you are able to live in NYC and pay for the gas to drive 3 hours a day that tells me that you are solidly in the upper class.
posted by pikachulolita at 6:04 PM on September 29, 2010 [2 favorites]


pikachulolita: Well, I don't want to jump all over you like you said, but to be honest, it doesn't sound like your family is middle class - it sounds like you need to move!

sfts2 implied he was divorced.

Being divorced (twice) myself, I can attest that you don't have the same options of mobility as married couples.

I find myself in a similar boat. I have income encumbered by child support and expenses mandated by the working situations of myself and my ex. My partner was unemployed for nearly a year and our savings were eaten up.

Yet, when I consider all the factors, I'm probably upper middle class and just not managing expenses well.

I wonder if part of the problem with US politics currently is that our expectations increased irrationally and unsustainably during the bubble and we just haven't come to terms with our true situations yet.

We are given contradictory advice -- we need to spend to keep the economy moving, but we need to scale back to manage our expenses better.

[begin massively mixed metaphors ...]

Yes, there is probably a rational path through this, but technology and our life choice options have increased exponentially in the last generation, and I fear that the average person's capacity to keep track of it all has overflowed both their RAM and their CPU.

When you overflow buffers, it is very easy to hijack the device and take control. In people, that means we revert to defensive and non-introspective behavior and it is easy to manipulate that.

We look to leaders to help guide us through the confusion, but they are busy defending their fiefdoms of isolated power and are afraid to venture into the hazardous territory of encouraging people to think altruistically. If you put your own resources into the public trust, it feels like a huge risk, and it is very easy to incite fear and resentment of the undeserving masses who might benefit as a result.
posted by Araucaria at 6:42 PM on September 29, 2010 [1 favorite]


And JHarris is the winner, for finally getting my point. I was agreeing with the article, but strenuously disagreeing with Pope Guilty, because wealth inequality is far, far greater than he seems to give credit for. Only one or two percent of the country actually has any appreciable amount of non-housing wealth, i.e. wealth that generates actual income, but to hear him and others like him talk, everyone who makes more than fifty grand a year is selfish, hypocritical, and even downright immoral to assert that they can't afford to have their taxes jacked up another couple of points.

And it's that attitude, that one right there, which is why 40% of the country--a 40% in which I do not include myself--has a favorable view of the Tea Party. We're talking about middle-income Americans, mostly in the $30-90k range, who through some combination of luck, accident of birth, and responsibility have managed to avoid abject poverty but are still spending most of the money they earn on things they cannot easily do without. Housing prices have skyrocketed--and their recent collapse has been even more painful--education and health care are rising at multiples of inflation, and wages are stagnant. Yet they're told that they're rich, greedy, homophobic racist bigots who hate poor people because they don't like blatantly redistributionist government programs. I happen to think that they're a bunch of uneducated wingnuts who don't know jack shit about history, law, or economics, but there's a core of real and legitimate outrage there.

But with respect, JHarris, though I recognize that MetaFilter as an institution has no official or even unofficial political affiliation, there is no compelling argument to be made that the majority of the user base isn't significantly left of center.
posted by valkyryn at 6:48 PM on September 29, 2010 [2 favorites]


sfts2: I know I'll probably be vilified for this but here goes.

Brave.

I'd recommend consulting a financial advisor, if you don't already have one. There's a problem if you're living paycheck-to-paycheck on a $300K income, no matter where you live; either that, or your definition of paycheck-to-paycheck is not the same as my definition of paycheck-to-paycheck.

Paycheck-to-paycheck means that you have no savings. You are straddled with debt, and if you lose your job, you won't be able to pay your bills for the next month. You have no money left over for discretionary spending of any type after your bills are paid. You can't even imagine putting anything into retirement.

Paycheck-to-paycheck does not mean merely that you are not independently wealthy such that you can retire today and live off of your banked wealth.

I'm not criticizing your lifestyle, and the levels of comfort you enjoy, and want to continue to enjoy. I'm probably a little above that median-salary range myself, but I can't justify away my six-figure income as simply "middle class" because of the lifestyle I live.

I have a pretty good idea what middle class is. My parents both worked to raise four children on two salaries that barely scratched the median income of the time. My uneducated mother had to scrub floors for minimum wage so that we wouldn't be poor.

Vacations hurt, so we never went on them. When we finally did, it was a road trip cramming seven people in a van, and it was driving 24 hours straight to reach our destination (relatives in the Eastern Time Zone) so that we didn't have to pay for hotels.

When monetary emergencies came up, we all felt it. Cable television (a luxury!) was cut, we stayed home every weekend, and we ate whatever was left in the cupboards out of necessity, and not just as a PB-and-J cost-saving measure.

My first job was at 12 years old. I delivered newspapers. Why? So that I could relieve some of the financial burden of raising a child from my parents. It felt good to know that I could buy my own pair of shoes for the school year. Parents never bought me a car. Couldn't buy me a car. I rarely went anywhere I couldn't make it to on my own to feet or a bus transfer.

I guess what I'm saying is, don't mistake frugality for necessity. Poor people don't have the option for frugality. They eat the same shit every day because that's all they have to eat. They drive the same beater because their income can't even come close to purchasing a new car. They don't know what a vacation is. They can't fathom a savings account.

If you ever hear me whining about my income, I need a good hard knock upside my head.
posted by jabberjaw at 6:56 PM on September 29, 2010 [3 favorites]


This isn't anything personal...
posted by XQUZYPHYR at 5:33 PM


Heh, it's not personal, but at best I'm painfully shitty at metaphors and at worst I'm a complete asshole?

Thanks for the super insightful comment.

Life is commonly referred to as a game so you might not like the metaphor but it's pretty well ingrained into society. (thanks Milton Bradley)
Also, if people, including yourself, are going to bring in statements of what is "fair" or "unfair" I find it completely reasonable to keep calling it a game, especially when that wasn't the main point of my statement.

To those talking about with every great fortune there is some terrible action or crime behind I completely disagree. I think that's a ridiculous blanket statement that makes it easy to snowball a lot of emotions and thoughts against a particular group of people. There are plenty of people who are millionaires that are extremely hard working and honest. Just like there are plenty of people who are rich to poor who are not honest.

Anyway, my questions were sincere and I appreciate those who gave honest thoughtful answers. My entire life I've never heard the kind of sentiments in this thread were I can almost see people's blood boiling. (And yes, I've been poor before.)
posted by zephyr_words at 6:56 PM on September 29, 2010


So a compelling argument has been made here that it's not your income that matters, it's whether your income is drawn from your employment or from your assets.

How about this (note that I am not an accountant or economist, so I have no idea what I'm talking about, really):

Enact legislation that your capital gains be taxed at a rate 2 times your personal income tax rate, and the only shelter available to you, which would bring your capital gains rate down to match your personal income tax rate, is investment in a small business in which you and your immediate family have no controlling interest, and the proprietor of which has a net worth no more than 50% of your own net worth.

Reinvestment. Making America great. Supporting small businesses. Right?
posted by Pliskie at 7:10 PM on September 29, 2010


Oh for fucks sake. Is it not obvious that the problem is the concentration of wealth with a very, very few individuals and not unproven supposition that nobody making a middle or even upper middle class living wants to pay taxes? In fact, why are we even discussing personal income tax when the real problem (one I deal with every single day) is corporations not paying their fair share?

I too make a lot of money (now) but faced foreclosure little more than a year ago. Foreclosure would have meant losing literally everything and removing what little ability I have to contribute to the public good. To what end? Who does that help? Poor people? Are they the ones going to get the proceeds from a judicial auction of my house while I go into deep, deep negative equity with a ruined credit rating? Who the hell does that help? Hint: not poor people.

I pay my taxes gladly, don't cheat one bit, and would gladly pay more, much more (and in fact did when I lived in Holland). So back the fuck off telling me that I'm not willing to pay my fair share or willing to vote for people who would move the "fair share" bar to my detriment. Not all middle class people are selfish assholes.
posted by digitalprimate at 7:16 PM on September 29, 2010


The problem is there's plenty of people with money to invest, but a massive percentage of the population doesn't have the money to buy much of anything so there's to little economic activity to invest in.
posted by Zalzidrax at 7:21 PM on September 29, 2010 [1 favorite]


Hey, did anybody point out or link to the related feature in Slate - The United States of Inequality? (the slideshow, in particular, is great)
posted by UbuRoivas at 7:24 PM on September 29, 2010


I mean, let's do some transparency here. I make just over $60k a year. Less than $61k. That's an average of $5000 a month, right?*

But that's gross. After taxes and health insurance, I'm only taking home an average of $3791. Not bad, eh? But am I rich? Let's see:

- $1026 goes to Citibank for student loans.
- $717 goes to the landlord.
- $500 goes to charitable giving (10% of gross, i.e. a tithe)
- $320 goes to Toyota Financial for the Prius I'm leasing because I couldn't afford to buy even a used car.
- $200 or so goes to groceries (about six bucks a day)
- $100 or so goes to gas
- $100 gets set aside for insurance, both auto and renters
- $87 goes to Verizon for my Droid.
- $50-ish goes to AEP for electricity.
- $50-ish goes to home supplies (detergent, dryer sheets, sponges, etc.)
- $40 goes to Verizon for DSL

That leaves me $600 a month for everything else, i.e. clothes, insurance deductibles, BMV fees, potential traffic tickets, travel home for the holidays, Christmas presents, replacing dead computer hardware, the odd meal at a restaurant, everything. Am I poor? No. No I'm not. But looking at that list, I'm really not sure what I'm supposed to cut out to try and get ahead. I mean, I could probably shave $200 or so off that if I got a roommate, but I can't afford to move. I'd be a lot more comfortable if I weren't giving away 10% of my income, but criticizing me on that basis is kind of self-defeating, no? Shaving off a few tens of dollars from other budgets might be possible, but now we're splitting hairs. None of that would materially change my financial situation, or the fact that one bad car accident or severe illness could completely fuck me over.

Barring some unexpected windfall--or getting a job with a company that doesn't brag about paying above-market rates while paying in the 30-percentile range--here are some things that I won't be able to add to my budget until I pay off my student loans when I'm 45:

- Buy a house (can't save for a down payment)
- Buy a car (ditto)
- Take a non-road-trip vacation that someone else hasn't paid for (not that I really have the time anyway)
- Plan a wedding that isn't an elopement (even a family-only thing would completely break the bank)
- Have kids (I couldn't even afford to feed 'em, much less take the hit that would mean to my health insurance and clothing budgets)
- Save for retirement (my employer's offer to match 35% of the nothing I can afford to contribute is not good for morale)

I'm not talking about lavish trips to Europe, a house on the Hamptons, and luxury cars here. I'm talking about what a lot of people consider to be staples of a middle-class lifestyle being completely out of reach for me for more than fifteen years. So to those who insist that people who make what I do are rich and tell us to go fuck ourselves when we say that we're not, the most polite thing I have to say is "Eat shit and die."

Income and wealth inequality is a massive problem in this country, but the problem is that we've got a wealth curve that even a logarithmic graph would render as flat with a huge spike on one end. Everyone who has to work for a living, regardless of their actual income, has far more in common with each other than they do with the true rich, i.e. those who don't need to work.

*Actually, I get paid every two weeks, so the average is really only $4600 gross and $3500 net, which makes things even tighter on a month-to-month basis but produces what amounts to a nice little bonus twice a year. But this is something a lot of people deal with, so let's just look at the average.
posted by valkyryn at 7:27 PM on September 29, 2010 [3 favorites]


How about this (note that I am not an accountant or economist, so I have no idea what I'm talking about, really):

Enact legislation that your capital gains be taxed at a rate 2 times your personal income tax rate


Let me just stop you right there, because that's not really how capital gains works. You only pay capital gains when you have a taxable event, i.e. you sell an asset at a profit. If you buy stock at $10 and it goes up to $100, you pay no taxes unless you sell at $100. So all of these people who have millions and millions in assets don't actually pay much in the way of capital gains on anything like a regular basis, because a lot of them are just buying and holding.

The other thing is that current income produced by assets, i.e. interest or dividends, is taxed like any other income is taxed and at exactly the same rate as wage income.

If you really want to do something about this you need to impose a wealth tax, i.e. "You have to pay taxes not only on the money you earn, but on the money you already own." France apparently has the highest wealth tax in the world, and they came up with about 0.66% of the national budget in 2006 by that method.

The problem with a wealth tax is that it's viewed as incredibly toxic to investment. If I can make 4% in country A, and country B has a 1% wealth tax, if income taxes are the same I need to make at least 5% in country B or it's a bad investment. With the global mobility of capital, the general consensus--as I understand it--is that imposing a wealth tax is a surefire way to send investors headed for the borders overnight. Instead of reinvesting, you'd be divesting.
posted by valkyryn at 7:36 PM on September 29, 2010 [1 favorite]


But looking at that list, I'm really not sure what I'm supposed to cut out to try and get ahead.

If you could arrange it to get around by bicycle instead of by car, you'd have an extra $500 a month or so, according to your figures. That would almost double your discretionary income.
posted by UbuRoivas at 7:41 PM on September 29, 2010


I gross half that, have 3 kids, and my rent is $1,600. Shall we dance?
posted by Brocktoon at 7:47 PM on September 29, 2010 [1 favorite]


valkyryn: "But looking at that list, I'm really not sure what I'm supposed to cut out to try and get ahead. I mean, I could probably shave $200 or so off that if I got a roommate, but I can't afford to move. I'd be a lot more comfortable if I weren't giving away 10% of my income, but criticizing me on that basis is kind of self-defeating, no?"

I don't think most of the thread is interested in criticizing you, per se, just in not letting you pretend you're not well-off. As I said in the last one of these, I'm pretty well off too. As long as we admit that, we're moving in the right direction.
posted by l33tpolicywonk at 7:48 PM on September 29, 2010


I think people do not properly take into account costs of living in these kinds of analyses.

Well, but honestly, cost of living is to some extent chosen, isn't it? Especially if you're claiming to live paycheck-to-paycheck on an objectively enormous salary? Because trust me, there are people in the NYC metro area who cannot afford three bedroom condos, and manage to buy food, shelter, and clothing, for a great deal less than your six figure salary.

Talk to someone who's living in the NYC metro area on minimum wage, or public assistance, or disability, or a true middle-class income about cost of living.
posted by Mavri at 8:04 PM on September 29, 2010 [1 favorite]


Valkyryrn, the point is not that you have shitloads of income left over. The point is that you can afford rent, food, a smartphone, and fairly crippling student loans, plus a car lease, plus a tithe, without going into debt. I'm not criticizing any of those decisions -- see my post above for what *I* choose to spend my money on -- but the sad fact is that actually, that kind of financial situation really does put you into a privileged minority in this country. And that's terrifying as well as being fucking obscene.

IOW: it's not that you're lighting cigars with $100 bills. It's that a lot of people in this country are absolutely, positively, unremittingly fucked, so much so that your situation looks rosy by comparison.
posted by KathrynT at 8:05 PM on September 29, 2010 [1 favorite]


@callmejay: Where do I sign up to run this radio show? I am up for it!
posted by Katjusa Roquette at 8:12 PM on September 29, 2010


Jesus, valkyryn, your student loans are what's killing you. All your other expenses are pretty reasonable.

Still, you've got $600 a month left over, so that's something a lot of people don't have.

You're doing about the same as most people who make your income, though, I think. The truth is that $60K just isn't a lot of buying power these days.
posted by zoogleplex at 8:35 PM on September 29, 2010


I think people do not properly take into account costs of living in these kinds of analyses.

I think people who complain about other people not properly taking into account costs of living tend not to take into account the actual median family income in the places to which they refer. In Manhattan, it's around $50,000. In the Los Angeles MSA, it's around $40,000.

But this is a grand diversion, and nothing delights those who take the cream and half the pint than to see the professionals who graduate with a starter mortgage's worth of debt arguing the relative roughness of their economic circumstances with the working stiffs who've been led to treat the prospect adequate vacation time, healthcare and pay raises as bleak comedy.
posted by holgate at 8:49 PM on September 29, 2010 [1 favorite]


With the global mobility of capital, the general consensus--as I understand it--is that imposing a wealth tax is a surefire way to send investors headed for the borders overnight.

Also, the general consensus is that Br'er Rabbit really doesn't want to be thrown into that briar patch.
posted by holgate at 8:51 PM on September 29, 2010


I think I admitted that I was well off, and very lucky, yet not living a lavish lifestyle. As far as moving, sure, except my job prospects are concentrated in NYC, Boston, SF, or Chicago as far as the US goes. I doubt the glib assessment that I should just move doesn't scale very well for the 30 or 40 million people that live in the MSAs above. It absolutely is a lifestyle choice to a large extent, and I certainly have a lot more options than a lot (even the vast majority) of people. Rosy by comparison, no doubt - but I'm not trying to compete for the 'who has a harder life prize.'

Choice are always made, by everyone. Here's a couple of lifestyle choices I've made. I chose to pay student loans for over 20 years. I choose to live near my kids. I do have more house than I need, and am under water with it that makes sure I do not choose to sell it. I choose to pay my bills rather than save more than nominally. Heres a few more choices: I choose to contribute to my kids college. I choose basic cable - not rich. I choose basic health insurance, high deductible - not rich except I am healthy, basically. I choose to shop for only staples, very minimal luxury foods. I choose to try to find a roomate to share the expense of the house, which was bought oversized to make sure my kids had a place to stay as required. If I'm rich or even solidly upper middle class, it sure doesn't feel like it. As far as a financial adviser, sure maybe one that would advise me not to go through 4 years out of the last 10 unemployed...

MY POINT was that a) even the money that I make, does not fund a stereotypically 'rich' lifestyle that some people seem to think is so outlandish and just comes along with the salary. AND that cost of living needs to be factored in to any discussion rather than just looking at 'wealth' or 'income.' I have relatives that live in rural upstate NY that make 1/5 what we do and live a more lavish lifestyle. AND, less obvious, that the changes over the last 40 years have left many folks that grew up being sold the idea that there was upward mobility, with a lifestyle that is significantly less comfortable than what their parents enjoyed - across all spectrums of wealth. I mean I come from middle class family, put myself through an Ivy League college, worked 3 jobs and took the loans, worked 50-80 hour weeks for 25 years and basically am just treading water financially. TMI anyone? Sorry. Not feeling particularly articulate right now, maybe rambling.

The skewing of the distribution of wealth in this society is a fucking embarassment, and like many things, deserves a much more nuanced thought process than many folks are engaging in.
posted by sfts2 at 8:55 PM on September 29, 2010 [1 favorite]


"In the Los Angeles MSA, it's around $40,000."

Which, realistically, is barely enough for even a single person to support themselves properly in Los Angeles (by which I mean all bills paid including healthcare and all transportation including maintenance, and enough extra to have savings for emergencies and retirement). I say this having been a single person in LA living on less than $40K. It's fairly rough, especially if you live far away from work, which you almost always do if you make $40K.

When I think of entire families living on that or less, I am utterly appalled.
posted by zoogleplex at 8:58 PM on September 29, 2010


"MY POINT was that a) even the money that I make, does not fund a stereotypically 'rich' lifestyle that some people seem to think is so outlandish and just comes along with the salary."

Well, yeah, that's one side of the overall discussion. You're pretty much a working-class schlub like almost everyone else, yet you are in the top 2% of income.

The other side of the discussion is about how, to a family of 4 or 5 in the NYC Metro (where I've also lived on less than $40K), your level of living appears astronomically high.

With that, and the jerks like Professor Henderson who make $250-500K and whine about feeling poor and don't want to pay more taxes, it is going to be one hell of a chore to get everyone who makes between $0 and $500,000 to understand that we are all essentially in the same boat compared to the very small number of really wealthy people.

Everyone in the bottom 99 percentiles needs to understand that they've been playing, and voting/legislating, into the hands of a relatively small group that is steadily concentrating the wealth of this country to themselves. This is what the FPP shows.

If you think the statistic mentioned above about how the stock market jumped 1000% after 1980 is an accident, I think you should reconsider. US productivity did not jump 1000% during that time, which means that's when the game got rigged against 99% of us.
posted by zoogleplex at 9:13 PM on September 29, 2010 [2 favorites]


The skewing of the distribution of wealth in this society is a fucking embarassment, and like many things, deserves a much more nuanced thought process than many folks are engaging in.

Actually, "it's a fucking embarrassment" is nuance enough for me.

The nuance comes in working out just how it's possible to generate a 200-comment thread based primarily around people arguing over who has the best condiments for their sparrow kebabs. Whoever created that ideological framework is a fucking genius.
posted by holgate at 9:14 PM on September 29, 2010 [4 favorites]


hee-hee, the residents of the backcountry in Greenwich and the north shore of Nassau County will sleep well for another night, safe in the knowledge that the self-satisfied class warriors of Metafilter are busy running down people making 150K a year.

If you ankle-biters had any idea of how the truly wealthy lived, there might be that revolution some of you keep referring to.
posted by mlis at 9:23 PM on September 29, 2010


Fair enough stfs2, I know a lot of people are stuck in their homes right now. For the record, I didn't mean you should leave NYC, just move closer to work. I also didn't register that two of your kids are still in school.

I think the big issue here, though, is that people have wildly varying definitions of "lavish". Since everyone is listing their circumstances, and in the interest of transparency, here's my situation. I'm currently living on student loans, going to school full-time, and totally unable to find a job that would still allow me to finish my degree. For me, it's a total luxury to own a car at all (passed down from parents, went without for 5 years), or that I can afford to keep my internet connection up most of the time, or that I was finally able to afford a basic PAYGO cell phone. I don't have health insurance, and I don't have any savings. I rent a tiny apartment and consider myself lucky that I was able to pay the deposit at all (it was a real stretch). I am not trying to play the "my life is harder than yours" game, either. But I think it's important to understand that just because things don't "feel lavish" to you, that doesn't mean that you don't have a fuckton of money compared to most people in the world. This applies to me, too - what little I make would still be a goddamned fortune to most of the other people trying to carve out a living on this planet.

I guess what bothers me is just that you and Valkyryn (though I really don't want to make this personal, I guess it already is) both seem to believe that if you can't easily get most of the things you want, then you're not well-off. Really, for the majority of people in this country, being "well-off" simply means that you don't have to worry constantly about meeting your basic needs (food, water, shelter, health care, transportation). I just wish that people who have been more successful, or were raised in wealthier families, could understand the luxury they have simply from not having to spend sleepless nights wondering whether the rent check will clear or not, or whether their kids have enough to eat. Because this is the norm for not just the majority of Americans, but also for the VAST majority of people on the planet and in human history. Being able to afford an iPad or a $20k wedding has never been "the norm", no matter how much it might feel like it to somebody in a wealthier community. It's so easy to see the things you can't have, but seeing the problems you don't have to deal with is much more difficult. We're all guilty of this - I don't think about how lucky I am to have easy, free access to clean water every day, but I should, because in the grand scheme of things, it is really incredibly amazing and I am incredibly lucky.

All that said, I completely agree that the real wealth disparity problem is way, way higher on the pay scale, and that this conversation is basically pointless... I think people are just asking for a little more perspective about how other people live, and a little less "but I can't buy whatever I want so I must not be rich".
posted by pikachulolita at 9:39 PM on September 29, 2010 [3 favorites]


hee-hee, the residents of the backcountry in Greenwich and the north shore of Nassau County will sleep well for another night, safe in the knowledge that the self-satisfied class warriors of Metafilter are busy running down people making 150K a year.

If you ankle-biters had any idea of how the truly wealthy lived, there might be that revolution some of you keep referring to.


Yeah, that's totally the point and we are all fools for not talking about the angle you personally want to discuss, you self-important twit.
posted by Pope Guilty at 9:40 PM on September 29, 2010


Besides, I've watched Lifestyles of the Rich & Famous. It's on free-to-air television.
posted by UbuRoivas at 10:09 PM on September 29, 2010


just because things don't "feel lavish" to you, that doesn't mean that you don't have a fuckton of money compared to most people in the world.

One time when I was holidaying in India back in student days, I was visiting a private hospital - very westernised, for the upper-upper middle classes - so the staff would be accustomed to at least the idea of wealth.

Nurse: "You must be very rich, in your country"

"Uh, no...I'm a student, part time job, very little money-"

"Do you have a car?"

"Sure, but it's a beetle; very old car, very rusty. Worst car on road!"

"You have a car - you are rich. Do you have television?"

"Of course! Everybody has a TV. But that doesn't mean I'm rich. I'm about the poorest person in my country..."

"You have car, television and also international holiday! You must be very rich man..."
posted by UbuRoivas at 10:18 PM on September 29, 2010 [1 favorite]


"Really, for the majority of people in this country, being "well-off" simply means that you don't have to worry constantly about meeting your basic needs (food, water, shelter, health care, transportation)."

This.

If your household is more than one person and the whole household is making the median local income just about anywhere in the US, you are constantly worrying about meeting your basic needs.

If your household income is $100K plus anywhere in the US, you are probably not constantly worried about any of this.

If you are in that situation and you're voting in ways that keep tax cuts in place for the top 1%, you are helping to bleed yourself dry.

And yes, you're still rich compared to 95% of the rest of humanity, but that's a discussion for another day. We kind of need to get our own house in order first; the same people that are making the inequality hurt us are the ones hurting the rest of the world, pretty much.
posted by zoogleplex at 10:47 PM on September 29, 2010


postscript to my story above: I didn't have the heart to tell the nurse that even a student with a part-time job could, if they put their mind to it, save the relatively measly $1K airfare + $1K spending money for a trip like that. I think I did it in just two 60-hour weeks after final exams, with a boost from bonus pay for graveyard & weekend shifts...mmm...100% shift loading on weekends...
posted by UbuRoivas at 12:01 AM on September 30, 2010


the people who are really screwing with the income curve are celebrities, professional athletes, investment bankers (Goldman Sachs can and should burn in hell), and the very, very top tier of corporate executives... So lay off "the rich" unless you're talking about people like that.

The discussion seems to have turned quite acrimonious, but for what it's worth - when I talk about "the rich", I generally do mean people like that.

Right at the moment, I think that professionals - doctors, lawyers - are increasingly finding themselves in a position where they have a lot in common with other employees (despite their high incomes). I like professionals: you don't get to be one unless you work hard, have a brain and do something socially useful. That's good. That should be rewarded. A profession like the law, in general, is one where you can get ahead by ability. It contributes to society being a meritocracy of talent, which benefits everyone.

At the moment, in the UK at least, professionals outside of the financial services are getting hit quite hard. It's what David Simon talks about a lot in The Wire: the "death of work". Management consultancy imposing targets that people try to meet rather than skilled individuals being trusted to manage themselves. The unending mantra of "we must run this like a business", as if the standards and goals of the private sector were everywhere relevant or applicable. Doctors and teachers who are friends of mine complain about this a lot. I have seen it first hand with academics, too.

So, although I'm probably pretty far to the left of Valkyryn, I think I'd say that actually, nowadays, the class interests of an auto worker and a lawyer are pretty similar. Things have gotten to that point. Push paper or push buttons, you're still an employee.

I remember a conversation I had, once, with a genuinely wealthy man - a multi-millionaire and self-made entrepreneur. "There's this guy," he said, "Who used to let me copy his exams in university. He was much smarter than I'll ever be. Now I employ him to run one of my companies for me on £200,000 a year."

At the end of the day, really well paid people can still be workers. It's probably worth bearing that in mind.
posted by lucien_reeve at 1:25 AM on September 30, 2010


And here I thought it was a longthread before....

valkyryn: And JHarris is the winner, for finally getting my point.

What? But I didn't see that as your point?

[...]but to hear [Pope Guilty]and others like him talk, everyone who makes more than fifty grand a year is selfish, hypocritical, and even downright immoral to assert that they can't afford to have their taxes jacked up another couple of points.

I think you are considerably exaggerating PG's position. If you make 50K a year and are just squeaking by, the drains on your income are certainly high up on Maslow's hierarchy of needs, that is to say, not pressing. Meanwhile our nation's debt is gigantic. That money has to come from somewhere, and the working classes are obvious more pressed for it than those who, say, have over four grand coming in a month.

But with respect, JHarris, though I recognize that MetaFilter as an institution has no official or even unofficial political affiliation, there is no compelling argument to be made that the majority of the user base isn't significantly left of center.

I said that! It likely is left-of-center. My point, though, is that didn't happen through a selection process. The result is, among internet-comfortable people willing to pay $5 for a themeless web community, it proves liberal thought is arguably prevalent. Which means it doesn't need to be accounted for and absolutely should not be dismissed. Metafilter is not an echo chamber; it's clientele is about as representative as you can hope for.
posted by JHarris at 1:40 AM on September 30, 2010


I was lucky enough to grow up in a house with computers and have a knack for programming, so I've ended up doing pretty well. I wouldn't say I feel poor, but I certainly feel squeezed.

Assume you're 30 and want make the median income ($50k) in retirement. Let's pretend that social security will cover you for $20k of that. That means you'll need to be saving $1k per month in an investment that can earn, over the next 35 years, on average 7%. I actually think that's optimistic, I expect my generation will be lucky to see 5% - assuming that, you need to be saving $1.5k per month. The situation gets even worse if social security gets cut. And that's assuming I can work until 65 and live until 85 - god forbid I should be unable to work sooner or live longer.

So, I save $1.5k per month, with the goal of getting that up to $2k. I also expect that I'll probably spend 2-3 years or more over the course of my career out of work and unable to save. Perhaps more. So even though I make significantly more than the median income, I feel like I have a gun to my head and need to save the excess to provide for my future security.

But what kills me is that I realize I'm one of the lucky ones - how does the other 95% of the country save for retirement? With pensions a thing of the past, what's going to happen to this generation 30 years from now? Plus, I think it will be politically feasible to eliminate, or at least reduce social security in that time frame. The more I look at the numbers, the more it seems to me that we, as a nation, are fucked.
posted by heathkit at 2:38 AM on September 30, 2010 [1 favorite]


It isn't the kids' fault their parents are having money troubles, but all of a sudden it's okay to penalize them just because their parents had the misfortune to attract Pope Guilty's ire?

It's probably also worth stressing that in your hypothetical situation your children won't be suffering because of Pope Guilty.

Unless I am seriously underestimating the ferocity of his commitment to his political beliefs, the worst he will do is bluntly call you a bad person on Metafilter, which, whilst unpleasant, is not the direst economic fate that can befall a man. Furthermore, I don't think that there are many people in the world, let alone America, who share his political beliefs. The idea that liberals are responsible for the woes of hardworking folks is almost entirely a myth. Liberals are neither numerous enough nor powerful enough to have that kind of effect, at least not nowadays. Nor would they want to.

If your kids are in trouble, it has a lot more to do with republican government, the decline of labour unions and the bipartisan/Wall Street rewards directed towards the financial sector (at least according to the original Slate series of articles, here, which I assume you have read?).

Sigh. I hate the way the time differential means I'm always late to threads...
posted by lucien_reeve at 2:55 AM on September 30, 2010


I think you are considerably exaggerating PG's position. If you make 50K a year and are just squeaking by, the drains on your income are certainly high up on Maslow's hierarchy of needs, that is to say, not pressing.

I honestly wonder about this... Very often, middle-class people have very large drains on their resources that are quite hard to back out of e.g. front-loaded mortgages.

I think that the standard of living that many middle-class people aspire to is actually one that should be much more broadly available than it is (e.g. good education, reasonable amounts of living space in a safe, clean neighbourhood).

One thing I have noticed on Metafilter is a tendency for people to say - when economic issues come up - "well, you should manage your money better". This came up when we discussed hipsters on food stamps, for instance. I'm not sure that the solution to social problems is for individuals to modify their behaviour. Some problems seem to me to be structural and to demand structural solutions.
posted by lucien_reeve at 3:00 AM on September 30, 2010 [1 favorite]


My last word: This is a pretty complicated economic topic, and also, a fairly deep moral/ethical one. I don't have the benefit of being so confident in my opinions as some of you to make some of the judgements. There's no question some people (I'm just gonna discuss US) are fucked through no fault of their own, work hard yada yada yada. There is also no question a fairly large number of the people make the decisions that keep them and their families struggling economically by being willfully ignorant and willfully lazy. Some folks focus on one group, others on the other. I don't believe that its right for government to redistribute income, its should be a meriticracy with a great safety net that I have no problem paying for, (feel free to raise my taxes...*cries*). I try not rail at the type of problems caused by fundamental human nature, the way of the world, or things that I can't change. Just trying to make a positive difference in my corner, do what I can for me and mine, be human locally and charitible in my little sphere. I'm appalled by millions starving worldwide, yet in my opinion, there is NOTHING that I can do to fix this. There are haves and have nots, the strong eat the weak - way of the world. I live in the world I live in, not the world I wish I lived in. While thats the case, I'll do my best for me and mine till I'm dead, while trying to push the world I live in to be more like the one I'd want when I can.

I'd be interested to know if there is ONE suggestion, an actual practical step to do anything to fix what this thread is about in any meaningful way.
posted by sfts2 at 4:04 AM on September 30, 2010 [1 favorite]


Maybe some added perspective will make me look like less of an asshole. Probably not to the people who are determined to believe that I am one regardless, but one has hope that they are in the minority.

If you look upthread, you'll see that I'm paying over $1000 a month in student loans. I only managed to get it that low by kicking out the repayment period to over 20 years for a good chunk of that debt. That debt is, at this point, almost entirely from law school. The job I got after law school pays $60k a year.

Which is three times what I was making before I went to law school working three part time jobs. I taught three classes at a private school, worked second shift at a hotel, and covered the municipal government beat for some hole-in-the-wall weekly newspaper. Those three jobs together brought me home just under $20k, of which I paid $2k in taxes, mostly payroll. I think I probably qualified for the EITC.

Fast forward to 2010. I'm now making $60k, three times what I was grossing in 2005. But I'm paying almost $15k in taxes, more than seven times what I was paying then, due to our lovely progressive tax structure.

I'm actually more or less okay with this. The government has got to get its money from somewhere, and the only realistic way of raising any actual revenue is by taxing the middle class, i.e. me. Sure, the rich make a bunch of money, but there just aren't enough of them to support even a decent fraction of federal outlays.

But I'm not okay with the idea that I can easily shoulder an additional tax burden and deserve criticism for resisting that idea. My income is solidly in the middle 50% of earners, I'm already paying a quarter of my gross in taxes, and the only way I was even able to get where I'm at was by taking out more than $100k in student loans.

Our tax structure is progressive enough as it is--though I'd be completely okay with adding additional brackets, up to 50% starting at $500k or so. Hell, I'd even be okay with more than that over $1 million. But I'm under no illusions that this is going to do anything to help our current fiscal situation. Taxing a hundred people a million dollars will get you less money than taxing a hundred million people a thousand dollars.
posted by valkyryn at 4:17 AM on September 30, 2010 [1 favorite]


just speaking for myself, but my contempt for most wealth (in the sense of disregarding it as an indicator of worth) stems largely from the fact that most of the really big fortunes made in America today are made in the air-castle construction business. Funny thing about air-castles is that you can only live in them if you're wealthy, but when they fall the rubble crushes the homes and lives of real, not-wealthy people.
posted by lodurr at 6:27 AM on September 30, 2010 [1 favorite]


But I'm not okay with the idea that I can easily shoulder an additional tax burden and deserve criticism for resisting that idea.

I'm not aware of any significant plan or proposal that would have you pay more taxes. All of the proposals that involve increased taxes of which I'm aware start at $200 or $250K.

Take the collected wealth of the U.S. and distribute it evenly to everybody. Last I read that'd be about $3,000 for each man, woman, and child.

This is actually not that hard to figure out. The total assets of the US economy were as of 2009 about $188 trillion; you can find this by googling for "total assets us economy." So dividing that collected wealth up would give every resident of the US about $612,000.
posted by ROU_Xenophobe at 6:41 AM on September 30, 2010


To clarify my stance on the "middle" class: of course I would define middle as a range, and not just the set median amount of money made in the US.

I would also like to point out that class =/ money. Money is one signifier of class, but there's a reason why if you're a plumber and you win the lottery, you're still pretty much "working class." Having gone to hippie college wherein the curriculum was "Gender gender gender gender race class gender class and race," I learned that class isn't just about your tax bracket, but about your social standing as well.

A lawyer who makes $40,000 has a much different social standing than a nurse who makes the same amount of money. Education level contributes to class status. If you have more than a bachelor's degree, you're not middle-class. If you have a professional degree such as a law degree, MD, or MBA, you're not middle-class. Family history also contributes greatly. If you were raised by doctors and you decide to go and join the circus, you're not coming to that decision from a middle-class background.

And really, there's nothing wrong with this. There's nothing wrong with not being middle class. That's one of the effed up things that's going on here, is that no one who is in the upper class will admit it. It's a sort of reverse-elitism wherein everyone wants to be the "Everyman." I'm sorry, if you went to law school, you're not. And that's fine! That's good for you! But don't be disingenuous about it and say "I'm middle class just like a school teacher" because it's just not true.

As I say, I consider my own life to have been fairly privileged and I will never earn $60K/year. I'm not saying this to look down on anyone, I'm saying this to acknowledge that my experiences have been good and that I've had a fair amount of luck that a lot of people haven't had. It doesn't mean I'm better than a plumber, it doesn't mean I'm worse off than a doctor. It means that I recognize my class privilege for what it is rather than looking it horse in the mouth and claiming to be "broke."
posted by sonika at 6:51 AM on September 30, 2010 [1 favorite]


sonika, I agree with everything you've said except that there are several masters or post BA degrees that still land you in the middle class. A masters in nursing, physical therapy or public planning, usually gets you a government job making a pretty solidly middle class salary ($30k-$40k maybe $60k if you're lucky). They also don't come with the prestige. A nurse with a masters is still a nurse not a doctor.
posted by stoneweaver at 7:53 AM on September 30, 2010


So, Valkyryn, after increased taxes and your student loans, you are netting, in real terms, roughly 175% of what you netted working three part time jobs. I can only presume that you had a bachelor's when you were netting $18K, correct?

This right here is the problem, folks.

Educational inflation has gotten insane. I see ads all the time looking for full time employees with not just any bachelor's degree, but a specific one, and they want to pay $11 per hour.

And education is expensive. If you take out student loans to get ahead, you end up starting off in the hole. This is a problem on many, many levels. Cash flow, debt to income ratio, mental health.

My buddy R, his dad was a millwright at one of the more rural Ford plants. Now, with a 2 year degree, that the company paid for after he got in, at one of the lower paid plants, the location of which afforded him a lovely rural lifestyle, he made $100,000+ throughout the eighties and nineties. Higher yet in the early 2000s. He's retired now. He owns a couple houses, as in owns, free and clear. I think he might have additional rentals with mortgages, but I'm not sure. He put his wife through school after their kids were grown, and she's a MSW.

These opportunities don't exist anymore. Hell, R, the friend that is my age, he got into that same Ford plant, and that's like winning a lottery ticket. Nonetheless, R has had to accept fewer benefits, working in an urban plant (the rural one sold), decreased skilled trade opportunities, and far less job security. And it's STILL the best deal around.

Say what you want about free lifting all boats, and netting more profits, and spreading wealth around the globe, and fostering peace. That all may well be true. But the simple fact is that manufacturing, simple craftwork writ large, was the single thing that created the middle class. When we sold it down the river, and decided to instead base our economy on services and finance, we gutted the middle class. And that is a scary thing, not just for those of us hanging on by our toenails, but for democracy as a whole. A second Gilded Age doesn't bode well for our political system.

I sincerely hope my kids don't go to high school. I won't forbid them from going, but a bright student can do college work, especially community college, at high school age. And in my state (as well as FL, and a few others), if you are under 18, you can go to any public college for free- the state will pick up the tab. They also get free uni tuition through their dad, but hopefully the first 2 or 3 years of credits can be accumulated throughout the high school years, so that they can pursue a master's in their late teens/early twenties, if they choose to. Because the adult years we spend in college aren't just expensive, they come at a great opportunity cost of money we could be earning. (Some high schools are doing this already- you graduate with an associate's degree. But that's still considered very avant garde where I live, so I doubt that will be an option when my stepson starts high school in two years.)

And they way the system is set up now, where highly educated young professionals like Valkyryn still worry about paying the bills, this is neither a workable nor sustainable economic/educational system. I hope my kids will choose to do something differently.
posted by Leta at 7:57 AM on September 30, 2010 [6 favorites]


sonika, I agree with everything you've said except that there are several masters or post BA degrees that still land you in the middle class. A masters in nursing, physical therapy or public planning, usually gets you a government job making a pretty solidly middle class salary ($30k-$40k maybe $60k if you're lucky). They also don't come with the prestige. A nurse with a masters is still a nurse not a doctor.

Yes, very true. I was speaking generally, but yes, absolutely there are exceptions.
posted by sonika at 7:58 AM on September 30, 2010


valkyryn: I don't think you're rich either. And statistically you're smack dab in the center of the middle class. No one (who is sane or reasonable) is saying you're the one to blame here. I personally am saying we need to make a lot more people like you by shifting money from those people waaaaaay out of sight above you down to those people clinging by their fingernails below you. Which I suspect you and I totally agree on. Mainly it seems to be a quibble about where the line is drawn.
posted by rusty at 8:00 AM on September 30, 2010


metafilter: snort! (dammit)
posted by dprs75 at 8:08 AM on September 30, 2010


That's an important, but different, issue. What I was saying is that the very top 1-2% force the scale to be warped to represent them, such that you can no longer see the relative difference between the others.

It's like the mega-rich are on a logarithmic scale while regular people are on a linear scale, if that makes any sense.


You're absolutely right that the graphic doesn't even represent anyone but the super-rich precisely because their wealth is so vast compared to everyone else.

I believe, in fact, that this is the entire point of the graphic. Adjusting the graphic so that this is less obvious would be ineffective because it would lead people to read the graphic incorrectly. Instead of taking away an understanding that the vast population is literally inconsequential to the power structure in this country (i.e., in terms of wealth, the disappearance of literally millions of people would mean absolutely nothing), people would take away an incorrect understanding that their existence is meaningful.
posted by odinsdream at 8:14 AM on September 30, 2010 [1 favorite]


sonika: "I would also like to point out that class =/ money."

I like your examples of social signifiers, but only to separate between the less monied (poor) class and middle class. Education is a great signifier. But what about social signifiers for the monied class? If you met someone who had a Bachelors degree and whose parents were an accountant and a homemaker, are they middle class or elite? You don't know. It could be Bill Gates or Warren Buffett or it could be your lawyer/nurse/teacher. You have to find out how much money they have to know if they are "upper" class.

I don't know of any social class signifiers that are accurate for the split between middle class and "upper" class, which is why I argue that the only way to tell someone's class is through money.

Anecdote: I know employees at a wealthy family's office. The employees drive the same cars, go to the same schools, live on the same street as the wealthy. Social class-wise it is hard to tell the difference between the rich and the employees. Of course, when you look at the bank accounts you can tell.

So, perhaps the biggest signifier is whether you *have* to work or not?
posted by acheekymonkey at 8:23 AM on September 30, 2010


I don't know of any social class signifiers that are accurate for the split between middle class and "upper" class, which is why I argue that the only way to tell someone's class is through money.

I beg to differ.

As I say, education is a huge status marker. You mention someone with a BA, but if that person goes on to get a PhD - yes, they came from a middle class background, but they have now entered at least the "upper middle" class if not the upper class. Class, unlike race, can change. You can go from poverty to wealth in one lifetime. Not many people do, but it's totally possible.

If you receive more education, you ascend in class. You ascend in your career from manager to CEO, you ascend in class.

The only reason the lines between "middle" and "upper" class are so blurred is that so many people who are upper class (lawyers, doctors, professors) are only looking at their finances and don't take social standing into account and incorrectly view themselves as middle class. Others in the middle class would beg to differ. Those in the working class would really beg to differ.

PDF alert: Class Privilege Checklist helps make it clear what types of things signify class and when class privilege shows up in daily life.
posted by sonika at 8:34 AM on September 30, 2010 [4 favorites]


JHarris: "But where does the average fall in that continuum? Because he's talking about mean wealth, not median, the wealth of extremely rich people, including the obscenely rich 1%, would skew such a chart far to the left. As a result, far more than half the population of the U.S. have less than average wealth. These kinds of extreme power curves can make talk of averages misleading, and that itself skews people's expectations of what the income spread should look like... which, in a way, is the Slate article's point."

To expand on that point a bit, because it is really bugging me, let's look at the numbers. The bottom four quintiles, i.e. 80% of the population, has 7% of the non-housing wealth. So, on average, the bottom 80% of the population has 9% of their mythical share of the wealth. The top quintile, minus the 1% of the very richest, have 263% of their share. Those people who aren't really rich, according to valkryn, have 29 times the average wealth of those below them! You know what they say about lies, damn lies, and statistics.

valkyryn: "That isn't all that far out from most people's estimates of what a reasonably equitable distribution ought to look like."

That's laughable on the face of it and completely ignores all the data in the article (and the study that the article is based on). One of the major conclusions of the study was that Americans' perception of what an ideal wealth distribution would look like are very different from the actual wealth distribution (and, of course, that Americans' perception of the actual wealth distribution is very different from the actual wealth distribution).

The study clearly shows that the current wealth distribution is very far out from what most people estimate is reasonable! They even have brightly-coloured charts to make that point more clearly. The fact that you'd make up hand-wavy statements about what most people think that directly contradict the actual study, with real data, that we are talking about neatly illustrates so much of what is very weird about the psychology of American wealth distribution. The cognitive dissonance is clearly too much, so we just have to ignore the data staring us in the face and make up something to better suit our preconceptions.

Finally, it bears repeating that almost everyone living in the USA is extremely rich by global standards. Let's not forget that.
posted by ssg at 8:34 AM on September 30, 2010 [1 favorite]


Social class-wise it is hard to tell the difference between the rich and the employees.

Actually, from your own example, it's not. Those who are the employees are of a lower class status than their employers. You just said that.

Class isn't necessarily a black/white thing. There are, of course, gradients and it's more of an individual comparison than a group comparison (such as race). You can have certain class privileges (high paying job) but not others (still in a lot of debt). The thing that the very title of this post is pointing out is that everyone thinks that they're middle class and a lot of people are overlooking aspects of their lives that actually place them in a higher class.
posted by sonika at 8:37 AM on September 30, 2010 [2 favorites]


Our tax structure is progressive enough as it is

>>> "... Income taxes have marginal rates around 36%, but taxes on sources of wealth like the capital gains tax are only 15%, so if you are a relatively well-off wage earner, like a doctor or a lawyer, you pay a large portion of your income in taxes. But, if your income comes from earnings from your investments (which is almost exclusively how the wealthy live), then you pay less than half of what wage earners make. This seems incredibly unfair to me."

How can a system that taxes income from work more than income from investments be considered "progressive"?
posted by mrgrimm at 9:54 AM on September 30, 2010 [3 favorites]


Back during the Eisenhower administration, taxes were like 90% after 3 million. And Eisenhower was a Republican.
posted by Goofyy at 11:16 AM on September 30, 2010


I work at a software company that also has an office in India. Two of our Indian workers, who presumably have much lower salaries than I do in absolute terms, are currently visiting our office here in California. We were talking about cooking at home, and it turns out none of our Indian employees actually do this. They all hire personal chefs to come to their homes several times a day and cook for them from scratch. They can get 3 meals per day homecooked for about $50/month.

You realize this is because of the legacy from the labor-based caste system? These aren't "personal chefs" doing the cooking, like Wolfgang Puck coming up to your house for $50 because money goes further there and there are trained cooks who live comfortably on that much. It's poor people who are servants and were born into the class that is extremely, extremely poor and they have no hope of ever becoming upwardly mobile at all. We had people who did our laundry and cooked and cleaned, but they were born in a caste and class that will never be able to rise up because the caste system is/was labor based (the untouchables were untouchable because they worked cleaning streets and sewers and bathrooms, all considered very dirty. In fact, some people don't even want lower caste people touching their food, even if it was their ancestors working sewers and bathrooms.

If you haven't thought about that (which your colleagues wouldn't bring up because we don't want to discuss how we benefit from the work of lower castes with white people), then you really need to. I'm sure they also wanted to share with you details that made it seem like they were living large because when you grow up there, you think Americans think you're poor and you have to point out that you aren't one of the starving in the images of India Americans were so familiar with. So I'm sure they stretched the truth of it, very effectively, it seems. You want to benefit from the economic and social misery of others?
posted by anniecat at 3:24 PM on September 30, 2010 [1 favorite]


The study clearly shows that the current wealth distribution is very far out from what most people estimate is reasonable!

I would contend, as I laid out above, that this doesn't break the data down far enough. Nineteen of the top twenty percent of Americans have, on average, about as much wealth as the survey indicated Americans think they should have. The top 1% has way the fuck too much, which skews the entire average for the top twenty. But if you made the top 1% look like the next 19% and gave that wealth to the bottom 80%, you get a curve which looks something like the "ideal".

Note that the study only gave people three choices: the current situation, complete and total equality, or Sweden. This sort of calls into question how much weight we can put on what Americans actually want.
posted by valkyryn at 3:24 PM on September 30, 2010


Back during the Eisenhower administration, taxes were like 90% after 3 million.

$3 million in 1961 dollars is $21.2 million in 2009 dollars. Which doesn't change the fact that there's still a 90% tax bracket, but makes that bracket a lot higher.

Still, I don't actually think I have any problem taking 90% of the money you make over $21.2 million. No problem whatsoever.
posted by valkyryn at 3:27 PM on September 30, 2010


Nineteen of the top twenty percent of Americans have, on average, about as much wealth as the survey indicated Americans think they should have.

No, they don't. They have 50% of the wealth. 47% preferred the Sweden distribution (top 20% have 36% of the wealth), 43% prefer the equal distribution, and only 10% prefer the actual US distribution (top 20% have 84% of the wealth). If you weight those, you would arrive at the top 20% having 30% of the wealth (and the top quintile minus the top 1% having a fair bit less, no doubt). You are stretching the truth far past the breaking point here and I think you know it.

Note that the study only gave people three choices: the current situation, complete and total equality, or Sweden. This sort of calls into question how much weight we can put on what Americans actually want.

I think the survey made it pretty crystal clear that Americans wouldn't choose the current distribution, by an overwhelming majority. What part of that do you want to call into question?
posted by ssg at 5:25 PM on September 30, 2010


You are stretching the truth far past the breaking point here and I think you know it.

No, I'm not, and no, I don't. I consider those results to be in the general ballpark, especially when you take into account the vast unbalancing effect the top 1% currently exerts. You can disagree with me if you like, but there's no need to get personal.

Look, guy, I am not defending the status quo. I'm saying that the problem with the status quo has far more to do with the top 1% than it does with the next 19%. What's your beef?

What part of that do you want to call into question?

That there might be an option between equality and Sweden, or between Sweden and logarithmic inequality, that Americans would prefer. Heck, you want real validity to your results, let the poll respondents write in their own preferences and see what you get. The false dichotomy--okay, trichotomy--the poll presented is one of the classic ways that pollsters who want to get a particular result can manipulate the respondents by limiting or biasing their choices.
posted by valkyryn at 5:33 AM on October 1, 2010


What's your beef?

You are doing a lot of hand-waving "general ballpark" bullshit to try to hide the fact that your top quintile minus the top 1% still control 50% of the wealth. You may not be defending the status quo, but you are lying about the results of this study to defend some other, still highly inequitable wealth distribution, which the study clearly shows Americans do not want.
posted by ssg at 6:35 AM on October 1, 2010


but you are lying about the results of this study

And with that, the possibility of a good faith discussion just went out the window. Have a nice day.
posted by valkyryn at 7:11 AM on October 1, 2010


madcaptenor: (disclaimer: I teach stat so I might be a bit biased.)

Well, you always have to adjust for bias in statistics.
posted by Rarebit Fiend at 7:43 AM on October 1, 2010


valkyryn, I'm hearing this:

I'm saying that the problem with the status quo has far more to do with the top 1% than it does with the next 19%.

Which to me is saying something like: Don't look at the rich! They've earned every cent they have! It's not their fault! Look at the super-rich! They haven't earned shit! They're the source of inequality!

Your argument that the bar for what passes for middle-class should be lower (or higher, in terms of yearly salary) is not a bad argument. It's a tough sell, though, to tell people making $50,000 a year that people making $300,000 a year are kind of just scraping by.

I'm just wondering where you propose setting the bar. $1,000,000? Everything under $1,000,000 a year is middle class, and not wealthy?

I think it proves the point of the article: everyone in America thinks they're middle class, from the guys making $12,000 a year to the guys making $1,200,000 a year. Nobody's rich, except for the assholes with billion-dollar bank accounts, and nobody's poor, except the guy that lives under a cardboard box.
posted by jabberjaw at 7:46 AM on October 1, 2010 [5 favorites]


Still on the somewhat related tax derail.

The tax code is something like 16,000 pages. By the very nature of its complexity, only those who can spend thousands of dollars on experts can follow it to their best advantage.

That's one of the only reasons I would support a flat tax. Sure, it's unfair that someone making $1M/year pays the same rate as someone who makes $20,000/year. But right now, the million-dollar-earner can be paying a lesser rate than the person earning $20,000, and not only because of the capital-gains disparity.

I once spent a weekly school "interim" period shadowing a financial consultant who was a major theme-park investor. He told me his tax burden every year was $0. (He could have been lying, but I have no doubt that there are tax shelter and dodges that are only available to rich people.) He drove a fancy car and had nice suits and an office in a fancy building. It could have been a charade, but he certainly seemed rich.
posted by mrgrimm at 11:50 AM on October 1, 2010 [1 favorite]


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