Surf Taiwan News, Browse the World »
Rising riches: 1 in 5 in US reaches affluence
More socially liberal, America's new rich are wielding power but may foil income equality
By HOPE YEN
Associated Press
2013-12-10 03:01 AM

WASHINGTON (AP) -- About 20 percent of U.S. adults become rich for parts of their lives, wielding outsize influence on America's economy and politics as its fastest-growing income group, based on take-home pay.

The growing numbers of poor Americans have been well documented, but survey data provided to The Associated Press detail the flip side of a record income gap -- the rise of the "new rich," who tend to enjoy better schools, employment and gated communities, making it easier to pass on their privilege to their children.

The success of this little-known group has implications for politics and policy: they may pose the biggest barrier to reducing U.S. income inequality, based on their tendency to believe that Americans can get ahead on their own, without more government support, experts say.

The group is more liberal than lower-income groups on issues such as abortion and gay marriage, according to an analysis of General Social Survey data by the AP-NORC Center for Public Affairs Research. But when it comes to money, their views aren't so open. They're wary of any government role in closing the income gap.

Made up largely of older professionals, working married couples and more educated singles, the new rich are those with household income of $250,000 or more at some point during their working lives. That puts them, if sometimes temporarily, in the top 2 percent of earners.

Even outside periods of unusual wealth, members of this group generally hover in the $100,000-plus income range, keeping them in the top 20 percent of earners.

Companies increasingly are marketing to this rising demographic, fueling a surge of "mass luxury" products and services from premium Starbucks coffee and organic groceries to concierge medicine and VIP lanes at airports. Political parties are taking a renewed look at the up-for-grabs group, once solidly Republican.

They're not the traditional rich.

In a country where poverty is at a record high, today's new rich are notable for their sense of economic fragility. They've reached the top 2 percent, only to fall back below it, in many cases. That makes them much more fiscally conservative than other Americans, polling suggests, and less likely to support public programs, such as food stamps or early public education, to help the disadvantaged.

Last week, President Barack Obama asserted that growing inequality is "the defining challenge of our time," signaling that it will be a major theme for Democrats in next year's elections.

New research suggests that affluent Americans are more numerous than government data depict, encompassing 21 percent of working-age adults for at least a year by the time they turn 60. That proportion has more than doubled since 1979.

At the same time, an increasing polarization of low-wage work and high-skill jobs has left middle-income careers depleted. Some 54 percent of working-age Americans will experience near-poverty for portions of their lives, hurt by globalization and the loss of good-paying manufacturing jobs.

In Gallup polling in October, 60 percent of people making $90,000 or more said average Americans already had "plenty of opportunity" to get ahead; among those making less than $48,000, the share was 48 percent.

"For many in this group, the American dream is not dead. They have reached affluence for parts of their lives and see it as very attainable, even if the dream has become more elusive for everyone else," says Mark Rank, a professor at Washington University in St. Louis, who calculated numbers on the affluent for a forthcoming book, "Chasing the American Dream," to be published by the Oxford University Press.

Sometimes referred to by marketers as the "mass affluent," the new rich make up roughly 25 million U.S. households and account for nearly 40 percent of total U.S. consumer spending.

While paychecks shrank for most Americans after the 2007-2009 recession, theirs held steady or edged higher. In 2012, the top 20 percent of U.S. households took home a record 51 percent of the nation's income. The median income of this group is more than $150,000.

Once concentrated in the old-money enclaves of the Northeast, the new rich are now spread across the U.S., mostly in bigger cities and their suburbs. They include Washington, Boston, Los Angeles, New York, San Francisco and Seattle. By race, whites are three times more likely to reach affluence than nonwhites.

Paul F. Nunes, managing director at Accenture's Institute for High Performance and Research, calls this group "the new power brokers of consumption." Because they spend just 60 percent of their before-tax income, often setting the rest aside for retirement or investing, he says their capacity to spend more will be important to a U.S. economic recovery.

Economists say the group's influence will only grow as middle-class families below them struggle. Corporate profits and the stock market are hitting records while the median household income of $51,000 is at its lowest since 1995. That's a boon for upper-income people who are more likely to invest in stocks.

Both Democrats and Republicans are awakening to the political realities presented by this new demographic bubble.

Traditionally Republican, the group makes up more than 1 in 4 voters and is now more politically divided, better educated and less white and male than in the past, according to Election Day exit polls dating to the 1970s.

In 2012, President Barack Obama lost the group, with 54 percent backing Republican Mitt Romney. Still, Obama's performance among higher-income voters exceeded nearly every Democrat before him.

___

Associated Press Director of Polling Jennifer Agiesta, News Survey Specialist Dennis Junius, and writers Suzette Laboy in Miami and Kristen Wyatt in Denver contributed to this report.

HOME |  WORLD |  Politics |  Business |  Sports |  Lifestyle |  TAIWAN |  Technology |  Health |  SUPPLEMENT |  Society |  OPINION
  • Taiwan News  ©  2014 All Rights Reserved.