The Entrenchment of Inequality

An engrossing article in the June 2018 issue of The Atlantic by Matthew Stewart, “The Birth of the New American Aristocracy,” exposes an America that still regards itself as egalitarian – providing equal opportunity for all – while making itself increasingly aristocratic. Being born of well-off parents is now the best bet for ending up in the same category as an adult. More so, if one is born of white parents who are well-off, staying in the economically advantaged category is a virtual lock.

The article’s length is stout – I’ve linked it here for purists. For the rest of you, read on for a pertinent summary!

Early on Stewart writes: “Imagine yourself on the socioeconomic ladder with one end of a rubber band around your ankle and the other around your parents’ rung . . . If your parents are high on the ladder, the band will pull you up should you fall; if they are low, it will drag you down when you start to rise. Economists represent this concept with a number they call ‘intergenerational earnings elasticity,’ or IGE, which measures how much of a child’s deviation from average income can be accounted for by the parents’ income.”

Zero IGE means there’s no significant relationship between parents’ income and the eventual income of their offspring, and that the rubber band is flimsy. An IGE of 1.0, on the other hand, means no variation whatsoever and a rubber band of unbreakable strength. Fifty years ago, the IGE in America was less than 0.3 – today it has increased to 0.5, which is higher than that of almost every other developed country. What it means: the American rubber band of today’s IGE is more taut than it’s ever been and the great American virtue of high social or economic mobility is a fairytale.

A robust economic mobility did exist two generations ago in post-WW II America – again, mostly for white people – but those who insist it yet exists today for all Americans risk a credibility problem. Either they are stuck in the past, or they champion a belief, as if religious dogma, that claims that those who haven’t made it in America are mistake-laden, lazy, on-the-dole, reprobate slackers. Of course, some perfectly fit the description. But most economically poor today in America don’t. And many of these who haven’t “made it” are working poor, many of these with children. And a large portion is elderly on fixed incomes.

A corollary to the above stated dogma in today’s faux-meritocratic America: Since the poor only have themselves to blame for their predicament, I – and certainly not my tax dollars – don’t have to help them.

Escaping poverty in America today is a complex process requiring discipline and will-power, but also access to opportunities that middle- and upper-class folks take for granted: social connections and infrastructure that provide ready access to childcare, healthcare, education, and money. Only 4 percent born into poverty make it to the middle class in today’s America. The lack of access to opportunities strengthens the downward pull of the rubber band.

Stewart pooh-poohs the much publicized divide between 1 and 99 percenters that emerged from the Great Recession of ten years ago. Instead he fingers the top 10 percent of wealth possessors, regardless of yearly income – $1.2 million net wealth (cash, stocks including retirement, house value, and other holdings minus liabilities) gets you into the top decile – as those who are most culpable, led by the top .1 percenters, in today’s entrenchment of inequality.

He includes himself in this culpable faction, and divides American society into three separate economic groups: .1 percenters, the next 9.9 percent (I combine these two groups into the top decile), and the bottom 90 percent.


The top .1 percenter class now tightly holds 22 percent of all American wealth, the highest level since before the Great Depression. It has pilfered the wealth holdings of the bottom 90 percent, now also holding 22 percent, the lowest level since during the Great Depression. Stewart’s class, the top decile excluding the top .1 percent, holds the remaining 56 percent.

Stewart comments: “The meritocratic class has mastered the old trick of consolidating wealth and passing privilege along at the expense of other people’s children. We are not innocent bystanders to the growing concentration of wealth in our time. We are the principal accomplices in a process that is slowly strangling the economy, destabilizing American politics, and eroding democracy. Our delusions of merit now prevent us from recognizing the nature of the problem that our emergence as a class represents. We tend to think that the victims of our success are just the people excluded from the club. But history shows quite clearly that, in the kind of game we’re playing, everybody loses badly in the end.”

The course of what has become rampant inequality in the United States, building steadily since the early 1980s, is not natural. As Stewart points out, tax cuts for the rich, the influx of huge money into politics, and the transfer of power from labor to capital have helped create the current trends of social and economic inequalities. These commitments, Stewart also points out, can be and should be reversed.

“The defining challenge of our time is to renew the promise of American democracy by reversing the calcifying effects of accelerating inequality. As long as inequality rules, reason will be absent from our politics; without reason, none of our other issues can be solved.”



Tim/T. Carlos Anderson – I’m a Protestant minister and Director of Community Development for Austin City Lutherans (ACL), an organization of fourteen ELCA (Evangelical Lutheran Church in America) congregations in Austin. I’m also the author of Just a Little Bit More: The Culture of Excess and the Fate of the Common Good (Blue Ocotillo/ACTA, 2014) and There is a Balm in Huntsville: A True Story of Tragedy and Restoration from the Heart of the Texas Prison System (forthcoming on Walnut Street Books, April 2019).