When Will We Realize the U.S. Has a Gentry Class?

By way of Brad DeLong, we realize we missed an article about whiny well-to-do people, a topic we have discussed before. So let’s outsource this to David Leonhardt (and when Leonhardt sounds populist, you know you’ve entered the ridiculous zone; boldface mine):

My favorite phrase in Josh Barro’s much-discussed piece this week about who’s rich and who’s not was this one: “$400,000 isn’t a lot of money — after you spend it.”

…A common response — and you can read many in the comments section — is that a couple of hundred thousand dollars of annual income doesn’t make people feel rich. They still have to worry about their spending, unlike the truly rich. After they’ve paid for a nice house in a good school district, a couple of vehicles, a vacation or two and the normal expenses of life, not to mention putting away money for retirement and college, they don’t have much left over.

All of which is often true. But here’s the thing: Being able to afford those things is pretty good definition of affluence in modern American society.

Most Americans can’t afford a three-bedroom home in Brooklyn Heights or Brookline, Mass., let alone an S.U.V. or a ski vacation on top of it. College may be the best example: Struggling to come up with $60,000 a year to afford a year at one of the nation’s top colleges, without having to worry about financial aid, is not really a marker of middle-class status. It’s a legitimate issue for many households, but it’s also one that most Americans would gladly exchange their own problems for.

Or as Brad DeLong put it a while ago:

Only rich families in America today live in detached houses with spare bedrooms in high-tax high-cost areas (and get the services and amenities those buy), spend $36K/year on mortgage payments, $4K/year on clothes and dry cleaning, $8.5K/year on eating-out and bringing-in, $3K/year on gifts and holidays, $20K/year on daycare, babysitting, and summer camps–and still save $75K/year. That is what rich families in America do: that is how they spend their money. The fact that after they have spent their money and paid their taxes there is only $75K/year left for savings is not a sign that they are not rich.

To return to Leonhardt, this is the key point:

There is a good debate about what to call families who don’t have enormous wealth but who also make much more than most Americans. There is also a good debate about whether any changes to tax policy — the background to Josh’s article — should involve sacrifices from that group.

In the course of the debate, though, let’s at least remain cleareyed about the fact that six figures of income is not the 21st-century American norm.

I suggest we call them the gentry. They’re not middle-class (whether it be the upper or lower reaches), since they can live very differently from (or, perhaps, better than) most of us. They can have most of the nice things. At the same time, they’re not wealthy or flat-out rich: if they don’t work, they can fall down the ladder, sometimes very quickly. Living comfortably or well with the interest on investments isn’t an option.

The reason I refer to this group as the gentry is, in part, it’s the group that’s responsible for gentrification in urban areas (no gentry, no gentrification), so it seems to fit. The other reason is to intentionally invoke the Victorian notion of the word. The gentry, whether it be a more religious, conservative style, or a more liberal, less traditional style, definitely has specific class interests (boldface mine):

Yet the upper middle class collectively wields far more influence. These are households with enough money to make modest political contributions, enough time to email their elected officials and to sign petitions, and enough influence to sway their neighbors. Upper-middle-class Americans vote at substantially higher rates than those less well-off, and though their turnout levels aren’t quite as high as those even richer than they are, there are far more upper-middle-class people than there are rich people….

Another thing that separates the upper middle class from the truly wealthy is that even though they’re comfortable, they’re less able to take the threat of tax increases or benefit cuts in stride. Take away the mortgage interest deduction from a Koch brother and he’ll barely notice. Take it away from a two-earner couple living in an expensive suburb and you’ll have a fight on your hands. So the upper middle class often uses its political muscle to foil the fondest wishes of egalitarian liberals.

…part of my objection is that upper-middle-income voters only oppose tax hikes on themselves. They are generally fine with raising taxes on people richer than themselves, including taxes on the investments that rich people make in new products, services, and businesses. I find that both annoyingly self-serving and destructive. The bigger reason, however, is that upper-middle-class people don’t just use their political muscle to keep their taxes low. They also use it to make life more expensive for everyone else.

…You’d almost get the impression that while working- and lower-middle-class people are expected to compete, whether with the Ubers of the world or with Chinese manufacturing workers or with immigrants with modest skills, members of the upper middle class ought to be immune.

Leaving aside Salam’s conservative take on things (very different from the Mad Biologist!), he’s on to something, though I would argue what Salam calls upper-middle class is actually a gentry, with very clear economic interests. While there can be cultural and regional disagreements, en masse, they are quite coherent.

While the U.S. pretends to be a class-free society (even as U.S.-ians spend an inordinate amount of time making very subtle class distinctions), the reality is we do have classes with specific economic interests.

It’s time we realize we have a gentry.

This entry was posted in Economics. Bookmark the permalink.

2 Responses to When Will We Realize the U.S. Has a Gentry Class?

  1. Min says:

    After moving to California in the 1990s it struck me that one consequence of Proposition 13 was the creation of a landed gentry. Well, maybe we would have gotten one, anyway. As for what to call them, I prefer Los Ricos. 🙂

  2. Pingback: Wednesday Link Encyclopedia | Clarissa's Blog

Comments are closed.