Richard Reeves. In his new book, Dream Hoarders, Reeves argues that the upper middle class, or the top 20 percent, is “hoarding” the American Dream.
.. Reeves first points to unequal development of human capital.
By unequal development of human capital, Reeves is talking about parenting and education. Upper middle class parents are more likely to be married, and they’re more likely to plan their pregnancies. A study at the Columbia School of Social Work found that parenting behavior, namely maternal warmth and sensitivity, to be the most important factor of the gap between upper middle class children and bottom-income quintile children. In other words, parenting behavior is more important than maternal education, family size, and race.
Furthermore, upper middle class children generally live in neighborhoods with high-performing public schools, or they attend posh private schools. Upper middle class parents can hire college admissions consultants for upwards of $5,000 to guarantee that their children attend a selective college. Not to mention that most upper middle class parents have often gone through the college admissions process themselves and can help their children succeed.
.. In order to give all children the chance to succeed, Reeves suggest that we
- curb exclusionary zoning, especially density requirements that prevent multi-family homes from being built in wealthy areas;
- end legacy admissions at the top colleges in America that inevitably give preference to upper middle class children; and
- open up internships by increasing regulatory oversight and extending student financial aid to cover summertime opportunities.
.. while Absolute mobility is concerned with whether incomes increase or decrease. Over time, everyone can be better off as the economy grows. Why do we need downward mobility from the top? If everyone’s standards of living are rising, why do we need to be concerned with class status?
.. “increasing the number of smart, poor kids making it to the top of the labor market is likely to mean an improvement in quality and therefore productivity.” Upper middle class people are top influencers in society; they are politicians, pundits, broadcast journalists, and financial analysts. These people should be the most talented people in society, not just the ones lucky enough to be born to rich parents because that is best for the economy. To give one of many examples, a working paper published by the National Bureau of Economic Research determined that fund managers from low-income backgrounds perform better than those from upper middle class backgrounds.
the top quintile of earners—those making more than roughly $112,000 a year—have been big beneficiaries of the country’s growth. To make matters worse, this group of Americans engages in a variety of practices that don’t just help their families, but harm the other 80 percent of Americans.
.. if we are serious about narrowing the gap between ‘the rich’ and everybody else, we need a broader conception of what it means to be rich.
the upper-middle class has pulled away from the middle class and the poor on five dimensions:
- income and wealth,
- educational attainment,
- family structure,
- geography, and
- health and longevity
.. They dominate the country’s top colleges, sequester themselves in wealthy neighborhoods with excellent public schools and public services, and enjoy healthy bodies and long lives.
They then pass those advantages onto their children, with parents placing a “glass floor” under their kids.
- They ensure they grow up in nice zip codes,
- provide social connections that make a difference when entering the labor force,
- help with internships,
- aid with tuition and home-buying, and
- schmooze with college admissions officers.
All the while, they support policies and practices that protect their economic position and prevent poorer kids from climbing the income ladder:
- legacy admissions,
- the preferential tax treatment of investment income,
- 529 college savings plans,
- exclusionary zoning,
- occupational licensing, and
- restrictions on the immigration of white-collar professionals.
.. As a result, America is becoming a class-based society, more like fin-de-siècle England than most would care to admit, Reeves argues. Higher income kids stay up at the sticky top of the income distribution. Lower income kids stay down at the bottom. The one percent have well and truly trounced the 99 percent, but the 20 percent have done their part to immiserate the 80 percent, as well
Reeves offers a host of policy changes that might make a considerable difference:
- better access to contraception,
- increasing building in cities and suburbs,
- barring legacy admissions to colleges,
- curbing tax expenditures that benefit families with big homes and capital gains.
.. Expanding opportunity and improving fairness would require the upper-middle class to vote for higher taxes, to let others move in, and to share in the wealth.
.. Prying Harvard admission letters and the mortgage interest deductions out of the hands of bureaucrats in Bethesda, sales executives in Minnetonka, and lawyers in Louisville is not going to be easy.