Does the American dream exist? Or has the middle class ruined it by hoarding opportunity on a scale that makes even the infamous one-percenters appear harmless and ineffectual?
That’s the question economics professor and Brookings Institution fellow Richard Reeves has set out to answer, and his findings are worrying: the top echelons of the US middle class – those earning over $120,000 – are separating from the rest of the US, and pulling up the drawbridge behind them.
“The upper middle class families have become greenhouses for the cultivation of human capital. Children raised in them are on a different track to ordinary Americans, right from the very beginning,” he writes.
The upper middle class are “opportunity hoarding” – making it harder for others less economically privileged to rise to the top; a situation that Reeves says places stress on the efficiency of the US economic system and creates dynastic wealth and privilege of the kind the nation’s fathers sought to avoid.
“The US labor market is mostly meritocratic and not some kind of medieval cartel,” Reeves told the Guardian, “but it’s what happens before that that is unfair.” The problem, he says, is that people enter the race with very different levels of preparation.
“Kids from more affluent backgrounds are entering the contest massively well prepared, while kids from less affluent backgrounds are not. The well-prepared kids win, and everybody pretends to themselves it’s a meritocracy,” he says.
Reeves believes we have to think much earlier about equality of opportunity, including the way the education system, labor and housing markets work. Without reform, society continues with a system that replicates inequality, he argues.
For proof of enduring discrimination that starts in the cradle, Reeves, a former Guardian journalist, looks to the persistent inequality of wealth distribution. He observes that there has been very little change in income distribution of the bottom 80% over the past 30 years. The action, he says, takes place in the upper 20%, who “are pulling away”.
“It’s true that the top 1% are pulling away even faster, but they are a constantly changing group with a lot of circulation in and out of it. On terms of their effect, the top 1% aren’t really a big enough group to have much of an effect.” The problem, he says, is that upper middle class are able to point to the 1% as the problem: “It’s those rich bastards up there.”
“‘We are the 99%’ turned out to be an incredibly unhelpful slogan, because it allowed the person in the 98th percentile to convince themselves in they’re really in it together with the person in the 50th or 20th. But that’s empirically wrong, because it’s not where the inequality is, and morally wrong because the upper 20% have actually been doing pretty well,” he says.
In Reeves’ estimation, the failure to address the issue correctly has led to fundamental misunderstandings. While many agree that the rich should pay more in taxes, no one is willing to admit they are rich. “We need to be honest that the inequality problem does not kick in at 99%, but much earlier than that.”
