Andy Boardman: It’s not just about the one percent

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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About Andy Boardman 9 Articles
"Andy Boardman is a policy advocate who frequently writes about economic matters in Rhode Island from an egalitarian perspective. He can be found on Twitter at @_andyboardman."

3 Comments

  1. Exactly; or, at least much closer to the truth.

    54% of people in the U S are invested in the stock market. That means that 46% are not. 46% is awfully close to Mitt Romney’s “the 47%”. Less than 1/3 of the bottom 50% is invested in the stock market while 94% of what CNN money terms “the top income group” is. A third of workers do not have access to a 401k.

    I think the term “bottom feeding” is an appropriate description of the current U S economy. So many are so dependent on the exploitation of cheap labor for their wealth and security. Whether it’s Democrats catering to finance – Goldman Sachs and GE, etc – or the Republicans catering to the extraction industries – Koch Industries and Exxon, etc, the goals are the same for the opposing teams, Democrat/Republican. Their only obligation is to the stakeholders, i. e. each party only represents the interests of particular industries whose only obligation is to their shareholders. That creates perverse incentives for government, non-profits, pension systems, and the like to keep those at the ever growing end of the low end of the economic spectrum on the treadmill they’re on. The so called “activist investor” has made efficient exploitation a matter of morality.

  2. Andy, be more specific about which public policies we should be phasing out. I’d like evaluate our chances of doing that
    I’ve been raging about this 20%-80% future ever since Tyler Cowan’s NPR intervoew with Tom Ashbrook on h is book Average is Over.

  3. Very true. The middle class continues to shrink and move further and further up the economic tiers away from “the middle”. Unfortunately, too many of these elites really don’t want to mix with the rest of us. And some of the rest of us would rather be those elites rather than making life better for the lower 50 to 80%.
    Ironically this may be a most sizable problem in blue states, suburbs, affluent city enclaves…

    Segregation exists in full force and many, many people across the political spectrum are committed to it.
    Uncomfortable conversations, but so important if we’re going to get society to a better place…

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