Income inequality isn’t just about the 1 percent—wealth is increasing for the next 19 percent, too.

Since the recession, America’s middle class has been shrinking as a whole, and fewer people than before feel they belong in it. Meanwhile, people in the top 1 (and 0.1 and 0.01) percent have seen a steep rise in their income.

But obscured by the startling climb of the richest of the rich is a subtler, but perhaps equally concerning, trend within the layer below. The upper-middle class—taken here to mean the 19 percent below the top 1 percent—has been leaving everyone below it behind. Its income has been rising over the last three decades, while those below it remain stagnant.

Richard Reeves, senior fellow of economic studies at the Brookings Institution, explains why this is a problem:

While the rise in income and wealth at the very top is eye-catching, it also distracts attention from the action a little lower down the income distribution. The idea that the real divide is between ordinary members of the bottom 99 percent and the rich 1 percent is a dangerous one, since it makes it easier for those in the upper middle class to convince themselves they are in the same economic boat as the rest of America; they’re not.

While the rise in prosperity of the upper-middle class may not be a bad thing by itself, it exacerbates inequalities in the U.S. social system if the bottom layers don’t budge as well. Here’s a chart that Reeves includes in a follow-up blog post, showing the upward income mobility of the upper-middle class compared with the middle and bottom classes, based on data from the Congressional Budget Office:

In the chart above, you can clearly see the divide. While the income of the 19 percent below the top 1 percent (in light blue) has risen considerably over the last three decades, the income lines for the middle 40 percent (basic blue) and bottom 40 percent (dark blue) have barely inched up. Here’s Reeves again:  

The separation is not just economic. Gaps are growing on a whole range of dimensions, including family structure, education, lifestyle, and geography.

The gaps Reeves highlights are caused and compounded by discriminatory housing policies, segregated public schools, and an unequal criminal justice system, and then later inherited, so the bottom layers become less likely to move upwards, even as the upper classes keep reaching new heights.

About the Author

Most Popular

  1. a photo of Northern Virginia's Crystal City.
    Life

    When Your Neighborhood Gets a Corporate Rebrand

    From National Landing to SoHa, neighborhoods often find themselves renamed by forces outside the community, from big companies to real estate firms.

  2. A photo of a teacher at Animo Westside Charter Middle School in Los Angeles.
    Equity

    Can Opportunity Zone Tax Breaks Be a Boon for Charter Schools?

    The charter school movement is eyeing the tax incentives in the federal Opportunity Zone program to help fund school construction.

  3. Environment

    No, Puerto Rico’s New Climate-Change Law Is Not a ‘Green New Deal’

    Puerto Rico just adopted legislation that commits it to generating all its power from renewable sources. Here’s what separates that from what’s going on in D.C.

  4. Life

    How to Inspire Girls to Become Carpenters and Electricians

    Male-dominated trades like construction, plumbing, and welding can offer job security and decent pay. A camp aims to show girls these careers are for them, too.

  5. A new map of neighborhood change in U.S. metros shows where displacement is the main problem, and where economic decline persists.
    Equity

    From Gentrification to Decline: How Neighborhoods Really Change

    A new report and accompanying map finds extreme gentrification in a few cities, but the dominant trend—particularly in the suburbs—is the concentration of low-income population.