The top 10% of earners—households making about $250,000 a year or more—are splurging on everything from vacations to designer handbags, buoyed by big gains in stocks, real estate and other assets.
Those consumers now account for 49.7% of all spending, a record in data going back to 1989, according to an analysis by Moody’s Analytics. Three decades ago, they accounted for about 36%.
The top-level post uses a gift link. When it runs out, there is an archived copy of the article.
Maybe we should stop measuring the state of economy using the metrics rich people invented to convince everyone it was a good thing for them to get richer in the first place…
Seriously, “Rich people spend more money” Well no shit… They have the money to spend. The broke population doesn’t have shit to spend
Maybe the economy would being doing better if 90% of people had money for basic needs and maybe a little left over afterwards for shit like I dunno, cars, hobbies, charity, advocacy and events.
Remember, not that long ago, a single working man could provide for a house, 2 cars, a wife and 2.5 kids.
Nowadays, it takes DINKs deep into their careers to afford a starter home.
not that long ago, a single working man could provide for a house, 2 cars, a wife and 2.5 kids.
While women worked for pennies on the dollar, people of color weren’t allowed to go to school with white people and women didn’t go to college, they went to secretarial school. Plus tons of people were dying from all manner of health conditions because there were no regulations for practically anything.
The “golden days” have some serious nostalgia but they were far more fucked up than people remember. Buying a home from 0 has always been like living in poverty for almost everybody in the US. Only the top earners have ever had vast excess of earnings.
When houses were 35k people were making $3500/year or much, much less.
Go far enough back and yes the negative things were absolutely true for non-white men. However houses used to cost a much smaller portion of a median earners income and this was true after we started to turn things around for women and minorities.
Let’s try 1980 not exactly the dark ages. Median income was $9400 and the median home was 55k. 5.8 years of wages. Someone could actually save up for and potentially actually buy perhaps not a median but a starter home right out. for 3 years of wages.
Median home is now 419k median income is 50k. This is now 8.2 years of wages. You will have to get a mortgage and in fact pay around 22 years of the median wage to pay the bank interest. Worse medical care, college, and rent have also skyrocketed so you may not be able to get up enough to even do that if you haven’t already bought in leaving you paying even more to your landlord.
https://dqydj.com/individual-income-by-year/ https://dqydj.com/historical-home-prices/
The economy doesn’t depend on rich people. If there were no billionaires, the economy would tick along just as it does now.
A friendly reminder that articles like this serve to create infighting among the worker class.
Someone earning $250,000 is definitely rich, but they’re nowhere even close to the level of rich that makes wealth distribution problematic. And they’re probably working for that income.
Check out Wealth Shown to Scale (Archive link here because apparently the page is down).
Everyone who isn’t a billionaire ought to be on the same side: against billionaires. But the WSJ publishes stuff like this to make you direct your ire at doctors and lawyers instead of at the people leeching from society.
People making 250k are largely on the side of the billionaires. They are reliable votes for the interests of the rich.
Because they are falling for the same propaganda, but on the other side of the coin. Don’t waste your time vilifying them for falling for the same line we all do. It serves no purpose except to make you angry.
They also intentionally frame a really bad thing as a “good” thing. The situation here is not that the “rich” run the economy - it’s that everyone else is being priced out of the economy by wage stagnation and rising costs of living.
The alternate headline here is “wealth inequality surges, 90% of Americans now account for only 50% of consumer spending”
Or
“1 in 10 Americans spending as much as the other 9 combined, while 3 of them live paycheck to paycheck”
People earning 6 digits a year are still one bad accident or diagnosis away from losing their jobs and living in poverty. They’re not the root problem or the solution to the economy, and this article is trying to paint them as both.
Instead we need to acknowledge that the people “earning” 8-10 digits per year are extracting and hoarding that money away from the 90% of Americans who would otherwise be spending it in ways that would actually improve the economy.
Someone earning $250,000 is definitely rich
Having earned that for several years (though not any longer), in the SF bay area where I lived, that was the lower end of the upper middle class. I’ve since retired, and have subsequently taken on a post-retirement job in public service, so my earnings aren’t that high any more.
to make you direct your ire at doctors and lawyers instead of at the people leeching from society
I’d categorize lipo specialists, many cosmetic surgeons and most non-criminal lawyers among the leeches, though your point holds. I’d add that there’s a distinction between those doing real jobs and those pursuing the discretionary spending of the very rich. Sorry, yachtmakers, private-jet leasers, coke dealers and high-end escort agencies, you’ll have to learn to do something else.
To expand further on what you’re saying, the problem with the linked article’s mathematical/statistical analysis is that it uses a slightly more sophisticated version of misleadingly using “average”/mean in a context where median would be more appropriate.
Specifically, they talk about the spending of the top 10% in the aggregate, and point to the threshold of when a household tips into that top decile. Well, that aggregated number is itself heavily skewed towards the higher end of that spectrum, where the people in the 99th percentile are contributing a lot more weight than those in the 90th.
Here are the cutoffs for income thresholds to hit each percentile at or above 90:
90: $235k
91: $246k
92: $260k
93: $275k
94: $295k
95: $316k
96: $348k
97: $391k
98: $461k
99: $632kNote that this doesn’t even get into the 0.5% or 0.1%, which skew things even further. Even without that level of granularity, you can see that the median in this group is about $305k while the mean is closer to $350k.
When you include the billionaires, the difference skews even further.
That’s the math error at the center of this thesis. The facts reported might be true, but in a way that groups things together misleadingly.
yup. I will admit though that as you get higher a larger percentage of folks think they are rich and support the wrong side. Had so many docotors complain about taxes and talk conservative politics wise and im like dudes you are just over the top tax bracket. the problem is there should be more brackets that go higher not that the top should be decreased. Heck your bracket can’t be decreased till its not the top one.
Yep. They’re getting the same propaganda and falling for it too. The entire idea of the “middle class” is to get workers with something to think workers with nothing are the enemy, and get them to ignore the leeches with nearly everything.
still amazes me that the brackets end in the low six figure territory when we have billionaires. I remember a supposed quote from the head of the irs back in ww2 times about how his job was to figure out elvises taxes. Like because he was the highest paid guy. Man to have rich folks proud to pay taxes as a patriotic duty. Those were the days.
Reminded me of this doublespeak class warfare article from November: Rich people are dominating holiday travel - Most hotel guests this season will be people making six-figure incomes, analysts say.
Households earning at least six figures a year are expected to make up the largest share of holiday travelers this season — 45%, up from 38% in 2023, according to a recent survey by the consulting firm Deloitte. And they’re on track to make up a majority of paid lodging customers, expanding their ranks as hotel guests from 43% last season to 52% now.
“Travelers are looking to invest in upgrades and experiences that will make the holiday memorable,” said Kate Ferrara, vice chair for U.S. transportation, hospitality and services at Deloitte.
This was an example of pure psychological warfare to get people to spend more money at hotels. “Well, those ‘rich’ $100k earners are upgrading their stay, I will to!”
Corpo “news” is such shit.
In many areas of the US, this just means both parents work and have solidly middle-class (but by no means extravagant) incomes. My wife and I both work and we can cover the mortgage, all the expenses related to our kid, home ownership expenses, modest savings, etc. We are certainly not buying luxury cars or Gucci bags. Our big spends involve housing, healthcare costs, food costs.
I’m not sure who these people are who are affording discretionary purchases of hobby related stuff and luxury goods. That’s probably more like the 1-2%. Either that or people are amassing debt so they can look the part and “keep up with the Joneses”.
They’re literally trying to build an economy that starves regular people out of it. They don’t care anymore, they want it all.
A whole ass country full of fucking Veruca Salts.
Well, there’s 2 Verucas running the white House right now. I’m sure they care about fixing this issue.
What an insidious way to frame poverty and wealth disparity.
I cannot remember a time a headline filled me with such hatred and anger toward a person.
I hope Ms. Ensign gets exactly what she deserves.
Her WSJ biography REEKS of boot licking and discredited economic theory:
I can’t tell if this is from WSJ or Jacobin
Regular people hoping to become millionaires and billionaires
Ah yes the temporarily embarrased millionaires.
It’s fitting imo, because they’ve stolen the wealth and think that Luigi’s case is just a freak accident rather than the upcoming Bell Riots.
On a side note, I always figured the Bell Riots that were supposed to be back in September of our timeline were just a hair delayed and slightly miscalculated.
Maybe records became fuzzy due to the whole WWIII issue.
Good call
It doesn’t depend on them they’re just THE ONLY ONES WITH FUCKING MONEY. Title almost makes it seem like they’re cucking for rich people. Yeah no shit they’re the main consumers they’re the only ones who can afford to.
That’s only because no one else has spare money to spend.
Fuck rich people, and fuck you if you like them. I hate rich people so much.
See my other post in here for some context. Someone earning $250,000 a year is probably still working for that income. They’re rich, sure, but they aren’t the problem nor are they your enemy. WSJ publishes stuff like this to keep the working class infighting, like crabs trying to climb out of a bucket.
Someone that makes 250k a year is not rich.
Depends on how you define rich, I suppose. The reason I used that number is that’s what the article is defining as the top 10%.
That’s because they’ve seized all the money.
More significantly, a tiny chunk of them have seized the bulk of the money and other assets. The 90th percentile worker sees the insecurity that they’ll experience with a job loss. Somebody in the top 0.1% is likely a rentier who can live off the rest of us and not care.
“Depends” is the wrong way to frame it.
Essentially, this means we’re serving them.
I keep trying to explain, billionaires aren’t the only issue. Stop looking up to millionaires, too. They’re both ripping us off.
Don’t ever go to bat for them unless you want to be a useful idiot.
The highest earning 10% also have about 67% of the wealth, so they are actually underperforming compared to the rest of the population. It’s just that they have all the money.
Their underperformance is a higher savings/investing rate that leads to a greater wealth disparity long term. This is why redistribution (through taxes or other means) is so importantly to balance the scales.
But as other commenter’s have pointed out, my target would be billionaires not doctors and lawyers.
Thanks for the number, do you have a link where you got it from? I suspected something like this might be the case, but I couldn’t find a source easily online.
Here: https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/table/
I switched the table to Shares (%) and added up the latest values of the first 3 columns.
they are actually underperforming compared to the rest of the population
They always do, which is a big part of why the “FairTax[sic]” is such a scam.
And by “always,” I mean literally without exception, because the difference between the working class and owner class is defined by it.
Just passing a bunch of money around at the top.
What’s funny is, I guarantee all of these people will say without flinching, “I need more money.”
Wow, an actually important economic statistic, here on Lemmy? 👏
Thank goodness for the rich. I’ve nothing against the poor but they’re such drag on my economy
