How the Other Fifth Lives

Thomas B. Edsall APRIL 27, 2016

For years now, people have been talking about the insulated world of the top 1 percent of Americans, but the top 20 percent of the income distribution is also steadily separating itself — by geography and by education as well as by income.

This self-segregation of a privileged fifth of the population is changing the American social order and the American political system, creating a self-perpetuating class at the top, which is ever more difficult to break into.

The accompanying chart, taken from “The Continuing Increase in Income Segregation,” a March 2016 paper by Sean F. Reardon, a professor of education at Stanford, and Kendra Bischoff, a professor of sociology at Cornell, demonstrates the accelerating geographic isolation of the well-to-do — the upper middle and upper classes (a pattern of isolation that also applies to the poor, with devastating effect).

The Changing Shape of American Neighborhoods

In hard numbers, the percentage of families with children living in very affluent neighborhoods more than doubled between 1970 and 2012, from 6.6 percent to 15.7 percent.

At the same time, the percentage of families with children living in traditional middle class neighborhoods with median incomes between 80 and 125 percent of the surrounding metropolitan area fell from 64.7 percent in 1970 to 40.5 percent.

Reardon and Bischoff write:

Segregation of affluence not only concentrates income and wealth in a small number of communities, but also concentrates social capital and political power. As a result, any self-interested investment the rich make in their own communities has little chance of “spilling over” to benefit middle‐ and low-income families. In addition, it is increasingly unlikely that high‐income families interact with middle‐ and low‐income families, eroding some of the social empathy that might lead to support for broader public investment in social programs to help the poor and middle class.

Geographic segregation dovetails with the growing economic spread between the top 20 percent and the bottom 80 percent: The top quintile is, in effect, disengaging from everyone with lower incomes.

Timothy Smeeding, a professor of public affairs and economics at the University of Wisconsin, has explored how the top quintile is pulling away from the rest of society. In an essay published earlier this year, “Gates, Gaps, and Intergenerational Mobility: The Importance of an Even Start,” Smeeding finds that the gap between the average income of households with children in the top quintile and households with children in the middle quintile has grown, in inflation-adjusted dollars, from $68,600 to $169,300 — that’s 147 percent.

In an earlier paper, Smeeding and two co-authors wrote that

we have seen a threefold increase between 1972 and 2007 in top-decile spending on children, an increase that suggests that parents at the top may be investing in ever more high-quality day care and babysitting, private schooling, books and tutoring, and college tuition and fees.

The bottom line, Smeeding wrote in an email, is this:

The well-to-do are isolated from the day to day struggles of the middle class and below to provide these key services (health, education, job search and other opportunities) to aid the upward mobility of their children. But the upper middle class are happy to take advantage of tax subsidies for their own housing, preschool for their kids, and saving for college which benefit them.

Political leverage is another factor separating the top 20 percent from the rest of America. The top quintile is equipped to exercise much more influence over politics and policy than its share of the electorate would suggest. Although by definition this group represents 20 percent of all Americans, it represents about 30 percent of the electorate, in part because of high turnout levels. The accompanying chart, which shows voting patterns by income in the 2012 and 2014 elections, illustrates this phenomenon (it was created by Sean McElwee, a policy analyst at Demos, a liberal think tank).

Equally or perhaps more important, the affluent dominate the small percentage of the electorate that makes campaign contributions.

In a September 2015 essay, “The Dangerous Separation of the American Upper Middle Class,” Richard Reeves, a senior fellow at Brookings, writes:

The top fifth have been prospering while the majority lags behind. But the separation is not just economic. Gaps are growing on a whole range of dimensions, including family structure, education, lifestyle, and geography. Indeed, these dimensions of advantage appear to be clustering more tightly together, each thereby amplifying the effect of the other.

The same pattern emerges in the case of education. Reeves cites data showing that 56 percent of heads of households in the top quintile have college or advanced degrees, compared with 34 percent in the third and fourth quintiles and 17 percent in the bottom two quintiles.

People With More Money Vote More

Percent of voters turning out in two elections, by family income.

Similar patterns emerge in the percent of married households.

“Family structure, as a marker and predictor of family stability, makes a difference to the life chances of the next generation,” Reeves writes:

To the extent that upper middle class Americans are able to form planned, stable, committed families, their children will benefit — and be more likely to retain their childhood class status when they become adults.

Using 2013 census data, Reeves finds that 83 percent of affluent heads of household between the ages of 35 and 40 are married, compared with 65 percent in the third and fourth income quintiles and 33 percent in the bottom two.

As the top 20 percent becomes more isolated and entrenched, reforms designed to open opportunities for those in the middle and on the bottom “can all run into the solid wall of rational, self-interested upper middle class resistance,” Reeves argues.

At the same time that lifestyle and consumption habits of the affluent diverge from those of the middle and working class, wealthy voters are becoming increasingly Democratic, often motivated by their culturally liberal views. A comparison of exit poll data from 1984 and 1988 to data from the2008 and 2012 elections reveals the changing partisan makeup of the top quintile.

In the 1980s, voters in the top ranks of the income ladder lined up in favor of Republican presidential candidates by 2-1. In 1988, for example, George H.W. Bush crushed Michael Dukakis among voters making $100,000 or more by an impressive 34 points, 67-33.

Move forward to 2008 and 2012. In 2008, voters from families making $100,000 to $200,000 split their votes 51-48 in favor of John McCain, while those making in excess of $200,000 cast a slight 52-46 majority for Barack Obama.

In his first term, Obama raised taxes on the rich and criticized excessive C.E.O. pay. As a result, he lost ground among the well-to-do, but still performed far better than earlier Democrats had done, losing among voters making $100,000 or more by nine points, 45-54.

In other words, Democrats are now competitive among the top 20 percent. This has changed the economic makeup of the Democratic Party and is certain to intensify tensions between the traditional downscale wing and the emergent upscale wing.

The Republican Party in 2016 is an example of what can happen when the dominant wing fails to address the concerns of the majority. The rebellion against the Republican establishment is on the verge of producing the nomination of a man who is anathema to the majority of elected officials and party activists, a candidate with the potential to drag the party into minority status for years to come.

The “truly advantaged” wing of the Democratic Party — a phrase coined in this newspaper by Robert Sampson, a sociologist at Harvard — has provided the Democratic Party with crucial margins of victory where its candidates have prevailed. These upscale Democrats have helped fill the gap left by the departure of white working class voters to the Republican Party.

At the same time, the priorities of the truly advantaged wing — voters with annual incomes in the top quintile, who now make up an estimated 26 percent of the Democratic general election vote — are focused on social and environmental issues: the protection and advancement of women’s rights, reproductive rights, gay and transgender rights and climate change, and less on redistributive economic issues.

The tension within the current Democratic coalition is exemplified in, of all places, a 2012 poll of students and faculty at Phillips Exeter Academy in New Hampshire, a prestigious private boarding school founded in 1781. As Democrats have entered the ranks of the top quintile, their children haveeffectively realigned the student bodies of prep schools in New England and other northeastern states.

The Exeter survey found decisive majority support in the student body for Obama over Mitt Romney, but the more interesting finding was that among Exeter students old enough to vote, nine out of 10 identified themselves as liberal on social issues.

In the case of economic policy, however, these students were split, 30 percent conservative, 33 percent liberal and the rest moderate or unwilling to say.

“Morally, I am a Democrat,” one of the participants commented, “but my wallet says I am a Republican.”

A Democrat whose wallet tells him he is a Republican is unlikely to be a strong ally of less well-off Democrats in pressing for tax hikes on the rich, increased spending on the safety net or a much higher minimum wage.

Bernie Sanders has tried to capitalize on this built-in tension within the Democratic primary electorate, but Hillary Clinton has so far been able to skate over intraparty conflicts. In the New York primary, for example, she did better among voters making $100,000 or more than among the less affluent, while simultaneously carrying African-Americans and moderate Democrats of all races by decisive margins.

For years, Grover Norquist, a leader of the anti-tax movement, boasted that the right has built a rock-solid “leave us alone coalition,” only to see Trump crack it wide open this year.

Bernie Sanders is unlikely to do the same to the center-left coalition. Hissupport is heavily concentrated among young, well-educated, white, very liberal, independent voters and it is not broad enough to defeat Clinton, as Tuesday’s primary results demonstrated.

Anticipating this development, Tad Devine, a top adviser to Sanders, said on Saturday, “If we think we have to, you know, take a different way or re-evaluate, you know, we’ll do it then.”

Sanders’s extraordinary performance to date, however, points to the vulnerability of a liberal alliance in which the economic interests of those on the top — often empowered to make policy — diverge ever more sharply from those in the middle and on the bottom.

As the influence of affluent Democratic voters and donors grows, the leverage of the poor declines. This was evident in the days leading up to the New York primary when, as Ginia Bellafante of The Times reported, both Clinton and Sanders, under strong pressure from local activists, agreed to tour local housing projects. Bellafante noted that their reluctance reflects how “liberal candidates on the national stage view public housing as a malady from which it is safest to maintain a distance.”

The lack of leverage of those on the bottom rungs can be seen in a recent Pew survey in which dealing with the problems of the poor and needy ranked 10th on a list of public priorities, well behind terrorism, education, Social Security and the deficit. This 10th place ranking is likely to drop further as the gap widens between the bottom and the top fifth of voters in the country.

It turns out that the United States has a double-edged problem — the parallel isolation of the top and bottom fifths of its population. For the top, the separation from the middle and lower classes means less understanding and sympathy for the majority of the electorate, combined with the comfort of living in a cocoon.

For those at the bottom, especially the families who are concentrated in extremely high poverty neighborhoods, isolation means bad schools, high crime, high unemployment and high government dependency.

The trends at the top and the bottom are undermining cohesive politics, but more important they are undermining social interconnection as they fracture the United States more and more into a class and race hierarchy.

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Tuesday, 3 May 2016