*Uneasy Street: The Anxieties of Influence*

That is the new and interesting book by Rachel Sherman, consisting primarily of field work and interviews with the very well-off.  Here is one bit:

…they described their desires and needs as basic and their spending as disciplined and family-oriented.  They asserted that they “could live without” their advantages if they had to, denying that they were dependent on their comfortable lifestyles.  They distanced themselves from the negative images of consumption often associated with the wealthy, such as ostentation, materialism, and excess — all markers of moral unworthiness.  These interpretations allowed them to believe that they deserved what they had and at the same time to cast themselves as “normal” people rather than “rich” ones.

…for my respondents to be a “good person” was not to be entitled.

The rich themselves seem to be fond of the distinction between “the deserving rich,” and “the undeserving rich.”

You can pre-order here.  Here is the book’s home page.

Comments

There are countless times I've seen people with household incomes north of $150K claiming that they aren't rich. That they're middle class. It's a ridiculous pretense.

Depending on where they live that could absolutely be a true statement. It's a sign of just how wonky things have gotten economically.

Yeah isn't "rich" context dependent? A household income of $150K in TN is what, top 5%? I guess that's 'rich'. In NYC or SF, that's solidly middle class.

Also. is 'rich' income-based or asset-based?

"I guess that’s ‘rich’. In NYC or SF, that’s solidly middle class."

No it's not. It's not even close.

"The median household income across New York City stands at $50,711, according to 2010-2012 estimates from the U.S. Census Bureau. "

https://project.wnyc.org/median-income-nabes/

"The Census ACS 1-year survey reports that the median household income for the San Francisco-Oakland-Fremont California metro area was $88,518 in 2015,"

http://www.deptofnumbers.com/income/california/san-francisco/

Another way to look at that is that there sure are plenty of poor people in NYC if the median HHI is so low.

Not necessarily all poor. Some are definitely not bothered by having to earn earn "income" for one reason or another.

"Not necessarily all poor. Some are definitely not bothered by having to earn earn “income” for one reason or another."

Now that's a point I hadn't considered and it could effect the conclusion.

Are there a significant amount of high wealth people without high "income"? I think even for trust fund babies, their endowment transfer is taxable as income. Granted, you could have very wealthy people living off of their own post-tax money, but that's almost always money that was income at an earlier time.

Multiple 25 year olds without kids living in the same apartment filing individual tax returns look a lot poorer than they are also.

"Multiple 25 year olds without kids living in the same apartment filing individual tax returns look a lot poorer than they are also."

The U.S. Census distinguishes between "family" and "household" income for exactly this reason. People living together in the same residence are considered one household, regardless of whether they are related or not.

Ricardo, this is news to me. So, for instance, four graduate students living in a four bedroom apartment, each filing individual income taxes, and each being party to the lease are considered one household? And, what if the rooms themselves are numbered and with locks? 101A, 101B...

Here's an article on that: http://www.slate.com/blogs/moneybox/2014/08/29/income_distribution_of_new_york_city_what_does_it_take_to_be_rich.html

A household income of $150K still puts you in roughly the top 12% in NYC. But in SF well over 20% of households make more than that mark.

Couldn't find data presented for Tennessee, but the 95th percentile is about $160,000, so you weren't far off.

Frankly, I find the reference to NYC an SF kind of amusing in a "The Hunger Games" kind of way.

I can just imagine someone living in the Capitol, with an income that puts them in the top 20% of that level of income, complaining on how they struggle to cope with the high cost of living. Why do you know how much the tuition for Jonathon's pre-pre-Academy for the Smart and Deserving cost this year? If we don't get him enrolled at 3 then he'll struggle for the rest of his life!

Fine, but still, "rich" is entirely a relative term. NYC was maybe too broad of a polity to consider, as $150K in the Bronx is very different from $150K in Manhattan south of 110th Street.

You say "oh just move to the sticks and be rich". Well sure, it worked for Ray Lopez. If your job and high income can come with you, go ahead. "Rich" is relative.

"“Rich” is relative."

Is this how high-income Democrats compartmentalize their enormous hypocrisy? Bernouts marching down NYC streets with $200 shoes. Lol

Thomas is more spluttery than usual today, probably upset about Bannon getting canned.

Living in NYC is a benefit and so yes they are rich. Especially if they are like and MD who could relocate to say upstate NY.

Great point. These people will simultaneously espouse the cultural benefits of living in NYC while asserting that they aren't really wealthy because NYC is expensive. The differential between a 2 bedroom in Manhattan and a 2 bedroom in the bayou is the cost of your cultural consumption good, you economically-illiterate, virtue-signalling, champagne socialists.

The idea that your living place somehow determines whether a given income level makes you rich is ridiculous. People are free to choose where they live. Rich people live in rich people areas and thus spend more on living costs. If I move to a rich people neighborhood where an average home costs 10 million dollars and the only grocery shop is some fancy rich people shop where bananas cost 10$ a piece and I can just barely afford it all, I'm still rich. I just chose to spend my vast riches on choosing my neighborhood.

Living in a relatively crime-free neighborhood in NYC or some other posh city is a luxury that rich people can choose to spend their money on just like Ferraris and private planes are.

To be fair, this site says the top 5% in household income is about $200k.

https://statisticalatlas.com/United-States/Household-Income

The normal literature classifies the top 5-15% as Upper middle class and the top 5% as the rich. There aren't a whole lot of places that $150K doesn't put you in the top 5%.

For reference, in New York City making $210K puts you in the top 5%. The highest Statewide population is Maryland at around $75K. So some with a household income of $150K is making twice what the median is in the state with the highest median.

In what world is a household income of $150k rich? That's solidly upper-middle class if ever there was a figure for it.

Unless you're speaking globally, in which case a full quarter of the U.S. is "rich."

"In what world is a household income of $150k rich?"

In the real world of working day American's.

"The Rich 5%: Leonard Beeghley - Households with net worth of $1 million or more; largely in the form of home equity. Generally have college degrees."

https://en.wikipedia.org/wiki/Affluence_in_the_United_States

You'll note it's debateable, the terminology isn't precise. But I'll guarantee you that families at the 25% percentile income view those at the 95% income as "rich".

I wouldn't want most of my assets being in my house. Value depends too much on my neighbors.

Yes, quarter of the US is indeed rich. The whole notion of "relative poorness/richness" doesn't make any sense. If we define poorness/richness relative to local environment, some millionaire living in a neighborhood mostly inhabited by billionaires is "poor". Also, with that definition, eliminating poverty would be impossible except by forcing everyone to have exactly the same wealth and income.

And, how many years during that household's existence does it need to have income "north of $150K" to be considered "rich"?

I agree.

An income of $150K is going to be under $10K per month after taxes, health care and so on. When the average rent for a 1BR in San Francisco is close to $4K, that doesn't go as far as you'd think. Only about half the rental units there are rent-controlled.

My definition of rich is different from yours: someone who doesn't have to work for a living. The assets needed to support that vary depending on where you live and what kind of lifestyle you enjoy. Given the low returns to capital nowadays, it also requires 2x to 4x in assets than a decade ago. Someone frugal living in Omaha might be rich with a couple million in assets.

"An income of $150K is going to be under $10K per month after taxes, health care and so on. When the average rent for a 1BR in San Francisco is close to $4K, that doesn’t go as far as you’d think. "

That still leaves $6K a month for expenses after paying for houses. That's an enormous amount of discretionary income for most Americans.

"My definition of rich is different from yours: someone who doesn’t have to work for a living."

That's usually the definition of independently wealthy. So, yes by that definition, obviously someone who requires income to maintain their lifestyle is not rich. But keep in mind, by that standard Johnny Depp is not rich. The man live paycheck to paycheck. Granted, they're $10 million paychecks.

"Someone frugal living in Omaha might be rich with a couple million in assets."

A couple million in assets should conservatively generate (4%) around $80,000 per year. So, about half the $150K I mentioned per year. But yes, I'm sure they could frugally scrape by.

I think they will end up with less than 110 k a year because of social security taxes and California taxes ( high tax rate ). Health insurance may or may not be included with their job benefits. Living in a one bedroom apartment in SF with say one kid isn't going to feel particularly rich. They would have no path to owning a house there; they could not afford the mortgage. In addition In CA utilities and gasoline are close to the most expensive in the nation. I agree though it would probably feel rich in most other places in the US.

After payroll and income taxes your 150k family come out with abiut 90k. Subtract another 1k per month for health care contributions and more for 401k. You're at 65k.

Your 150k household could would be spending more than 3/4 of its take home on 4K rent and would feel very poor indeed. If they had kids, they basically could not live in the city.

If they live in an expensive city and are young enough still to be laden with debt, that could be true.

There are countless times I’ve seen people with household incomes north of $150K claiming that they aren’t rich. That they’re middle class. It’s a ridiculous pretense.

If they do not have assets, they're not rich. Affluent, perhaps, but not rich.

The mean compensation for a physician is about $230,000 a year. The one I know best lives in a modest 3 bedroom house (rented), has a small family (his wife couldn't have more than 2 children because ladies' problems), and is carrying quite a load of debt. They have a negative net worth and cannot afford a down payment on a house. They are members of the professional-managerial bourgeoisie, not the wealthy. They both grew up in that class too, one in a small town, the other in a ratty 3d tier city.

That's pretty much true of professional-managerial people generally under a certain age.

I make close to that, don't consider myself rich. Rich is for people whose taxes the Democrats publicly advocate raising. Much of "class" is based on identity rather than income. How close do you feel to the CEO class? For me, the answer is not close at all. Libertarians see it differently.

And even over that point, I wouldn't consider myself rich. Rich would be ~500k per year in income.

I am a corporate lawyer, as is my wife. According to this book, we are rich, even though my preferred term would indeed be well-off. We did not get there through privilege, we got there through hard work. I grew up on a small farm, my wife's family came to this country as political refugees with absolutely nothing.

So, yes, I do consider ourselves as deserving rich. I would not contrast that with undeserving rich, but I do see a different category - the tax-advantaged rich. My wife and I pay an effective income tax rate of close to 50%, while hedge fund managers pay 25%. Republicans who like to invoke Ronald Reagan, and Democrats who blame him for his economic policies, should remember that Reagan equalized ordinary income and capital gain rates. Any debate about inequality should start there.

Yes, I see this as a problem as well. We are two W2 earners. Unless you can get a sweet deal like the KS coach where you get paid as a corporation, you get soaked.

Treat all income the same. Lower the rates, broaden the base. Revenue neutral if you must.

I think the question is not whether people deserve or not deserve to be rich. Clearly hard work and talent should be rewarded and incentivized.

The question, rather, is "how rich does one deserve to be?" More people "deserve" to be middle class or above based on their hard work and talent. I don't see how someone can "deserve" to be a multi-billionaire, except perhaps for those who effect drastic improvements in the lives of millions, like Norman Borlaug.

If that's the question, then the next question is "who decides?"

I am a corporate lawyer, as is my wife. According to this book, we are rich, even though my preferred term would indeed be well-off. We did not get there through privilege, we got there through hard work.

Generally nice guys finish last in corporate America, so it's likely that there was some back-scratching and backstabbing in there also.

No they don't. Generally nice people may not be the CEO, but nice, hard-working people generally do well in this country. Inside or outside corporations.

Lazy people finish last.

+100

Agreed.

"Up or out" used to be the explicit hr policy in only a few industries.

Increasingly it is becoming the rule rather than the exception.

After a certain point in most careers you can be summarily replaced by someone cheaper and harder-working than yourself - unless you either a) have some amazing exceptional skills (generally this means management skills or an amazing track record in sales or marketing b) you know how to play the corporate mafia game.

If you are some kind of knowledge worker or skilled worker (engineer, scientist, graphic artist) you will have little chance of keeping a full time job til you retire.

If you are a tenured academic you can just ignore the phenomenon.

I don't think this is an accurate picture of corporate America today, but I think it's probably trending that way. If automation kicks into high gear, it may become a societal crisis.

Automation, and also free immigration

"we got there through hard work." Good for you. But you surely aren't implying that everyone who works hard gets rich? Or that only the rich work hard?

No, but anybody who works hard in this country can reach an income level that, by the standard of some commentators on this site, could be considered being rich.

Really? Anybody? Even with an IQ of 85, a rotten education, poor physical coordination, and in rather poor health? Anybody?

Or is your point that "some commentators on this site" are foolish?

Nobody here is foolish. The plain fact that they all read an economics blog already proves it.

I have a colleague in my law firm who was born with a neurological condition and has been in a wheelchair his entire life. He cannot move his arms or hands, but he can type on a special keyboard attached to the wheelchair. He works hard, he is always positive, and he NEVER complains.

Many of the disadvantages you mention can be overcome with determination. Some cannot, like low IQ or poor health that affects the ability to work. But then let's address these conditions by targeting them specifically, not by blaming those in higher income classes. Increasing taxes on people who work hard will not make anybody else smarter or healthier.

Taxing =/= blaming. Where else do we get the money to "address these conditions by targeting them specifically,"?

The table of contents does not list a chapter on McMansions. It would be interesting to know their opinion on them.

Ps. a tangential issue: what's up with the "used" versions of the book that has not been released yet? Why are they more expensive?

McMansions are part of the never-ending crusade to prove that the taste of others is objectively wrong. I say, who cares if people want to live in them? I think they are kind of ugly, but not as ugly as the cutting edge architecture that "cultured" people are supposed to like.

Also, the use of "Mc..." as a pejorative term is another example of the same phenomenon. McDonald's hamburgers taste good, but of course it is "wrong" to think that.

I think the "Mc" pejorative here is about the cookie-cutter sameness of McMansions, just churned out like fast food burgers, all looking pretty much the same.

No one believes that you think the "Mc" prefix is not intended to be derogatory.

It is derogatory, all those McMansions are ugly, cookie cutter, sterile, soulless boxes. But people are free to live in them, and others are free to criticize the aesthetics of them, which are terrible.

"ugly, cookie cutter, sterile, soulless boxes"

They really aren't. What they aren't is extremely expensive modern high taste nor the vestige of once powerful buildings that are no longer economical to build. So no exposed brick because brick is extremely expensive and the building didn't come from a time of cheap bricks and cheap labor. And no sharp lines with sprawling spans because steel beams are expensive. You think that you are coming from a position of taste, but you are aren't. You have simply assumed the pretentiousness of your betters. Can you imagine a chump like you sneering at a 400 - 700k house because it isn't good enough? Lol. You'd love to live in a "McMansion". If you live in NYC, the small, cheap box you live in is like a "McMansion" minus the mansion.

"I think the “Mc” pejorative here is about the cookie-cutter sameness of McMansions"

As if you own original art that has artistic value. As if a print of a master's work isn't good enough for you. You can sneer like your Hollywood and Washington favorites, but it doesn't make you one of them.

Keep at it, Thomas, it's fun watching you froth.

Thomas, show me one symmetric, proportioned, consistent and well built McMansion. Wait........the absence of those features is the definition of McMansion, not the price of floor area.

The most vehement and vociferous attacks on McDonald's and other such establishments come from the political left. That's fine as far as it goes (they tell us they are the enlightened ones on this score and they might be right; personally as a former endurance event athlete, I eat more quinoa and kale, than fries and fake ice cream but that's out of habit).

Surely some of the venom is on behalf of the urban underclass, which positively lives on "fast food". But it is impossible to chastise the masses for their choices so the attack is directed at the corporation.

My question, naive as it may be, is: why is it not possible for the left to chastise the masses?

Once all my physical and intellectual needs are satisfied, what else can I do besides having fun? There are jokes about rednecks, mexicans, why not McMansions? Does laughing at unsymmetrical and poorly built houses triggers MR commenters?

Ps. MCD hamburgers? No, never. MCD equity? YES!!!

Why not both? McD's is delicious, nothing wrong with it once in a while. In N Out is exponentially better of course, but harder to find.

1) noisy kids, 2) no alcohol.....at least beer please.

Try the ones in Europe.

Once all my physical and intellectual needs are satisfied, what else can I do besides having fun?

Well you could try contemplating the shallowness and vacuousness of the American careerist lifestyle .....

Houses are supposed to be symmetrical or there's something wrong with them?

For the record, I have absolutely no dog in this fight, as the attractiveness or lack thereof of houses isn't something I understand even a little. I just find that claim surprising.

When I see them, I care. When one is built near my house, I move to another house. Externalities, etc., you know the story... For McDonalds's hamburgers, I don't think they taste good but I don't care. No obvious externality here.

Two things:

1. The title should be "affluence", not "influence", sir.

2. The idea that whether one is rich depends upon how rich everyone is around you is excrement. If you have a high income, and so do those around you, you're not middle class--you live in a place rich people live.

I live in SoCal now, surrounded by people whose incomes triple median household income nationally (not to mention internationally). They whine because housing is expensive, missing that *they live in the nicest climate on earth.* They're not middle class, and neither am I, and it insults people who actually are to say otherwise.

"2. The idea that whether one is rich depends upon how rich everyone is around you is excrement. If you have a high income, and so do those around you, you’re not middle class–you live in a place rich people live."

" They’re not middle class, and neither am I, and it insults people who actually are to say otherwise."

Agreed. Both of those statements show wisdom.

+1

I agree with this, yet you could apply the same principle to a family with one child under the poverty line in the US with $20,000 of income that they are middle class in the world considering the billion or so in Asia, and Africa trying to get by on much less.

Agreed.

+1
Of course we should allow more subdividing and building.

Nimbyism takes different shapes. Nobody in San Francisco considers themselves wealthy until they break 400k, and even then they complain about student loans, the cost of raising a child, real estate prices, who lives next store and so forth.

Thomas Sowell made the important observation that most of these distinctions in income level are not so static, and to a large extent a proxy for age.

"A University of Michigan study showed that most of the working people who were in the bottom 20 percent of income earners in 1975 were also in the top 40 percent at some point by 1991. Only 5 percent of those in the bottom quintile in 1975 were still there in 1991, while 29 percent of them were now in the top quintile."
http://www.nationalreview.com/article/282503/whos-top-1-percent-thomas-sowell

" as $150K in the Bronx is very different ... You say “oh just move to the sticks and be rich”. "

It looks like you just equated living in the Bronx as living in the sticks. If you are having to put that fine a gloss on your point, then Occam's Razor indicates that your point is probably wrong.

Essentially you are attempting to frame an argument for being rich in America by using NYC as an example. That's cherry picking the data.

Fine, so you deny that 'rich' is context dependent?

No. I deny that in the context of rich in American, claiming you aren't rich because you moved to a place where extremely rich people live, isn't relevant.

Certainly the IRS doesn't think it's relevant.

Then every American is rich except the very very bottom, because they live in one of the richest countries on Earth. They live where rich people live, the United States.

You're catching on.

Exactly! We could do so much more for humanity by redirecting most of our public spending to other countries... and I'm not kidding...

Oh I'm very grateful I won the genetic lottery being born here, I get that we're all globally rich. The post is discussing how "rich people" think, so if our response is almost all Americans are "rich" then we've sort of changed the subject.

You seem to assume that you get a given level of income, and then, independently, you choose where to live. Of course, often it does not happen like that. You can have a given level of income because you live in an expensive area. If you move to somewhere cheaper, you may not get the same level of income.

"You seem to assume that you get a given level of income, and then, independently, you choose where to live."

No, I didn't assume that. I'm saying that $150-200K is rich in America.

A person with an IQ of 120 is a smart person, even if he's the dumbest guy eating lunch at Google's cafeteria.

Here's some data:

"Affluence and economic standing within society are often expressed in terms of percentile ranking. Economic ranking is conducted either in terms of giving lower thresholds for a designated group (e.g. the top 5%, 10%, 15%, etc.) or in terms of the percentage of households/individuals with incomes above a certain threshold (e.g. above $75,000, $100,000, $150,000, etc.). The table below presents 2006 income data in terms of the lower thresholds for the given percentages (e.g. the top 25.6% of households had incomes exceeding $80,000, compared to $47,000 for the top quarter of individuals)."

Household income:

Top 10%: $118K

Top 5%: $166K

Top 3%: $200K

Top 1.5%: $250K

https://en.wikipedia.org/wiki/Affluence_in_the_United_States

I think a lot of posters are arguing against overwhelming data.

Suppose you're a slave, and that your generous master gives you an allowance of $500K a year, but takes a payment of $499,999 per year for your room and board (which you can't leave, because you're a slave).
Would this slave be rich, in today America? Obviously not, though he has a nominal income of $500K, well in the 1%.

Now, I am not saying that rich people in America are like slaves, what I am saying with this "thought experiment" is that a big income relative to other people doesn't always mean you are rich -- not
in particular when the income comes with condition (on where to live, etc) which takes away a large part of this income. And this apply to certain (not all of course) of people who are high-income in America.

Example: you're a professor at Stanford who make $300K. That's a very good salary, for an academic and absolutely. But then the cost of live in a radius of 30 miles around Stanford is absolutely crazy. The meanest house is 1.5 million, day care is more than twice as expensive as in the rest of the country, etc.
You may move. You'll probably get easily a position in Minneapolis or Boulder or something, where live is much less expensive. But it is very unlikely that you could obtain the same salary there.

"Example: you’re a professor at Stanford who make $300K. ...You’ll probably get easily a position in Minneapolis or Boulder or something, where live is much less expensive. But it is very unlikely that you could obtain the same salary there."

Yes, that's true. But that same Professor is probably going to get at least $150K working in Minneapolis. And he's still in the top 5% of household income, even if no one else in the house works at all.

I think you are missing the point. I'm not saying that there aren't cost of living differentials. I'm saying that people at the range of income of $150K and above are rich by the normal American standard of rich. And outside of some seriously cherry picked examples (Manhattan, the wealthy neighborhoods of San Francisco, etc), this is just a statistical fact.

These conversations make me think that a lot of people commenting on this blog live in a serious bubble.

If 'desert' is really a well-defined concept (which I doubt), then everyone, not just the rich, should be "fond of" the distinction between the deserving and the undeserving rich, as well as that between the deserving and the undeserving poor and that between the deserving and the undeserving middling.

If ‘desert’ is really a well-defined concept (which I doubt),

Oh, it is. It's defined pretty strictly by the amount of precipitation that falls in a year

Hey, I resemble that.

I know that I could live on a modest income because I did in my late 20's I was washing dishes (the only job I was every really good at) and m wife and I only spend about $50k or $60/year (a big chunk of that on vacations) now. I pay more in taxes that I spend each year.

How much of the signalling and complaining about not being rich is an expression of anxiety about not staying well off? I'd guess most.

I mean that is why they called it uneasy street, yet the comments above seemed in a different direction.

Yeah the post was about the anxiety of rich people and most of the comments are 'hey we're all rich if we lived in Iowa or Brazil'.

No, you wouldn't. Brazil is the world's eight economy.

Brazil is the ninth biggest economy. Behind both India and Japan.

Yes, as a member of this group who has lived in both CA and TN, this feels like a much more interesting topic to discuss and explore. My experience is that whether they can say it explicitly or not, the 5-15%ile families are terrified of slipping down the ladder. It brings all these fascinating and conflict-avid concepts together: automation, globalization, free trade, a 1% GDP growth world, Turchin's elite overproduction shtick, competition from high-skill and harder working immigrants. I think it's influencing a whole bunch of yuck: NIMBYism in housing, turning child-rearing into a specialty-driven arms race, college and grad school cost escalation, and then by connection, all the sturm und drang (sorry) on television and maybe increasingly in the streets.

I was too young to remember the 70s too well, but to the older members of the MR commentariat - is this what those times felt like?

+1. Is it the 60s (the social unrest, black vs white, etc) or the 70s (terrible president(s), general malaise, etc)?

I would wager the people claiming they're 'not rich' are assessing their assets and estimating their retirement income.

Not Surprising. The most common human trait is self-interest. The most common human shortcoming is self-delusion.
I, too, have known hundreds of people pretty well, from all walks of lives, spanning 6 decades and many states and nearly all of them felt they were responsible with money and were not spending on extravagances, regardless of income; $20,000 to $500,000 a year.
There is a very old saying; it's not what you make it's how you spend it. For the most part, that is true
To relate this obvious fact to a contemporary discussion: This human trait is why a basic wage, or a universal income, is a ridiculous idea.

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