Commentary

Do Affluents Care About The Wealth Gap?

A hot potato in the Presidential election cycle is the issue of Income Inequality and the Wealth Gap. Though it’s been simmering for some time, it comes into focus when confronted with the data points. The richest 1% of Americans make 20% of the income. The wealthiest 160,000 families have as much as the poorest 145 million families combined. And, according to the U.S. Census Bureau, since the recession began in 2007, spending power for middle income families has diminished while Affluent spending power has increased. It’s likely these numbers – and the emotion behind them – will be repeated frequently as candidates fan out across the United States for primary and national elections. 

Do the 5 million households with an annual income of over $250k care about the Wealth Gap? Though only 5% of the population, their attitudes and behaviors play a disproportionate role in the consumer landscape. And with the Wealth Gap becoming a feature of society, as opposed to a short-term abnormality, its ramifications impact up and down the socioeconomic landscape. Does it impact Affluents’ values and their relationship with their money?

More and more data suggests it does. According to CEB Iconoculture, more earners at the $250-500k level will self-identify with “upper middle class” rather than “affluent” or “privileged” or even “wealthy.” Almost half of them say that they’re actually part of the (upper) middle class. Striking for people who are at the very top of the food chain. And in a head-scratching piece of data from the same study, 47% of $180-250k earners self-identify as “comfortable,” while only 39% of those over $250k do. 

As society becomes more stratified, the Affluents are a moving target. Their needs are changing, and the way they see themselves and spend their money is in transition. Here are some guideposts in communicating with them:

Nobody wants to be considered part of the 1%. In the same way that many people will cite a salad as their favorite McDonald’s menu item, while actually indulging in Big Macs, most Affluents don’t want to be associated with the cultural boogeyman of the 1 percenters. And because social shaming is on the rise, being seen as part of the upper crush can feel like a liability, with real social hazards. 

The fire to become Affluent continues to burn. Affluents had to fight to get to where they are. They aren’t just dropping the toughness it took to get there. As a result, they often feel less financially secure and less prone to take the pedal off the metal. They still identify with a lower income group that’s on their way up, rather than one that’s made it. 

They still want more. Affluent are constantly trying hard to increase their already high incomes. According to CEB Iconoculture, they over-index in values of ambition, purpose, tenacity, and growth. Entering the Affluent club tends to incite more desire to move up within its ranks, rather than stand still.

They seek comfort. Comfort takes many forms and it’s intensely personal. It can mean the freedom from worry. It can mean being in control. It can mean seeking value over time. But one thing it means less and less, in the light of the disparity between rich and poor, is the desire to use wealth as a cue for identification. 

While the Wealth Gap may not be an everyday reality for Affluents, its influence is a cultural force to be reckoned with. And as the election season heats up, paying close attention to the debate may just hold the key to effective communication.

3 comments about "Do Affluents Care About The Wealth Gap?".
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  1. Jeff Sawyer from GH, November 18, 2015 at 1:53 p.m.

    You get your MBA, which teaches you how to grow your income at the expense of others. 

    Keep their wages down, and yours will go up. Wealth transfer.

    So you do that and you get comfortable around, say, $200k. Until...

    You have kids. Now you need more. For their college, for their weddings, for their down payment on a house.

    You don't want your kids living like the employees whose incomes you diminished. So you cut more – enough to justify your existence every year. Raise the health deductible. Lower the COL increase. Cut the EAP. Use more temps to avoid paying benefits. It's not rocket science; it  pays better. Maintain a firm, grim countenance along the way, and maybe no one will dare ask what product or service you create for customers. 

    Keep it up for 30 or 40 years, and you can do something your employees never will: retire. 

  2. Amy Moses from Ballooning Nest Eggs, November 18, 2015 at 3:06 p.m.

    Intersting article.  Two additional thoughts:

    *  You bring up income and not wealth.  Many of hte super wealthy inherit their money or are retired / semi-retired, and they're not covered in your aqssessment. 

    *  When assessing attitudes towards $, one also needs to factor in area of the country one's living in.  $250K might be a lot of money in Omaha, but raising a family (say 2 kids) in NYC on that amount while saving for the kids' college and rretirement, and trying to buy an apartmenbt (without the parents) is arguably a very middle class income.

  3. Paula Lynn from Who Else Unlimited, November 18, 2015 at 7:01 p.m.

    Amy is correct. Next step...How many people with that MBA, Doctorial cannot manage a checkbook ? On line, schom line...they still don't know what a debit or credit is or what an investment is. A car is not an investment, for example. So many people found out neither is a house. On the other side of the coin, people with the most wealth invest (treatises on that) and do not avoid dental appointments for the expense. Anyone have any idea what 2 cleanings per year for four people costs ? The revolution will be televised on multiple screens. The affluents do not care (allowing people in power to want to kill the minimum wage and other safety nets), and one day, sooner than they expect, they will pay more for the not caring than they would if they would be part of a rebalance. No one wants to take responsibility. 

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