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]

Many sociologists ranging from W. Lloyd Warner in 1949 to William Thompson and Joseph Hickey in 2005 have recognized prestige differences between different members of the upper class. Established families, prominent professionals and politicians may be stipulated 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

Those taking the functionalist approach to sociology and economics view existence of classes as necessary[12] in order to distribute persons so that

  1. only the most qualified are able to gain positions of power, and
  2. all persons fulfill their occupational duties to the greatest extent of their ability.

Notable, this view completely ignores 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]

Rising inequality

See also: Income inequality in the United States.

The upper class, distinguished almost solely by its affluence and commonly defined as the top 1%, has been pulling ahead of the bottom 99% of the population.[15] [16] Between 1979 and 2005 the mean after-tax income for the top 1% increased by an inflation adjusted 176%, compared to an increase of 69% for the top quintile overall, 29% for the fourth quintile, 21% for the middle quintile, 17% for the second quintile and 6% for the bottom quintile, respectively.[17] Their share of the aggregate net income has increased from 7.5% in 1979 to 14% in 2005.[18] Their share of pre-tax income has reached its highest levels since 1928.[19] [20] [21] The main cause of their increased fortunes are more bargaining power in the labor market, which has resulted from the declining political clout of unions, and less government redistribution.[22]

Millionaires

Households with net worths of $1 million or more may be identified as members of the upper-most socio-economic demographics, depending on class model used. While most contemporary sociologists estimate that only 1% of households are members of the upper class, sociologist Leonard Beeghley states all households with a net worth of $1 million or more to be "rich." He divides "the rich" into two sub-groups: the rich and the super-rich. The simply 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 largely 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. Beeghley does acknowledge that most households with a net worth of $1 million, a group that includes many middle class professionals, would largely identify as "upper middle class." The super-rich, according to Beeghley, are those able to live off their wealth. 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".[23]

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. Web site: Johnston, D. (5 June, 2005). Richest Are Leaving Even the Richest Far Behind. The New York Times. 2007-06-20.
  16. Web site: Yellen, J. L. (6 November, 2006). Speech to the Center for the Study of Democracy at the University of California, Irvine. Federal Reserve Bank of San Francisco.. 2007-06-20.
  17. Web site: Aron-Dine, A. & Sherman, A. (January 23, 2007). New CBO Data Show Income Inequality Continues to Widen: After-tax-income for Top 1 Percent Rose by $146,000 in 2004.. 2007-11-24.
  18. Web site: Aron-Dine, A. (October 24, 2007). New Data Show Income Concentration Jumped again in 2005: Income share of top 1% at highest level since 1929.. 2008-01-17.
  19. Web site: Johnston, D. (29 March, 2007). Income Gap Is Widening, Data Shows. The New York Times. 2007-06-20.
  20. Saez, E. & Piketty, T. (2003). Income inequality in the United States: 1913-1998. Quarterly Journal of Economics, 118(1), 1-39.
  21. Web site: Saez, E. (October, 2007). Table A1: Top fractiles income shares (excluding capital gains) in the U.S., 1913-2005.. 2008-01-17.
  22. Weeks, J. (2007). Inequality Trends in Some Developed OECD countries. In J. K. S. & J. Baudot (Ed.), Flat World, Big Gaps (159-174). New York: ZED Books (published in association with the United Nations).
  23. "The Richest of the Rich, Proud of a New Gilded Age", article by Louis Uchitelle, New York Times, July 15, 2007

Further reading

See also