The Top 20 Percent Are the Real ‘Hoarders’ of Wealth

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.