SERIOUS EFFECTS OF INCOME INEQUALITY

“The Continuing Increase in Income Segregation,” a March 2016 paper by Sean F. Reardon, a professor of education at Stanford, and Kendra Bischoff, a professor of sociology at Cornell, demonstrates the accelerating geographic isolation of the well-to-do — the upper middle and upper classes (a pattern of isolation that also applies to the poor, with devastating effect).

“In hard numbers, the percentage of families with children living in very affluent neighborhoods more than doubled between 1970 and 2012, from 6.6 percent to 15.7 percent.

“At the same time, the percentage of families with children living in traditional middle class neighborhoods with median incomes between 80 and 125 percent of the surrounding metropolitan area fell from 64.7 percent in 1970 to 40.5 percent.

“Reardon and Bischoff  write:

“ ‘Segregation of affluence not only concentrates income and wealth in a small number of communities, but also concentrates social capital and political power. As a result, any self-interested investment the rich make in their own communities has little chance of “spilling over” to benefit middle‐ and low-income families. In addition, it is increasingly unlikely that high‐income families interact with middle‐ and low‐income families, eroding some of the social empathy that might lead to support for broader public investment in social programs to help the poor and middle class.’”

Thomas B. Edsall, “How the Other Fifth Lives,” New York Times, April 27, 2016, Op-Ed Page.

TOP FIFTH IS SEPARATING ITSELF FROM THE REST OF US

“For years now, people have been talking about the insulated world of the top 1 percent of Americans, but the top 20 percent of the income distribution is also steadily separating itself — by geography and by education as well as by income.

“This self-segregation of a privileged fifth of the population is changing the American social order and the American political system, creating a self-perpetuating class at the top, which is ever more difficult to break into.”

Thomas B. Edsall, “How the Other Fifth Lives,” New York Times, April 27, 2016, Op-Ed Page.

SPENDING BY TOP 5 PERCENT ROSE 35 PERCENT

“There is also increasing demand from the most affluent shoppers. Spending by the top 5 percent of earners rose nearly 35 percent from 2003 to 2012 after adjusting for inflation, according to a study by Mr. Fazzari and Barry Z. Cynamon of the Federal Reserve Bank of St. Louis. For everyone else, spending grew less than 10 percent.”

Nelson D. Schwartz, “In and Age of Privilege, Not Everyone Is in the Same Boat: Companies Are Becoming Adept at Identifying Wealthy Customers and Marketing to Them, Creating a Money-Based Caste System.” New York Times, April 24, 2016, page A1.

MOST NOT LIVING THE AMERICAN DREAM

“ ‘We are living much more cloistered lives in terms of class,’ said Thomas Sander, who directs a project on civic engagement at the Kennedy School at Harvard. “We are doing a much worse job of living out the egalitarian dream that has been our hallmark.”

“Emmanuel Saez, a professor of economics at the University of California, Berkeley, estimates that the top 1 percent of American households now controls 42 percent of the nation’s wealth, up from less than 30 percent two decades ago. The top 0.1 percent accounts for 22 percent, nearly double the 1995 proportion.

“But even as income inequality and the wealth gap stoke the discontent that has emerged as a powerful force in this year’s presidential election, for American business it represents something else entirely. From cruise ship operators and casinos to amusement parks and airlines, the rise of the 1 percent spells opportunity and profit.”

Nelson D. Schwartz, “In and Age of Privilege, Not Everyone Is in the Same Boat: Companies Are Becoming Adept at Identifying Wealthy Customers and Marketing to Them, Creating a Money-Based Caste System.” New York Times, April 24, 2016, page A1.

24, 2016, page A1.

VERY RICH GAINED EIGHT TIMES THOSE WITH LESS THAN $1 MILLION

“Today, ever greater resources are being invested in winning market share at the very top of the pyramid, sometimes at the cost of diminished service for the rest of the public. While middle-class incomes are stagnating, the period since the end of the Great Recession has been a boom time for the very rich and the businesses that cater to them.

“From 2010 to 2014, the number of American households with at least $1 million in financial assets jumped by nearly one-third, to just under seven million, according to a study by the Boston Consulting Group. For the $1 million-plus cohort, estimated wealth grew by 7.2 percent annually from 2010 to 2014, eight times the pace of gains for families with less than $1 million.”

Nelson D. Schwartz, “In and Age of Privilege, Not Everyone Is in the Same Boat: Companies Are Becoming Adept at Identifying Wealthy Customers and Marketing to Them, Creating a Money-Based Caste System.” New York Times, April 24, 2016, page A1.

CREATING A MONEY-BASED CASTE SYSTEM

“With disparities in wealth greater than at any time since the Gilded Age, the gap is widening between the highly affluent — who find themselves behind the velvet ropes of today’s economy — and everyone else.

“It represents a degree of economic and social stratification unseen in America since the days of Teddy Roosevelt, J. P. Morgan and the rigidly separated classes on the Titanic a century ago.

“What is different today, though, is that companies have become much more adept at identifying their top customers and knowing which psychological buttons to push. The goal is to create extravagance and exclusivity for the select few, even if it stirs up resentment elsewhere. In fact, research has shown, a little envy can be good for the bottom line.

“When top-dollar travelers switch planes in Atlanta, New York and other cities, Delta ferries them between terminals in a Porsche, what the airline calls a ‘surprise-and-delight service.’ Last month, Walt Disney World began offering after-hours access to visitors who want to avoid the crowds. In other words, you basically get the Magic Kingdom to yourself.”

“When Royal Caribbean ships call at Labadee, the cruise line’s private resort in Haiti, elite guests get their own special beach club away from fellow travelers — an enclave within an enclave.”

Nelson D. Schwartz, “In and Age of Privilege, Not Everyone Is in the Same Boat: Companies Are Becoming Adept at Identifying Wealthy Customers and Marketing to Them, Creating a Money-Based Caste System.” New York Times, April 24, 2016, page A1.

“In many ways, the rise of the velvet rope reverses the great democratization of travel and leisure, and other elements of American life, in the post-World War II era. As the Jet Set gave way to budget airlines, in places like airports and theme parks even the wealthiest often rubbed shoulders with hoi polloi.

“These days, whether the provider is a private company or a public agency, special treatment for the very rich isn’t personal, it’s business. Late last year [2015], public officials in Los Angeles agreed to lease a separate facility at LAX to a private firm that would serve celebrities or anyone else willing to pay $1,800 to skip the traffic jams and lines at the main terminals.”

Nelson D. Schwartz, “In and Age of Privilege, Not Everyone Is in the Same Boat: Companies Are Becoming Adept at Identifying Wealthy Customers and Marketing to Them, Creating a Money-Based Caste System.” New York Times, April 24, 2016, page A1.