Andy Boardman: It’s not just about the one percentHave you seen the report highlighted recently by the Economic Progress Institute? The Institute draws attention to the growing rift between the top one percent and the other 99 percent of Rhode Island’s income distribution, noting that inequality between these two groups is far more pronounced now than in decades prior. Simply put, the data is staggering. But the decision
Published on August 2, 2018
By Andy Boardman
Have you seen the report highlighted recently by the Economic Progress Institute? The Institute draws attention to the growing rift between the top one percent and the other 99 percent of Rhode Island’s income distribution, noting that inequality between these two groups is far more pronounced now than in decades prior. Simply put, the data is staggering.
But the decision to draw the line at the top one percent is an arbitrary one, politically popular and bumper-sticker-ready as it may be. If we examine the national distribution of those in the one percent, we find that incomes of the top 0.1 percent are increasing far more quickly than those of the other 0.9 percent, while the top 0.01 percent’s growing share of wealth is leaving behind the rest of the 0.99 percent. In the other direction, the average national income of the top twenty percent less the top one percent rose by 70 percent between 1980 and 2013 while the bottom 80 percent’s income grew only by about half as much.
By separating the wealthy elite from ‘the rest of us’ at 99 percent of the income distribution, we overlook the ways the other 19 percent of the top quintile–the upper middle class, roughly speaking–are also veering away from the low-income and the middle class. Policy practices like exclusionary zoning and inequitably-distributed tax breaks allow the upper middle class and one percent alike to stockpile resources and fence opportunities off from the rest of Rhode Islanders. Taken together, these policies and others create a phenomenon economic philosopher Richard Reeves calls “top stickiness”: the chances of staying in the richest twenty percent of the income distribution once one gets there (or if one has the luck of being born there) are increasingly high, but fewer and fewer are able to break through.
The stickiness of the upper middle class is no accident, and serious consideration should be given to phasing out public policies that allow those in the top twenty percent to capture our economy. To reduce economic stratification and make Rhode Island’s economy fairer, we can’t afford to ignore the upper middle class.
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