What the article is trying to point out is that the 9.9% thinks he's not so wealthy, so he is against inequality, but he still, somehow, for his own comfort and merit belief system, likes his higher income.
Trying to talk about ranges of income, would it the top N%, is pointless.
You could strip out the hypocrisy like so: "I am not at the top, so I am still against inequality, but I am comfortable, but since I AM NOT AT THE TOP, YOU CANNOT BLAME ME, so blame the richest". This is the core problem about stretching inequality, because individualism makes people work for their own selves, and NEVER encourage anyone to "take one for the team". The whole story is about how people perceives their own selves. This is an important debate.
I'm sure those 9.9% would be very surprised they belong to the top 10%. The graph of income is always growing exponentially, yet for some reason people are throwing away the idea that they might be the ones to blame, because people will naturally find argument that they're not to blame. It's always the responsibility of someone else.
I personally have not lived the wealthiest life there is in term of income, but you know, at least I don't complain, because when I compare it to the rest of the world, being in the lower 50% or 60% or 30% in a modern and developed country is still a pretty good life.
The things the upper middle class think should be a given to them because they are within a certain economic strata are actually just regular luxuries.
The thing is, it's like the boiling a frog in water analogy. You get desensitized to it. I tend to work with salespeople, so there's a tendency to get flashier things than a lot of my programming friends, but it manifests in things like always having the latest iPhone (or it's Android equivalent), travelling internationally a couple times a year, going for brunch whenever you feel like it, being able to save a good $10-15k yearly without really trying. Maybe hitting Tahoe a few times in the winter. Going to Soulcycle or Equinox to work out during the week. But you still can't buy a house in San Francisco. So you don't feel rich, but compared to the average American you're taking home a multiple of what they're making. It shocked me to find out the average household income is about $60k annually.
We all live in a bubble. San Francisco is a bubble. Dayton Ohio is a bubble as well. And when you live in a city with a ton of rich people (and a sizeable population probably in the bottom 10%) it gets pretty easy to forget about the other 80% who live somewhere in the middle of it all, in Concord, or Pleasanton or whatever they call it in the East Bay.
Are you in a dual income family, and have you considered buying areas like the Excelsior, Ingleside heights (excluding Ingleside terrace), Oceanview/Merced Heights, Outer Mission, Portola, Silver Terrace, or other such neighborhoods?
I don't mean to dismiss your question, these are still expensive neighborhoods, probably between 800k-1.2mil for something decent. This is tough for two incomes, as the dual income thing means you're also stuck with high childcare costs, which will probably be ~25k per kid in San Francisco (I'm talking about the kind that allows you to go to work from 8am-6pm - and even then you will have to recuse yourself from meetings to be at daycare by 6pm, officially surrendering your membership in the young people are just smarter and can focus on what's important club in Silicon Valley companies[1).
I do think this is in reach of the group you just described, though. 250k+ family income isn't unusual for two tech workers or other professionals in SF (a programmer and dental hygienist pair, for example, should exceed this).
[1] https://venturebeat.com/2007/03/26/start-up-advice-for-entre...
I feel like in SF or any big expensive city owning a home is not something for the middle or upper middle class - there’s a point that no matter how many brunches or vacations you can take, you can’t trade them for a house except in an area where you’ll be basically going down in economic and social class (live out in Tracy or something, have a 2 hour one way commute, far fewer vacations etc). The trade off for that “stability” isn’t one that a lot of people currently renting think is a good deal. IMO the best way to do it is keep on renting while putting as much money in investments and retirement funds as one can, with the idea of retiring somewhere else, or only buying if you get a windfall.
But I’m terms of lifestyle, those in that 9.9% have a far richer one than the rest, but they don’t have the long term security of owning their own home.
Choose your poison.
My home was about $120k. It’s easily affordable on a tech industry salary. The median household income in my county is under $30k...
In that sense, the house owns you, not the other way around.
The median household income across San Francisco and San Mateo counties is $115k. People who make close to that are entirely justified in calling themselves middle class. Spending half your take-home on a crappy $2500 apartment doesn't make you rich just because the apartment is in SF.
[1] http://www.aei.org/publication/todays-new-homes-are-1000-squ...
[2] https://en.wikipedia.org/wiki/Home-ownership_in_the_United_S...
[3] https://www.statista.com/statistics/184272/educational-attai...
If you're an investor (and everybody's an investor whether they like it or not) the question you should be asking is what things will be like in ten years.
That said the article (like pretty much all economics that comes out of The Atlantic) is pretty silly. The dire condition of the American middle class is completely the fault of the US government. In the last 30 years (while China has achieved world historic growth) the US has dumped trillions into wholly unnecessary wars and giveaways to international investors. The $20 trillion dollars the US government has wasted is the greatest malinvestment in the history of the world. All the money that should've been spent on vital innovations and critical investments and infrastructure was used to blow up brown people and inflate asset prices. 2008 was just the beginning; the consequences of this extraordinary malinvestment will take decades to ripple through the global economy. The 9.9% or any other arbitrary percent of Americans are only to blame to the extent that they haven't overthrown their government and executed a few politicians. Over and over electorate have failed to correct the system and so politicians like John McCain -- who helped push America into the greatest crime of the 21st century -- are widely lauded instead of arrested.
[1] https://www.ft.com/content/51771766-7c7c-11e7-9108-edda0bcbc...
[2] https://www.vox.com/science-and-health/2018/5/22/17376536/fe...
[3] https://www.stlouisfed.org/~/media/Files/PDFs/HFS/essays/HFS...
The idea of a "middle-class struggle" is confused with changing standards and lifestyles of the middle class. Certainly the regular use of jet airplanes, hotel accommodations, and full-service dining may be out of reach for some, but an urban-agrarian lifestyle with the use of a motorcar and modern conveniences such as electricity and indoor plumbing is cheaper and more accessible than ever.
We are, I earn significantly more than my partner who has a degree and I don't have a degree.
It's one of the last fields that without a degree you can still earn a good living if you can break into it somehow (in my case it was side gigs/contracting to crappy full time position to none-crappy full time position to decent full time position).
Though I'm in the UK, I gather the degree requirement is a harder line in the US, also worth noting that by and large university education has had no correlation with programmer ability (in business settings) in my experience, I've met good/bad with degree/without degree.
Interestingly the one correlation I have observed is how fascinating people find the field when they are children, young geeks become older geeks.
On an unrelated note, this is why I think the programs that encourage young girls to get into computing/programming are the ones with the best likely RoI in terms of re-balancing the field.
Measuring income per year misses the richest group of all. Those who would look down on anyone working.
People must be insane thinking this is some kind of luxury for rich people, not basic human needs.
78% currently live paycheck to paycheck, with this number rising year after year [0]. The endless consumerism that this type of unchecked capitalism needs to survive looks to have a pretty bleak future if we keep going down this path.
[0] https://www.cnbc.com/2017/08/24/most-americans-live-paycheck...
That said, anyone with a reasonably long career at the upper end of the professional class can make that transition by investing wisely.
It is the potential to do almost anything w here only another big player or a whole society can blunt it and not necessarily effectively.
It is the difference between playing the rules and making the rules.
I’m doing well, but I’m by no means rich. Now give me another ten years and it’s a different story.
When I fret to my partner, she says "Honey, you're being to hard on yourself, we are doing great!" But when I look at the stakes and the people I know; The only ones insulated have established families. Having established family even has it's own curse in this day and age. Insulated, sure, but kids that are too insulated via trust fund can get stuck in this weird developmental purgatory that even though they have and won't want, it's hard to find meaning or even give a shit to look for it and take on the risk for what it's worth if they weren't groomed. I've seen lack of meaning take lives.
In the next year I might break loose because I have some ownership in something interesting, but I'm acutely aware of how much it costs to transcend being the wretched of the earth. The treadmill we are on as a human race isn't sustainable. Something I think the article points out succinctly is that with greater inequality we all lose. His grandmother bet it all on the dot com boom and went to work at Wendy's. Anything that isn't an ivy league education is indentured servitude.
I'm lucky to have technology and because I have it, I guess all I can see is potentially a technological equalizer in the near future (at least I hope we can find it near), but we are all being fleeced no matter how you shake it. Globally we are in a race condition similar to a drug addict who didn't realize they were that far gone getting fired from their job. Yeah, the apartment and the girlfriend are up next. But, we have plenty of lies to stack up before then to mask like it's the status quo. This problem is going to take a good think to get solved and we'll need to get high and tight to deal with the stress.
We can still pawn grandpa's coin collection to get a fix this weekend. We'll be back on top before anyone notices.
Not sure I agree though. So someone who makes $1M per year from their work, but has no investments isn't rich?
Clearly someone who makes $1M could live of their investments.
By your definition, everyone who retires and lives off their investments is rich as well.
A pension should be considered equivalent to the assets that would produce the same returns.
Accountants have ways of accounting for pension/annuity returns. Their accounting tricks should be used in these cases.
Someone with over $1 million in assets is going to be surprised they're in the top 10% of the country? I don't buy it.
> You could strip out the hypocrisy like so: "I am not at the top, so I am still against inequality, but I am comfortable, but since I AM NOT AT THE TOP, YOU CANNOT BLAME ME, so blame the richest"
My read of the article was almost the exact opposite, namely that the author was trying to call attention to the fact that the "top 9.9%" is in fact very much to blame, as evidenced by his concluding remarks :
"It’s going to take something from each of us, too, and perhaps especially from those who happen to be the momentary winners of this cycle in the game. We need to peel our eyes away from the mirror of our own success and think about what we can do in our everyday lives for the people who aren’t our neighbors."
> but you know, at least I don't complain because when I compare it to the rest of the world, being in the lower 50% or 60% or 30% in a modern and developed country is still a pretty good life.
On the one hand, it's nice that you have a sense of perspective and can appreciate that you live a more comfortable life than most of the world's population.
On the other, there's a fine line between a stiff upper lip and stoic complacency. There will always be a greater evil somewhere in the world. Just because Mogadishu is more dangerous than my neighborhood doesn't mean I'm cool with people getting robbed outside my house.
Put more plainly : you have the right to ignore issues in your local community, but you should not try to shame others into silence simply because they're not starving.
If I said that 70% of the wealth is in the 9.99% and the remaining .01% only have 20% (or whatever it is), that would seem a little odd right? Or 9.999% have 75% and .001% only have 15%? Making cutoffs like this feels like the author is mishandling the numbers in order to make his point. Because there really is a pretty big difference between $1m (90th percentile) in net-worth and $6m (99th). $1m in net-worth quite comfortable but not "rich" by even a very liberal definition of the term in most cities (remember most of that is going to be locked up in a primary residence).
And in the end, yes, it is important to recognize our wealth and privilege and the civic responsibility that comes with it. I just don't like it when numbers are mis-represented, whether the underlying point is valid or not.
Selling the $1M house nets about $800k after capital gains. 5% investment interest on that nets about $40k/year without touching the principal.
It's definitely possible for a family of two to live on this amount fairly comfortably in a quite decent apartment in a quite decent neighborhood away from the coasts. I know because I was, and making debt service payments on top of it.
Get a part time job as a package handler at UPS or FedEx - for the exercise, of course - and you're sitting pretty.
A middle-income lifestyle without having to work meets the cutoff for my definition of rich.
It's important for petit bourgeois and wealthy skilled workers to understand their position in the class hierarchy, but calling a class whose power is dwarfed by the capitalist class an aristocracy is fluffy rhetoric.
Controlling policy is one thing.
Who "just has money" and doesn't control capital? Anyone who has money actually has some sort of capital or an equivalently powerful financial instrument be it stocks, loans to other companies, government bonds, a house, etc.
1. The vast majority of middle class wealth is locked up in (non-investment) housing. That money provides a roof and access to quality education, but in almost all cases, it's not being efficiently deployed as capital.
2. Whatever remaining money that is deployed as capital, is not done so in a way that implies control over their chosen investments. Think "majority shareholder" vs. "just another investor". That's the difference between "controlling capital" and merely having a bit of skin in the game.
There are literally 0 people I know who think owning a house is not an investment.
If you're trying to make a distinction between income generating assets and assets that don't generate income, you're just digging yourself into a hole - housing doesn't generate income, but it does save cost - namely rental cost. In that sense, it is a better investment because the return is less risky.
> 2. Whatever remaining money that is deployed as capital, is not done so in a way that implies control over their chosen investments. Think "majority shareholder" vs. "just another investor". That's the difference between "controlling capital" and merely having a bit of skin in the game.
That's well and good, but it's just as true for most people above the 10% line as for those below. You have to get to some truly lofty heights before you find the activist investors.
I thought of my house as a "use asset", like a car. It's nice when the house appreciates. But I couldn't sell it and "cash out" if I had to use the proceeds to buy another house. But, as you said, it saved on rental costs.
That was exactly the point the GP was trying to make...
This is an important distinction, don't you think?
People who derive their income primarily from investments but don't really decide anything or buy labor power are a rung below those who do. Taxonomize it however you want provided the distinction remains.
The high-net-worth individual who deposits his capital with an asset manager, or the salaried fund manager who determines which securities to buy with it?
The angel investor who puts $1M of his own money into a fledgling startup, or the entrepreneur who decides how it's spent?
The hedge fund manager who has bought 40% of the company on Wall Street, or the CEO entrusted to make the daily decisions on company operation?
I'm surprised the grandparent post has been downvoted, because when you get close to how capital is actually managed and invested, it's clear that it's a lot less clear than it looks from the outside. Even people who nominally have "control" over capital expenditures are subject to market returns. If they don't invest that capital correctly, they will lose the ability to manage more capital.
I doubt this particular point. The 98th percentile of earners make something like $200-$300k a year, the 89th percentile make about $100k/year[0]. That's a big difference, and it will equate to an even bigger difference in wealth, but not enough that the 98th percentile will substantially outweigh the combined 89th-97th percentiles. (Arguing otherwise means assuming that the one group has 8 times as much wealth per capita as the other).
It's also true that the 98th percentile includes plenty of people in the HN crowd. That's the point: well paid professional types (or software engineers) are not being hurt by the gains that accrue to the very top of the income distribution.
So far as they/we cluster in the same industries/subsectors that are growing those billionaires, we have--to some extent--shared interests. For instance, Amazon software engineers might gain by clawing back money from Bezos and the stockholders, but they don't have a monetary interest in redirecting pay to the warehouse workers.
[0] immediate googled source: https://investormint.com/investing/how-much-does-the-top-1-m...
I always thought the 99th percentile started a bit higher, but this is roughly in line with what I've read before.
According to https://dqydj.com/net-worth-percentile-calculator-united-sta..., the ratio between the 98th and 89th percentile of wealth actually is roughly 5-6x. (89th is around 1.1 million, 98th around 5.8 million).
I noted that the wealth gap would be larger, but it's still not enough to make the parent poster's comment accurate (filling in a few points, you have 93rd percentile ~ $2 million, 96th ~ $3 million, 97th ~ $4 million).
Of course, income doesn't map that directly to wealth, even after accounting for age (if your income derives from a salary/investments from savings, you expect to move up further in wealth than in income as you age). Those 98th percentile income software engineers won't be 98th percentile in wealth when they're 60 unless they save extreme amounts of money, but they'll enter that 9.9% if they're prudent.
And I think your point about the interests of the 9% being more aligned with the 1% than the 90% is an important one. Which is part of the author's point as well, that the 9% are really benefiting from the system in a way that those at the bottom aren't.
And I myself am an example of exactly this. I plug myself in those calculators and think "how much would I have to make to be in the 1%?" rather than "this is unfair, how do we lift more people up?"
It's reasonable to define 90% of the country as "lower class"? Sorry, no, I can't buy that definition. The top of the bottom 90% are upper middle class at least by any reasonable definition.
I believe that the term 9.9% is a slogan though.
Three real question is what the 9.8% can do even if completely united to fix the problem that the top 0.1% cannot stop. Unless you mean politicians (who are typically in top) - because power and wealth are related but nor equivalent - and transferable plus exchangeable.
I wonder who paid Matthew Stewart, an Oxford-educated management consultant for "large financial institutions,"[1] to write such an article.
It's a arbitrary, but it's also useful to have a cutoff point. And due to power laws, as you observed, falling below that is already too low.
It's like having a y-axis on a graph that reads: 10 100 5000 10000 (with equally spaced points) and then talking about how there's more action between 100 and 5000 than there is between 5000 and 10000.
If you think he's skewed the measure by using mean instead of median or mode and not subtracting the contributions of the .1% that's an interesting argument but you have to make it - show evidence of that, plus make the calculation to demonstrate that the effect is large. If that's the argument I might suggest dropping "bin size" and employing the term "skew."
Even simple PCA would figure it out.
What's a topological map?
The OP argument in a nutshell: "In the United States, it’s the children of the bottom decile and, above all, the top decile—the 9.9 percent—who settle down nearest to their starting point."
So how would using just a function, so as not to embarrass any one class, fix that?
We should constantly appreciate how fortunate we are are, those of us software engineers. I am hoping against my expectation that somehow there will be good jobs in the future for more than the 1% (bio-medical engineering maybe?).
This only applies to a small fraction of engineers clustered in a literal handful of geographic areas. I personally don't know a single engineer in my country that makes $200k (and the cost of living here is just as high as any major US city). Earning half that is seen as a very good salary.
Logically it should at least not hurt the rest of the market, but anecdotally : during my time in the midwest, salaries were stagnant / sticky around $80k so I would caution against overestimating the trickle down effect of coastal income.
The government holds most of the wealth.
In other words, the author just divides the top 1% into two pieces, and lumps one of them in with “the 9.9”.
Edit: I did a little research and math. The top 1% holds 40% of US wealth. The top 10% holds 77%. That’s 37% to “the 9%”. I would hypothesize that even within this 9% we’d find the wealth concentrated at the top in the “2nd 1%”, i.e., the top 2% likely make the middle class look mostly irrelevant.