Rising Economic Inequality and Class Divisions in America: A Socio-economic Class Lifestyle Profile

Y. Datta

Abstract


Conservatives have long perpetuated a myth that America is a classless society. In this paper we have shown that, in reality, America is
a deeply divided nation.
Economic inequality in America has been going up unrelentingly, squeezing the middle class for more than three decades. America’s
income inequality has now widened so much that it rivals the highest level recorded in 1928 that led to the Great Depression of 1929. Likewise,
there is an extraordinarily high concentration of wealth at the top.
This vast economic inequality has now triggered a peaceful grass-roots protest movement in 2011, called the Occupy Wall Street (OWS).
The underlying theme of OWS is that large corporations, particularly Wall Street, have a corrupting influence on politics and democracy through
massive campaign contributions to influence government policy that primarily benefits the top 1% vs. the 99%.
Contrary to the popular belief, it is the top 0.5%—not1%—that has been by far the largest beneficiary of America.s huge economic
inequality. While the incomes of the top 0.5% and .01% have risen dramatically since 1973, the median family income has virtually remained
stagnant. In 2007 the top 0.5% families—America.s upper class—earned close to a fifth (19.3%) of the pre-tax income of all U.S. families: up
from 6% in 1975.
In 2007 the top 1% households owned 35% of all privately held wealth and the bottom 80% only 15%. Compared to many industrialized
European nations, Canada, and Japan the U.S. is the most unequal country in terms of wealth distribution.
This paper has three objectives. First we present empirical support for enormous economic inequality in America. The second objective
is to develop a socio-economic class lifestyle profile of America. Third, we discuss why the rich are getting richer, and what the social implications
of extreme economic inequality are.
Based on the income data analyzed in this study, we have developed an economic class structure of America that has six classes: The
“Poor,” the “Near Poor,” the “Traditional Middle Class,” the “Upper Middle Class,” and the “Upper Class” (The Very Rich/The Rich, and The
Super Rich).
Combining this framework with social class and price-quality segmentation, we have created a socio-economic class lifestyle profile of
America that reveals six classes: (1)“Survival”, (2) “Just Making It”, (3) “From „Keeping up with the Joneses” to “Good Quality Public Schools
in Suburbia”, (4) “Cultured Affluence”, (5) “Conspicuous Consumption” and (6) “Masters of the Universe”.


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