American upper class explained

The American upper class describes the sociological concept pertaining to the "top layer" of society in the United States. This social class is most commonly described as consisting of those with great wealth and power and may also be referred to as the Capitalist Class[1] or simply as The Rich.[2] Persons of this class commonly have immense influence in the nation's political and economic institutions as well as public opinion.[3] [4]

Many politicians, heirs to fortunes, top business executives, CEOs, successful venture capitalists and celebrities are considered members of this class. Some prominent and high-rung professionals may also be included if they attain great influence and wealth. The main distinguishing feature of this class, which is estimated to constitute roughly 1% of the population, is the source of income. While the vast majority of persons and households derive their income from salaries, those in the upper class derive their income from investments and capital gains.[5] [6] Estimates for the size of this group commonly vary from 1% to 2%,[7] while some surveys have indicated that as many as 6% of Americans identify as "upper class." Sociologist Leonard Beeghley sees wealth as the only significant distinguishing feature of this class and, therefore, refers to this group simply as "the rich."[8]

Sociologists such as W. Lloyd Warner, William Thompson and Joseph Hickey recognize prestige differences between members of the upper class. Established families, prominent professionals and politicians may be deemed to have more prestige than some entertainment celebrities who in turn may have more prestige than the members of local elites.[9] Yet, contemporary sociologists argue that all members of the upper class share such great wealth, influence and assets as their main source of income as to be recognized as members of the same social class.[10] As great financial fortune is the main distinguishing feature of this class, sociologist Leonard Beeghley at the University of Florida identifies all "rich" households, those with incomes in the top 1% or so, as upper class.[11]

Social class and income

Functional theorists in sociology and economics assert that the existence of social classes is necessary[12] in order to distribute persons so that only the most qualified are able to acquire positions of power, and so that all persons fulfill their occupational duties to the greatest extent of their ability.Notably, this view does not address wealth, which plays an important role in allocating status and power (see Affluence in the United States for more).

In order to make sure that important and complex tasks are handled by qualified and motivated personnel, society offers incentives such as income and prestige. The more scarce qualified applicants are and the more essential the given task is, the larger the incentive will be. Income and prestige which are often used to tell a person's social class, are merely the incentives given to that person for meeting all qualifications to complete an important task that is of high standing in society due to its functional value.[13]

As mentioned above, income is one of the most prominent features of social class, but not necessarily one of its causes. In other words, income does not determine the status of an individual or household but rather reflects upon that status. Income and prestige are the incentives in order to fill all positions with the most qualified and motivated personnel possible.[14]

Empirical distribution of income

One 2009 empirical analysis analyzed an estimated 15-26.5% of the individuals in the top 0.1% of adjusted gross income (AGI), including top executives, asset managers, law firm partners, professional athletes and celebrities, and highly compensated employees of investment banks.[15] Among other results, the analysis found that individuals in the financial (Wall Street) sector comprise a greater percent of the top income earners in the United States than individuals from the non-financial sector, after adjusting for the relative sizes of the sectors.

Millionaires

Households with net worths of $1 million or more may be identified as members of the upper-most socio-economic demographic, depending on the class model used. While most contemporary sociologists estimate that only 1% of households are members of the upper class, sociologist Leonard Beeghley asserts that all households with a net worth of $1 million or more are considered "rich." He divides "the rich" into two sub-groups: the rich and the super-rich. The rich constitute roughly 5% of U.S. households and their wealth is largely in the form of home equity. Other contemporary sociologists, such as Dennis Gilbert, argue that this group is not part of the upper class but rather part of the upper middle class, as its standard of living is largely derived from occupation-generated income and its affluence falls far short of that attained by the top percentile. The super-rich, according to Beeghley, are those able to live off their wealth without depending on occupation-derived income. This demographic constitutes roughly 0.9% of American households. Beeghley's definition of the super-rich is congruent with the definition of upper class employed by most other sociologists. The top .01 percent of the population, with an annual income of $9.5 million or more, received 5% of the income of the United States in 2007. These 15,000 families have been characterized as the "richest of the rich".[16]

colspan=3Top 5 states by HNWIs (more than $1 million, in 2009)[17]
StatePercentage of millionaire householdsNumber of millionaire households
Hawaii6.41%28,363
Maryland6.26%133,299
New Jersey6.22%197,694
Connecticut6.15%82,837
Virginia5.51%166,596
colspan=3Bottom 5 states by HNWIs (more than $1 million, in 2009)[18]
StatePercentage of millionaire householdsNumber of millionaire households
South Dakota3.39%10,646
Kentucky3.30%57,059
West Virginia3.28%24,941
Arkansas3.12%35,286
Mississippi3.06%33,792

See also

References

  1. Book: Williams, Brian. Stacey C. Sawyer, Carl M. Wahlstrom. 2005. Marriages, Families & Intimate Relationships. Pearson. Boston, MA. 0-205-36674-0.
  2. Book: Beeghley, Leonard. 2004. The Structure of Social Stratification in the United States. Allyn and Bacon. Boston, MA. 0-205-37558-8.
  3. Book: Gilbert, Dennis. 1998. The American Class Structure. Wadsworth Publishing. New York. 0-534-50520-1.
  4. Book: Thompson, William. Joseph Hickey. 2005. Society in Focus. Pearson. Boston, MA. 0-205-41365-X.
  5. Book: Thompson, William. Joseph Hickey. 2005. Society in Focus. Pearson. Boston, MA. 0-205-41365-X.
  6. Book: Williams, Brian. Stacey C. Sawyer, Carl M. Wahlstrom. 2005. Marriages, Families & Intimate Relationships. Pearson. Boston, MA. 0-205-36674-0.
  7. Book: Gilbert, Dennis. 1998. The American Class Structure. Wadsworth Publishing. New York. 0-534-50520-1.
  8. Book: Beeghley, Leonard. 2004. The Structure of Social Stratification in the United States. Allyn and Bacon. Boston, MA. 0-205-37558-8.
  9. Book: Thompson, William. Joseph Hickey. 2005. Society in Focus. Pearson. Boston, MA. 0-205-41365-X.
  10. Book: Gilbert, Dennis. 1998. The American Class Structure. Wadsworth Publishing. New York. 0-534-50520-1.
  11. Book: Beeghley, Leonard. 2004. The Structure of Social Stratification in the United States. To many this has created more Anti-Americanism around the world.. Allyn and Bacon. Boston, MA. 0-205-37558-8.
  12. Book: Thompson, William. Joseph Hickey. 2005. Society in Focus. Pearson. Boston, MA. 0-205-41365-X.
  13. Book: Levine, Rhonda. 1998. Social Class and Stratification. Rowman & Littlefield. Lanham, MD. 0-8476-8543-8.
  14. Book: Levine, Rhonda. 1998. Social Class and Stratification. Rowman & Littlefield. Lanham, MD. 0-8476-8543-8.
  15. Kaplan SN, Rauh J. (2009). Wall Street and Main Street: What Contributes to the Rise in the Highest Incomes?. Review of Financial Studies.
  16. "The Richest of the Rich, Proud of a New Gilded Age", article by Louis Uchitelle, New York Times, July 15, 2007
  17. http://www.phoenixmi.com/index.php/site/story_content/?company_id=1245 Phoenix Marketing International Research Shows Steep Decline In Millionaires in U.S.
  18. http://www.phoenixmi.com/index.php/site/story_content/?company_id=1245 Phoenix Marketing International Research Shows Steep Decline In Millionaires in U.S.

Further reading