10 ms·

The ‘semi-rich’: Millions of high-income Americans may not feel wealthy but are

47 points by rainhacker 5y ago

1cvmask 5y ago
Well they are in circles where they feel decidedly poor. Just see the excesses in the Bay area and come out feeling real poor even if you are in the 1% income bracket. Of course everything is relative and you might need 50 years income to buy a place that would be considered awful in Iowa.
- dcolkitt 5y ago
  Most of those people in the Bay Area are not forced to live in the Bay Area. Most have fairly portable professional skills that they could bring to a lower cost area. They might take a pay cut, but they’d still certainly be among the highest income circles in Iowa. There’s two primary reasons they choose to continue to live in the Bay Area. One is they value the amenities of the metro. Many view Iowa as a terrible fate, even if they are living in a mansion. In this case, they may be “living poor” in terms of housing, but only because they choose to spend most of their income on the luxury good of Bay Area living. Same way, I wouldn’t be crying for a high income guy who’s always broke because he spends all his money on his boat. Second reason people live in the Bay Area is because it gives them access to very high paying career paths. Even if it’s a bad deal for an L2, by the time they make L6 at Google, their living standards will be much higher than what they could earn in Iowa, even given the cost of living. This group is best thought of as sacrificing consumption today to invest in their human capital. Much like medical residents, while they’re low paid today, they’ll be very high paid in short order. Again, we really wouldn’t feel two bad about medical residents having to drive a used car for a couple years while they rocket up the career ladder.
  - aftbit 5y ago
    I feel a lot worse for a medical resident than I do for a Google L2. There are arguments for paying newcomers to skilled fields less, but we shouldn't pay people abusively low wages for physically and emotionally draining work.
  - opportune 5y ago
    The third is that if you live frugally in a super expensive metro, your absolute savings rate can be much higher than it would be in rural Iowa (well, covid changed that a bit, but most companies still have “COL factors” on your comp). This is truer for single people, who can live a low impact lifestyle in a studio or 1bed apartment, no car, and taking advantage of office amenities than it is for families.
    - RhysU 5y ago
      This. Saving, say, 10% of income is a whole different game in a HCOL area vs saving 10% in a low one provided that one retires outside of the HCOL area.
- ctdonath 5y ago
  So cash in and move. I keep seeing examples of Bay Area "awful", and note that one can get a lakefront McMansion within a 30 minute drive of Atlanta for the same price. Too many wallow in the "feel" and don't leverage their opportunity. (Yes, I moved 1000 miles. I know the pain of leaving it all behind, and the joy of 2x the house for 1/6th the taxes and more job opportunities.)
  - elefanten 5y ago
    "more job opportunities" is the pivotal one. I don't think most people can check all those boxes together. If you're coming from big tech or big startup in Bay Area, it is unlikely you will find "more [acceptable] job opportunities" in a significantly lower col area.
    - erik_seaberg 5y ago
      This. I moved here from Seattle in 2006, and immediately had 10x as many inquiries from recruiters. Local salaries more than made up for the ridiculous rents here.
droopyEyelids 5y ago
Article seems confused about the difference between 'wealth' and 'income'. It has to be tough trying to write about complicated topics while staying under a 'fourth grade reading comprehension' ceiling, or whatever the target is. How confusing the world is when you have to stick to the 'ten hundred' most common words and concepts. (ten-hundred from XKCD) https://xkcd.com/thing-explainer/ https://xkcd.com/thing-explainer/
- ctdonath 5y ago
  If you own your home, and are otherwise completely out of debt, you can live much better on far less income. Income doesn't mean much if most of it is going toward debt service. Anecdote: Trump had an epiphany when he realized a bum on the street was literally worth more than he was financially.
- theonemind 5y ago
  I've found a slight modification of the ten hundred word concept pretty useful when/if I want to write a simple explanation. Sticking rigidly to 1,000 words introduces its own problems, but judicious use of the principle usually turns out a pretty nice result. I start with the ability to use those 1,000 words freely, and if I want to use a word not on the list, I consider carefully whether the value in introducing it outweighs the cognitive overhead, and/or if I can use words already in the list without loss of meaning, and generally allow words I've used at least once to get used again (so the list grows once I've decided that I really have to use a word not on the list). Additionally, no jargon at all appears on the list, so I often explain a jargon term in terms of words on the list or that I've added to the list, then add the jargon word to the list and keep using it going forward, so it serves as a canary-in-the-coal-mine for terms I should explain rather than start throwing around without thinking about it in that way as well. It can turn out a surprisingly clear result that doesn't even show much sign of having started with a limited amount of words. It doesn't seem dumbed-down or vocabulary impaired, just easy to read (given that I do use any word that really seems to decrease the complexity of the explanation or cognitive overhead.) It takes some time, so I didn't do it here, but if I did, this explanation would be clearer!
jorblumesea 5y ago
When a healthcare bill could bankrupt you easily, hard to feel secure with even millions in the bank. Americans are right to feel exposed.
- YetAnotherNick 5y ago
  Why depend on a bill? You could buy insurance with the interest of millions in bank.
  - mmcconnell1618 5y ago
    In the United States, private health insurance often includes a lifetime cap on coverage of certain conditions. Before the ACA was passed under President Obama, many policies would not cover pre-existing conditions. Insurance companies no longer deny coverage for pre-existing conditions but there are no price controls on premiums. It is very conceivable to end up with a multi-million dollar healthcare bill in the United States, even with a good private health insurance policy. Insurance reduces the chances of that happening but it does not guarantee freedom from the chance of a medical bankruptcy.
    - ctdonath 5y ago
      Healthcare providers will work out manageable/fair billing and payment plans, if the patient will simply take the initiative to discuss it. They're just not going to advertise the fact.
    - refurb 5y ago
      There are no lifetime caps any more. You seem worried about things that don’t exist.
      - mmcconnell1618 5y ago
        The limit on lifetime and annual caps only applies to "essential health benefits" which gives insurance companies the ability to deny first and force the insured to fight to get payment. Grandfathered legacy policies are also allowed to maintain lifetime bans. https://www.hhs.gov/healthcare/about-the-aca/benefit-limits/index.html https://www.hhs.gov/healthcare/about-the-aca/benefit-limits/...
unpolloloco 5y ago
Another article talking about the same thing: https://www.vox.com/the-goods/22673605/upper-middle-class-meritocracy-matthew-stewart https://www.vox.com/the-goods/22673605/upper-middle-class-me... The interesting point that this one misses is that the children of this class are often not counted as part of the 9.9%, but are effectively part of it nonetheless because of the backstop an benefits that the 9.9% confer onto them. And their beliefs, etc. are pretty well in line with the 9.9. So really, it's more like the top 20% that's in this category, even though it doesn't look like it on paper.
Tehdasi 5y ago
"The net worth of that group ranges from about $1.2 million to $20 million per household, Stewarts says." In Australia apparently all you have to do to get into this group would be to actually own a paid off house. :/ I think this says far more about housing then wealth inequality though.
- sriram_sun 5y ago
  In America, paid off or not, the location of your house pretty much guarantees a lower bound on your kid's future in the richer neighborhoods and unfortunately an upper bound in many poorer ones.
  - dcolkitt 5y ago
    Decades of twin studies have consistently shown that family environment (which by definition includes the zip code you’re raised in) has nearly zero causal impact on adult outcomes in America. Yes, it’s true that kids from well to do areas grow up to become well to do. But twin studies tell us the mechanism of heritability is entirely genetic.
    - sriram_sun 5y ago
      location => zip code. Twin studies are not what you look at to prove (or disprove) this hypothesis. You have a much richer data set. All the kids that grew up in a zip code. A lot of twin studies have no control groups! With a richer data set, you can more easily look at the zip code someone grew up in and look at where they end up in life. You don't have to track them. Also, the reason why I insist on focusing on zip code is that peer groups matter much more than family environment. Below, I've linked some of the articles I have read on this in the past. Here is a book pointing out various issues with twin studies: https://dl.uswr.ac.ir/bitstream/Hannan/139363/1/9781138813069.pdf https://dl.uswr.ac.ir/bitstream/Hannan/139363/1/978113881306... https://www.brookings.edu/opinions/americas-zip-code-inequality/ https://www.brookings.edu/opinions/americas-zip-code-inequal... "Today, the state of the American Dream—the ability of anyone to work hard and get ahead—largely depends on one’s zip code." https://talkpoverty.org/2015/12/17/american-dream-zip-codes-affordable-housing/ https://talkpoverty.org/2015/12/17/american-dream-zip-codes-... https://www.forbes.com/sites/michaeltnietzel/2020/01/02/solving-higher-educations-zip-code-problem/?sh=3b0a26f023f3 https://www.forbes.com/sites/michaeltnietzel/2020/01/02/solv...
k__ 5y ago
I checked once and seemingly I belonged to the richest 10% of Germany. Didn't feel that way.
- brnt 5y ago
  People consistently suck at intuiting power laws. Same as with the one percent: who we should go after are the one percent of the one percent.
pedrosorio 5y ago
"The net worth of that group ranges from about $1.2 million to $20 million per household, Stewarts says. Those assets include cash savings and investments, as well as real estate. Many members of the 9.9% don’t feel enormously wealthy but they are still doing better than the vast majority of the country." A household with $1.2M in assets does not belong to the same group as a household with $20M in assets.
- YetAnotherNick 5y ago
  Lifestyle with $1.2M in asset is not wildly different from $20M in asset
  - CheezeIt 5y ago
    One isn’t retired, the other is.
  - randomhodler84 5y ago
    I really don’t think this is the case. One is owning a house, and probably still working. The other is owning a house and other passive income sources, probably enough that you don’t need to work. There is a massive gulf between a million and 20 million dollars.
    - dcolkitt 5y ago
      I’m virtually certain that if you compare hours worked among households worth $20 million and households worth $1.2 million (controlling for retirement age), the former is significantly higher. In theory ultra high wealth buys the luxury of leisure. In practice, in the US today, leisure monotonically decreases with income and wealth. By far the bottom quintile works much fewer hours than the top 1%.
      - blacksmith_tb 5y ago
        Wouldn't that be axiomatically true, given that the bottom quintile would contain all of the unemployed?
RNCTX 5y ago
I'd say the author of the article doesn't have a very good grasp of this concept. There is a vast difference between, as she says, "1.2 million" and "20 million." 20 million is "screw you" money. In that someone could quit everything they do, and live their whole life very comfortably on the wealth they have in hand, by paying cash for their house, setting aside a million in rainy day money, and putting the rest into very low risk bonds. 1.2 million is just enough money to get someone in trouble if they make a few mistakes. Buy an expensive house in the wrong place? Not a millionaire anymore. Ill-timed stock returns that turn south around the first of the year? Not a millionaire anymore. Try to start another business that doesn't pan out? Not a millionaire anymore. There's a million ways (pun intended) for someone with 1.2 million dollars to find themselves fast running out of money. Someone with 20 million? Not so much.
jjoonathan 5y ago
Hey, look -- the 0.1% are seeing tax proposals on their radar that might actually land on them for once. Quick, to the propaganda cannons! Deflect those taxes, make sure they land on the upper middle class instead, like the last 10 times this happened!
- ChuckMcM 5y ago
  It is hard not to be this cynical but I was thinking the same thing.
- buildbot 5y ago
  This 100%. I expect we will see a lot more of these articles
  - rootusrootus 5y ago
    There's been a noticeable boost just in the last 24 hours. The super wealthy are remarkably adept at getting the masses to advocate on their behalf. E.g. Musk has already marshaled his sizable army.
- elefanten 5y ago
  More prosaic explanation: this "philosopher" (AKA dude with philosophy degree who was a management consultant for 20 years) is on a press tour for his new book. edit: Not that I disagree about the existence of the dynamic you point to.
  - jjoonathan 5y ago
    I'm not entirely convinced that these are two different mechanisms. Think tanks, economists, political commentators, and politicians all experience strong selective pressure to promote opinions that people with influential money find agreeable. In turn, people with influential money tend to find agreeable opinions to be exactly those that deflect their taxes (or disadvantage labor, or look away from the externalities on which they have built their fortune, etc).
ctdonath 5y ago
Related fact: the US "poverty line" is at the 80th percentile of world incomes. If you're not "US poor", you're in the top 20%.
- dragonwriter 5y ago
  > Related fact: the US "poverty line" is at the 80th percentile of world incomes That looks like you are taking the world individual income distribution and the US household poverty line for single member households. That's...not really sensible.
  - rsj_hn 5y ago
    > That looks like you are taking the world individual income distribution and the US household poverty line for single member households. That's...not really sensible. It's quite accurate. But let's dot our i's and cross our t's as the procedural criticism is a fair one. U.S. poverty for a single household with 1 member is $12,880. Plug that into our handy WAPO calculator here: https://www.washingtonpost.com/graphics/2018/business/global-income-calculator/ https://www.washingtonpost.com/graphics/2018/business/global... And you are better off than 80% of the world (if the calculator is to be believed). Try it yourself!
lumost 5y ago
The problem really comes down to security. Unless you have 10+ million in the bank, you are probably at a non zero risk of having one of the following occur - unable to retire/aged out of the workforce - lose house - lose job and unable to find replacement. - unable to afford living in your area. - broken by medical bill/disaster. - unable to afford education/childcare for children My partner and I work in well known tech companies, but don’t come from money - we are well off as long as one of us doesn’t get a bad performance review and there isn’t a crash. It’ll be decades if ever when I have the financial security to consider myself wealthy.
- AnimalMuppet 5y ago
  No, with only 5 million in the bank, you are not at risk of losing your house - not unless you mess up spectacularly. Even a catastrophic medical issue shouldn't make you lose your house, unless you don't bother to have insurance - and if you have 5 million in the bank, you absolutely can afford to have insurance.
  - rootusrootus 5y ago
    Hell, with a paid off house and a mere 2M in savings I could choose to retire. Even without touching the principle, if there is no mortgage in the picture $60K/year is equivalent to over $100K in real annual income. In lots of places that's plenty for a very comfortable lifestyle.
- shoto_io 5y ago
  It never stops. I met a very, very wealthy guy a while back. All he was concerned with was how to preserve his wealth for the next generation. He did not feel financially secure at all. So, what will happen once you succeeded bringing those risks down to zero? Is that the time you start pursuing your dreams or will you start trying to get the next set of risks down to zero?
  - phendrenad2 5y ago
    Sample size of one. I imagine not all wealthy people are interested in passing it to their children (if any).
paxys 5y ago
Educated, have good jobs, own a single-family house, pay for their kids' college, save money for retirement – in any other country/culture this category would be known as "middle class". I fall into this 9.9% as well, so someone please tell me where I can exert this "Aristocratic influence" I have.
- diskzero 5y ago
  Do you contribute to campaigns and attend fundraising events? I realize a corporation or PAC can drop a lot of money in expectation of influence. I am also amazed that I can can meet future senators, representative, etc. and have them listen to me. I can be cynical but sometimes feel my voice is heard.
- greenail 5y ago
  The point is to demonize you and gain popular support for more wealth redistribution. It isn't about inherited power, just look at how 2nd and 3rd generation communist families tend to have so much power in China.
gonational 5y ago
Socialist busybodies, always concerning themselves with what others spent their time earning, in fear of a situation where normal people have anything of value for too long… It's always so important to convince each cohort of the population that every step of the ladder above them is absolutely crushing it, probably at their cohort's expense, and they probably deserve to be taxed harder. After all, what other business does anyone have judging how well others live? Meanwhile, acorns has raised over $100 million from Black Rock, celebrities, NBC Universal, etc.
engmgrmgr 5y ago
1. Take the top n=10% of net worths 2. Shave off the most extreme outliers at the top 3. Give this group a catchy name and attribute values to them 4. Make enough money off of pop-sociology to be included in this group 5. Repeat with n=n/2
buildbot 5y ago
After reading this, it feels like a piece designed to get working class people to fight amongst themselves vs. the actual billionaires. Like 20 Million is a HUGE AMOUNT but that's 5x less than 100M, and 50X less than a billion. 50X
notenoughbeans 5y ago
Maybe it's a regional thing but I feel like there are some pretty big caricaturisations is this piece. On meritocracy: "I think a defining feature of the group culturally is this belief in meritocracy, in the sense merit is what makes the economy work. The sum total of our GDP is the sum total of the individuals in it." Nothing too controversial... "Everyone earns what their merit is worth." I feel like this only works in a very technical sense and doesn't translate to what people would mean using natural language. Merit is a morally loaded term which I think makes the whole debate over Meritocracy confusing. A better way to put this would be: 1. Individuals have different amounts of leverage, which is correlated to earnings. 2. Competency is non-trivial and significant source of leverage. 3. A person with competency has more leverage than a person without competency all things being equal. "That is coupled with a market myth that says that whatever people do that earns money is essentially good for society." Perhaps there are people that believe this, but they must be a small group of people. Everyone everywhere complains about the knock-on effects of different industries. It's not clear to me where they are drawing these conclusions from.
deleted 5y ago
[deleted]
jimbob45 5y ago
>How does the 9.9% vary across racial lines? The numbers are not very precise. White people make up about 90% of the 9.9%, which is not at all representative of the total. It’s not all white but much more white than the rest of the population. Whites are 72% of the population so 90% falls pretty close to what we would expect to begin with. It seems an awful lot like the author was digging for any "us vs them" that they could find. Seeing as that the author of the book being reviewed and the author of the article are both shameless leftist shills according to their respective Twitter accounts, I feel comfortable sorting this article into the propaganda bin.
- gowld 5y ago
  You should realize that 18% you casually dismiss is taking up the space that respresents almost all Black people who aren't in that wealth tier.
  - jimbob45 5y ago
    First off, blacks are only 14.2%[0] of the population. If they represented 18% of this group, they would be nearly a third overrepresented. Second, this is an incredibly arbitrary group. $1.2 to $20 million? Why the fuck would you choose $1.2? It seem glaringly obvious that the author chose an overly-specific range so that their numbers would conveniently match their agenda. Finally, valid statistical analysis is not "casual dismissal".
inside65 5y ago
Where do people live that think having 1.2M in assets is no big deal? Where I live you're making big money if you make 80K a year.
- gowld 5y ago
  San Francisco, New York City, Seattle, DC, and their suburbs.
- therealdrag0 5y ago
  There are many cities where a 1M house is really just a basic house that would be worth a fraction of that 100 miles away. Being wealthier on paper doesn't always translate to a more wealthy lifestyle.
  - inside65 5y ago
    At the end of the day, they can still sell their house and have 1M. I can sell my house and have 150K. There is definitely more to it than just being wealthier on paper.
    - jimmydef 5y ago
      It depends where you live. If you live in the US, you can sell your house, have 1M, move to a low cost housing part of the country, buy a house for 150k and have 850k leftover for retirement. I live in Singapore. If I have a 1M house, I can sell it, have 1M. Now I have two choices. I can either choose to be homeless, or I can buy another house for another 1M and be stuck in the same position as I was in in the first place. That 1M is really just "on paper" if you live in a country where housing is equally expensive everywhere.
      - inside65 5y ago
        That may be the case, but this article is about Americans. If we're opening up to the world, then just as well you actually have three options: move to a different country.
hindsightbias 5y ago
It’s time to start a wealth tax on 401k values.
- RhysU 5y ago
  Uh, all that money is taxed at withdrawal.
horns4lyfe 5y ago
"Most members of the 9.9% also talk about the amazing virtues of education and go out and build these systems where the educated will succeed. Then we have a system of financing college where a large majority of people have to buy that. They have to buy that behavior or life pattern. It’s like someone manages to jump across a pit of fire and get to the other side and then convinces everyone else they should do the same thing. Unfortunately, statistically, those following that model are not all going to succeed. It does not make sense to have a society that is either defaulting on student debt or they are so burdened by it they can’t buy houses or take other important steps in life." The path of getting a good, useful education, making decent life decisions, and slowly building up wealth over time via real estate? Ya, that will work for most people. The jump over that fire pit is pretty short. And while some people can't jump at all, a lot can.
- alistairSH 5y ago
  Unfortunately, statistically, those following that model are not all going to succeed. Except, statistically, most people jumping the fire pit (going to college) do succeed, so making the jump, in aggregate, is worth it. On an individual level, sure, somebody should consider the pros and cons. But from a policy perspective, we absolutely should be pushing some sort of higher education (albeit not necessarily the standard 4-year BA). And I do hate that college costs have gone up as much as they have. My parents paid cash for my and my sister's undergrad. Despite similar incomes (adjusted for inflation), doing that for my son was a real stretch.
RickJWagner 5y ago
Rant against meritocracy..... Egregious hinting about racism..... Ah, a political article. I thought it was about something else when I started reading it. It's clearly meant to be persuasive.
greenail 5y ago
The book's title full tells you a lot: "The 9.9 Percent: The New Aristocracy That Is Entrenching Inequality and Warping Our Culture." No examples of policy, law, or any specifics how this group is "entrenching inequality". This is more reductive single factor race blaming. Nothing regarding how many of the 9.9% inherited this class status, so how is this an Aristocracy? Demonizing merit seems like a terrible strategy for a society.

47 points by rainhacker 5y ago

Well they are in circles where they feel decidedly poor. Just see the excesses in the Bay area and come out feeling real poor even if you are in the 1% income bracket. Of course everything is relative and you might need 50 years income to buy a place that would be considered awful in Iowa.

dcolkitt 5y ago
Most of those people in the Bay Area are not forced to live in the Bay Area. Most have fairly portable professional skills that they could bring to a lower cost area. They might take a pay cut, but they’d still certainly be among the highest income circles in Iowa. There’s two primary reasons they choose to continue to live in the Bay Area. One is they value the amenities of the metro. Many view Iowa as a terrible fate, even if they are living in a mansion. In this case, they may be “living poor” in terms of housing, but only because they choose to spend most of their income on the luxury good of Bay Area living. Same way, I wouldn’t be crying for a high income guy who’s always broke because he spends all his money on his boat. Second reason people live in the Bay Area is because it gives them access to very high paying career paths. Even if it’s a bad deal for an L2, by the time they make L6 at Google, their living standards will be much higher than what they could earn in Iowa, even given the cost of living. This group is best thought of as sacrificing consumption today to invest in their human capital. Much like medical residents, while they’re low paid today, they’ll be very high paid in short order. Again, we really wouldn’t feel two bad about medical residents having to drive a used car for a couple years while they rocket up the career ladder.
- aftbit 5y ago
  I feel a lot worse for a medical resident than I do for a Google L2. There are arguments for paying newcomers to skilled fields less, but we shouldn't pay people abusively low wages for physically and emotionally draining work.
- opportune 5y ago
  The third is that if you live frugally in a super expensive metro, your absolute savings rate can be much higher than it would be in rural Iowa (well, covid changed that a bit, but most companies still have “COL factors” on your comp). This is truer for single people, who can live a low impact lifestyle in a studio or 1bed apartment, no car, and taking advantage of office amenities than it is for families.
  - RhysU 5y ago
    This. Saving, say, 10% of income is a whole different game in a HCOL area vs saving 10% in a low one provided that one retires outside of the HCOL area.
ctdonath 5y ago
So cash in and move. I keep seeing examples of Bay Area "awful", and note that one can get a lakefront McMansion within a 30 minute drive of Atlanta for the same price. Too many wallow in the "feel" and don't leverage their opportunity. (Yes, I moved 1000 miles. I know the pain of leaving it all behind, and the joy of 2x the house for 1/6th the taxes and more job opportunities.)
- elefanten 5y ago
  "more job opportunities" is the pivotal one. I don't think most people can check all those boxes together. If you're coming from big tech or big startup in Bay Area, it is unlikely you will find "more [acceptable] job opportunities" in a significantly lower col area.
  - erik_seaberg 5y ago
    This. I moved here from Seattle in 2006, and immediately had 10x as many inquiries from recruiters. Local salaries more than made up for the ridiculous rents here.

droopyEyelids 5y ago

Article seems confused about the difference between 'wealth' and 'income'. It has to be tough trying to write about complicated topics while staying under a 'fourth grade reading comprehension' ceiling, or whatever the target is. How confusing the world is when you have to stick to the 'ten hundred' most common words and concepts. (ten-hundred from XKCD) https://xkcd.com/thing-explainer/ https://xkcd.com/thing-explainer/

ctdonath 5y ago
If you own your home, and are otherwise completely out of debt, you can live much better on far less income. Income doesn't mean much if most of it is going toward debt service. Anecdote: Trump had an epiphany when he realized a bum on the street was literally worth more than he was financially.
theonemind 5y ago
I've found a slight modification of the ten hundred word concept pretty useful when/if I want to write a simple explanation. Sticking rigidly to 1,000 words introduces its own problems, but judicious use of the principle usually turns out a pretty nice result. I start with the ability to use those 1,000 words freely, and if I want to use a word not on the list, I consider carefully whether the value in introducing it outweighs the cognitive overhead, and/or if I can use words already in the list without loss of meaning, and generally allow words I've used at least once to get used again (so the list grows once I've decided that I really have to use a word not on the list). Additionally, no jargon at all appears on the list, so I often explain a jargon term in terms of words on the list or that I've added to the list, then add the jargon word to the list and keep using it going forward, so it serves as a canary-in-the-coal-mine for terms I should explain rather than start throwing around without thinking about it in that way as well. It can turn out a surprisingly clear result that doesn't even show much sign of having started with a limited amount of words. It doesn't seem dumbed-down or vocabulary impaired, just easy to read (given that I do use any word that really seems to decrease the complexity of the explanation or cognitive overhead.) It takes some time, so I didn't do it here, but if I did, this explanation would be clearer!

jorblumesea 5y ago

When a healthcare bill could bankrupt you easily, hard to feel secure with even millions in the bank. Americans are right to feel exposed.

YetAnotherNick 5y ago
Why depend on a bill? You could buy insurance with the interest of millions in bank.
- mmcconnell1618 5y ago
  In the United States, private health insurance often includes a lifetime cap on coverage of certain conditions. Before the ACA was passed under President Obama, many policies would not cover pre-existing conditions. Insurance companies no longer deny coverage for pre-existing conditions but there are no price controls on premiums. It is very conceivable to end up with a multi-million dollar healthcare bill in the United States, even with a good private health insurance policy. Insurance reduces the chances of that happening but it does not guarantee freedom from the chance of a medical bankruptcy.
  - ctdonath 5y ago
    Healthcare providers will work out manageable/fair billing and payment plans, if the patient will simply take the initiative to discuss it. They're just not going to advertise the fact.
  - refurb 5y ago
    There are no lifetime caps any more. You seem worried about things that don’t exist.
    - mmcconnell1618 5y ago
      The limit on lifetime and annual caps only applies to "essential health benefits" which gives insurance companies the ability to deny first and force the insured to fight to get payment. Grandfathered legacy policies are also allowed to maintain lifetime bans. https://www.hhs.gov/healthcare/about-the-aca/benefit-limits/index.html https://www.hhs.gov/healthcare/about-the-aca/benefit-limits/...

unpolloloco 5y ago

Another article talking about the same thing: https://www.vox.com/the-goods/22673605/upper-middle-class-meritocracy-matthew-stewart https://www.vox.com/the-goods/22673605/upper-middle-class-me... The interesting point that this one misses is that the children of this class are often not counted as part of the 9.9%, but are effectively part of it nonetheless because of the backstop an benefits that the 9.9% confer onto them. And their beliefs, etc. are pretty well in line with the 9.9. So really, it's more like the top 20% that's in this category, even though it doesn't look like it on paper.

Tehdasi 5y ago

"The net worth of that group ranges from about $1.2 million to $20 million per household, Stewarts says." In Australia apparently all you have to do to get into this group would be to actually own a paid off house. :/ I think this says far more about housing then wealth inequality though.

sriram_sun 5y ago
In America, paid off or not, the location of your house pretty much guarantees a lower bound on your kid's future in the richer neighborhoods and unfortunately an upper bound in many poorer ones.
- dcolkitt 5y ago
  Decades of twin studies have consistently shown that family environment (which by definition includes the zip code you’re raised in) has nearly zero causal impact on adult outcomes in America. Yes, it’s true that kids from well to do areas grow up to become well to do. But twin studies tell us the mechanism of heritability is entirely genetic.
  - sriram_sun 5y ago
    location => zip code. Twin studies are not what you look at to prove (or disprove) this hypothesis. You have a much richer data set. All the kids that grew up in a zip code. A lot of twin studies have no control groups! With a richer data set, you can more easily look at the zip code someone grew up in and look at where they end up in life. You don't have to track them. Also, the reason why I insist on focusing on zip code is that peer groups matter much more than family environment. Below, I've linked some of the articles I have read on this in the past. Here is a book pointing out various issues with twin studies: https://dl.uswr.ac.ir/bitstream/Hannan/139363/1/9781138813069.pdf https://dl.uswr.ac.ir/bitstream/Hannan/139363/1/978113881306... https://www.brookings.edu/opinions/americas-zip-code-inequality/ https://www.brookings.edu/opinions/americas-zip-code-inequal... "Today, the state of the American Dream—the ability of anyone to work hard and get ahead—largely depends on one’s zip code." https://talkpoverty.org/2015/12/17/american-dream-zip-codes-affordable-housing/ https://talkpoverty.org/2015/12/17/american-dream-zip-codes-... https://www.forbes.com/sites/michaeltnietzel/2020/01/02/solving-higher-educations-zip-code-problem/?sh=3b0a26f023f3 https://www.forbes.com/sites/michaeltnietzel/2020/01/02/solv...

k__ 5y ago

I checked once and seemingly I belonged to the richest 10% of Germany. Didn't feel that way.

brnt 5y ago
People consistently suck at intuiting power laws. Same as with the one percent: who we should go after are the one percent of the one percent.

pedrosorio 5y ago

"The net worth of that group ranges from about $1.2 million to $20 million per household, Stewarts says. Those assets include cash savings and investments, as well as real estate. Many members of the 9.9% don’t feel enormously wealthy but they are still doing better than the vast majority of the country." A household with $1.2M in assets does not belong to the same group as a household with $20M in assets.

YetAnotherNick 5y ago
Lifestyle with $1.2M in asset is not wildly different from $20M in asset
- CheezeIt 5y ago
  One isn’t retired, the other is.
- randomhodler84 5y ago
  I really don’t think this is the case. One is owning a house, and probably still working. The other is owning a house and other passive income sources, probably enough that you don’t need to work. There is a massive gulf between a million and 20 million dollars.
  - dcolkitt 5y ago
    I’m virtually certain that if you compare hours worked among households worth $20 million and households worth $1.2 million (controlling for retirement age), the former is significantly higher. In theory ultra high wealth buys the luxury of leisure. In practice, in the US today, leisure monotonically decreases with income and wealth. By far the bottom quintile works much fewer hours than the top 1%.
    - blacksmith_tb 5y ago
      Wouldn't that be axiomatically true, given that the bottom quintile would contain all of the unemployed?

RNCTX 5y ago

I'd say the author of the article doesn't have a very good grasp of this concept. There is a vast difference between, as she says, "1.2 million" and "20 million." 20 million is "screw you" money. In that someone could quit everything they do, and live their whole life very comfortably on the wealth they have in hand, by paying cash for their house, setting aside a million in rainy day money, and putting the rest into very low risk bonds. 1.2 million is just enough money to get someone in trouble if they make a few mistakes. Buy an expensive house in the wrong place? Not a millionaire anymore. Ill-timed stock returns that turn south around the first of the year? Not a millionaire anymore. Try to start another business that doesn't pan out? Not a millionaire anymore. There's a million ways (pun intended) for someone with 1.2 million dollars to find themselves fast running out of money. Someone with 20 million? Not so much.

jjoonathan 5y ago

Hey, look -- the 0.1% are seeing tax proposals on their radar that might actually land on them for once. Quick, to the propaganda cannons! Deflect those taxes, make sure they land on the upper middle class instead, like the last 10 times this happened!

ChuckMcM 5y ago
It is hard not to be this cynical but I was thinking the same thing.
buildbot 5y ago
This 100%. I expect we will see a lot more of these articles
- rootusrootus 5y ago
  There's been a noticeable boost just in the last 24 hours. The super wealthy are remarkably adept at getting the masses to advocate on their behalf. E.g. Musk has already marshaled his sizable army.
elefanten 5y ago
More prosaic explanation: this "philosopher" (AKA dude with philosophy degree who was a management consultant for 20 years) is on a press tour for his new book. edit: Not that I disagree about the existence of the dynamic you point to.
- jjoonathan 5y ago
  I'm not entirely convinced that these are two different mechanisms. Think tanks, economists, political commentators, and politicians all experience strong selective pressure to promote opinions that people with influential money find agreeable. In turn, people with influential money tend to find agreeable opinions to be exactly those that deflect their taxes (or disadvantage labor, or look away from the externalities on which they have built their fortune, etc).

ctdonath 5y ago

Related fact: the US "poverty line" is at the 80th percentile of world incomes. If you're not "US poor", you're in the top 20%.

dragonwriter 5y ago
> Related fact: the US "poverty line" is at the 80th percentile of world incomes That looks like you are taking the world individual income distribution and the US household poverty line for single member households. That's...not really sensible.
- rsj_hn 5y ago
  > That looks like you are taking the world individual income distribution and the US household poverty line for single member households. That's...not really sensible. It's quite accurate. But let's dot our i's and cross our t's as the procedural criticism is a fair one. U.S. poverty for a single household with 1 member is $12,880. Plug that into our handy WAPO calculator here: https://www.washingtonpost.com/graphics/2018/business/global-income-calculator/ https://www.washingtonpost.com/graphics/2018/business/global... And you are better off than 80% of the world (if the calculator is to be believed). Try it yourself!

lumost 5y ago

The problem really comes down to security. Unless you have 10+ million in the bank, you are probably at a non zero risk of having one of the following occur - unable to retire/aged out of the workforce - lose house - lose job and unable to find replacement. - unable to afford living in your area. - broken by medical bill/disaster. - unable to afford education/childcare for children My partner and I work in well known tech companies, but don’t come from money - we are well off as long as one of us doesn’t get a bad performance review and there isn’t a crash. It’ll be decades if ever when I have the financial security to consider myself wealthy.

AnimalMuppet 5y ago
No, with only 5 million in the bank, you are not at risk of losing your house - not unless you mess up spectacularly. Even a catastrophic medical issue shouldn't make you lose your house, unless you don't bother to have insurance - and if you have 5 million in the bank, you absolutely can afford to have insurance.
- rootusrootus 5y ago
  Hell, with a paid off house and a mere 2M in savings I could choose to retire. Even without touching the principle, if there is no mortgage in the picture $60K/year is equivalent to over $100K in real annual income. In lots of places that's plenty for a very comfortable lifestyle.
shoto_io 5y ago
It never stops. I met a very, very wealthy guy a while back. All he was concerned with was how to preserve his wealth for the next generation. He did not feel financially secure at all. So, what will happen once you succeeded bringing those risks down to zero? Is that the time you start pursuing your dreams or will you start trying to get the next set of risks down to zero?
- phendrenad2 5y ago
  Sample size of one. I imagine not all wealthy people are interested in passing it to their children (if any).

paxys 5y ago

Educated, have good jobs, own a single-family house, pay for their kids' college, save money for retirement – in any other country/culture this category would be known as "middle class". I fall into this 9.9% as well, so someone please tell me where I can exert this "Aristocratic influence" I have.

diskzero 5y ago
Do you contribute to campaigns and attend fundraising events? I realize a corporation or PAC can drop a lot of money in expectation of influence. I am also amazed that I can can meet future senators, representative, etc. and have them listen to me. I can be cynical but sometimes feel my voice is heard.
greenail 5y ago
The point is to demonize you and gain popular support for more wealth redistribution. It isn't about inherited power, just look at how 2nd and 3rd generation communist families tend to have so much power in China.

gonational 5y ago

Socialist busybodies, always concerning themselves with what others spent their time earning, in fear of a situation where normal people have anything of value for too long… It's always so important to convince each cohort of the population that every step of the ladder above them is absolutely crushing it, probably at their cohort's expense, and they probably deserve to be taxed harder. After all, what other business does anyone have judging how well others live? Meanwhile, acorns has raised over $100 million from Black Rock, celebrities, NBC Universal, etc.

engmgrmgr 5y ago

1. Take the top n=10% of net worths 2. Shave off the most extreme outliers at the top 3. Give this group a catchy name and attribute values to them 4. Make enough money off of pop-sociology to be included in this group 5. Repeat with n=n/2

buildbot 5y ago

After reading this, it feels like a piece designed to get working class people to fight amongst themselves vs. the actual billionaires. Like 20 Million is a HUGE AMOUNT but that's 5x less than 100M, and 50X less than a billion. 50X

notenoughbeans 5y ago

Maybe it's a regional thing but I feel like there are some pretty big caricaturisations is this piece. On meritocracy: "I think a defining feature of the group culturally is this belief in meritocracy, in the sense merit is what makes the economy work. The sum total of our GDP is the sum total of the individuals in it." Nothing too controversial... "Everyone earns what their merit is worth." I feel like this only works in a very technical sense and doesn't translate to what people would mean using natural language. Merit is a morally loaded term which I think makes the whole debate over Meritocracy confusing. A better way to put this would be: 1. Individuals have different amounts of leverage, which is correlated to earnings. 2. Competency is non-trivial and significant source of leverage. 3. A person with competency has more leverage than a person without competency all things being equal. "That is coupled with a market myth that says that whatever people do that earns money is essentially good for society." Perhaps there are people that believe this, but they must be a small group of people. Everyone everywhere complains about the knock-on effects of different industries. It's not clear to me where they are drawing these conclusions from.

deleted 5y ago

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jimbob45 5y ago

>How does the 9.9% vary across racial lines? The numbers are not very precise. White people make up about 90% of the 9.9%, which is not at all representative of the total. It’s not all white but much more white than the rest of the population. Whites are 72% of the population so 90% falls pretty close to what we would expect to begin with. It seems an awful lot like the author was digging for any "us vs them" that they could find. Seeing as that the author of the book being reviewed and the author of the article are both shameless leftist shills according to their respective Twitter accounts, I feel comfortable sorting this article into the propaganda bin.

gowld 5y ago
You should realize that 18% you casually dismiss is taking up the space that respresents almost all Black people who aren't in that wealth tier.
- jimbob45 5y ago
  First off, blacks are only 14.2%[0] of the population. If they represented 18% of this group, they would be nearly a third overrepresented. Second, this is an incredibly arbitrary group. $1.2 to $20 million? Why the fuck would you choose $1.2? It seem glaringly obvious that the author chose an overly-specific range so that their numbers would conveniently match their agenda. Finally, valid statistical analysis is not "casual dismissal".

inside65 5y ago

Where do people live that think having 1.2M in assets is no big deal? Where I live you're making big money if you make 80K a year.

gowld 5y ago
San Francisco, New York City, Seattle, DC, and their suburbs.
therealdrag0 5y ago
There are many cities where a 1M house is really just a basic house that would be worth a fraction of that 100 miles away. Being wealthier on paper doesn't always translate to a more wealthy lifestyle.
- inside65 5y ago
  At the end of the day, they can still sell their house and have 1M. I can sell my house and have 150K. There is definitely more to it than just being wealthier on paper.
  - jimmydef 5y ago
    It depends where you live. If you live in the US, you can sell your house, have 1M, move to a low cost housing part of the country, buy a house for 150k and have 850k leftover for retirement. I live in Singapore. If I have a 1M house, I can sell it, have 1M. Now I have two choices. I can either choose to be homeless, or I can buy another house for another 1M and be stuck in the same position as I was in in the first place. That 1M is really just "on paper" if you live in a country where housing is equally expensive everywhere.
    - inside65 5y ago
      That may be the case, but this article is about Americans. If we're opening up to the world, then just as well you actually have three options: move to a different country.

hindsightbias 5y ago

It’s time to start a wealth tax on 401k values.

RhysU 5y ago
Uh, all that money is taxed at withdrawal.

horns4lyfe 5y ago

"Most members of the 9.9% also talk about the amazing virtues of education and go out and build these systems where the educated will succeed. Then we have a system of financing college where a large majority of people have to buy that. They have to buy that behavior or life pattern. It’s like someone manages to jump across a pit of fire and get to the other side and then convinces everyone else they should do the same thing. Unfortunately, statistically, those following that model are not all going to succeed. It does not make sense to have a society that is either defaulting on student debt or they are so burdened by it they can’t buy houses or take other important steps in life." The path of getting a good, useful education, making decent life decisions, and slowly building up wealth over time via real estate? Ya, that will work for most people. The jump over that fire pit is pretty short. And while some people can't jump at all, a lot can.

alistairSH 5y ago
Unfortunately, statistically, those following that model are not all going to succeed. Except, statistically, most people jumping the fire pit (going to college) do succeed, so making the jump, in aggregate, is worth it. On an individual level, sure, somebody should consider the pros and cons. But from a policy perspective, we absolutely should be pushing some sort of higher education (albeit not necessarily the standard 4-year BA). And I do hate that college costs have gone up as much as they have. My parents paid cash for my and my sister's undergrad. Despite similar incomes (adjusted for inflation), doing that for my son was a real stretch.

RickJWagner 5y ago

Rant against meritocracy..... Egregious hinting about racism..... Ah, a political article. I thought it was about something else when I started reading it. It's clearly meant to be persuasive.

greenail 5y ago

The book's title full tells you a lot: "The 9.9 Percent: The New Aristocracy That Is Entrenching Inequality and Warping Our Culture." No examples of policy, law, or any specifics how this group is "entrenching inequality". This is more reductive single factor race blaming. Nothing regarding how many of the 9.9% inherited this class status, so how is this an Aristocracy? Demonizing merit seems like a terrible strategy for a society.