Brookings Institution fellow Richard Reeves' 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. Reeves writes in a new book Dream Hoarders, America “is a less competitive economy, as well as a less open society.”
He continues “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.” 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. Society continues with a system that replicates inequality, he argues.
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. “We need to be honest that the inequality problem does not kick in at 99%, but much earlier than that.”
Zoning laws that were once used to maintain racial segregation in the housing market are now used to maintain classist segregation.
“Such laws that were once race-based serve class purposes quite well so while we’ve seen a reduction in race based segregation, we’ve seen an increase in class-based segregation,” he says.
Some US university admissions systems are openly preferential, favoring “legacy” students whose parent or parents also attended. Systems that were developed to keep Jews out of Ivy League colleges have now been re-purposed to maintain class-based preferences. A further example is the use of internships. Even in institutions that promote their belief in meritocracy, including Mike Bloomberg’s New York mayoral administration, rely heavily on nepotism and its affiliated systems. Of the 1,500 interns hired during Bloomberg’s three-term administration, one in five had been recommended by someone within the administration. Such practices undermine claims of a meritocratic society. “In some ways, the myth of United States as a classless society is getting in the way.” That belief, Reeves adds, “stands in the way of the recognition of privilege and advantage that’s needed before any change can be brought about. Is it about privilege to give internships away? Internships are a leg up into the labor market, and it’s striking we don’t have those conversations.”
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