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The Problem of the Not-Quite-One Percent

The divide between who can afford to weather the downturn and who can’t is sharpening. And it’s shaping the recovery response.

Mark Sagliocco/Getty Images

“We aren’t wealthy people with a very big Hamptons home, but it’s beautiful to us,” the owner of a rather large house in Southampton recently told The New York Times in an article on Manhattan residents decamping to second homes. That quote, roundly savaged on social media, has since vanished from the online version of the article but was an instructive lens through which to view the not-quite-one percent as they navigate the pandemic.

The upper-middle class, or the top 20 percent of earners in the United States, still have nothing on the likes of Jeff Bezos—whose net worth increased by $13 billion in one day last week—or Elon Musk, who recently claimed that a new stimulus bill was “not in the best interests of the people.” Yet at the same time, the affluent often still seem to operate in a parallel universe to the rest of the country. While the coronavirus has upended the lives of most people, including those well-off professionals, the division between those who can afford to weather the pandemic in relative comfort (if also a certain amount of inconvenience) and those who can’t continues to sharpen. And that gap will almost certainly shape the country’s recovery from the pandemic.

We’ve already seen the makings of a new pandemic-era variation on residential segregation: White-collar professionals working remotely who own second homes—even modest ones!—have long since fled coronavirus hot spots for those safer environs. And as The Washington Post noted on Monday, homeowners and those with the means to buy are now benefiting from low interest rates and the cheapest mortgages in 30 years. “People who own homes are in the best financial shape in the country. They are not the people we should worry about,” housing analyst Logan Mohtashami told the Post. Rents, on the other hand, largely haven’t decreased across the nation, although unemployment remains high and eviction protections across the country near expiration. “Renters are the ones who need help and forbearance,” said Mohtashami.

The well-off also appear to be figuring out childcare, despite some early stumbles. According to The New York Times, au pairs are now in short supply as the families that can afford them rush to snap them up. While the minimum cost of sponsoring an au pair is around $20,000, the shortage has spurred offers from affluent households of large sign-on bonuses and doubled pay, new cars, and other perks. Then there are the budding “microschools” and schooling pods, launched by understandably anxious parents as state and municipal governments waver on whether to reopen schools in the fall (and the Trump administration attempts to bully them into doing so). Under the pod model, a small group of parents pay tutors or private teachers to provide in-person education as a replacement for or a supplement to online learning. If that’s one solution to the impending schooling crisis, it’s also one that’s only available to those who can afford it and has the potential to exacerbate the already significant educational disparities between affluent and poor students. “The truth of the matter is, we’re staring down the barrel at something that is going to divide and widen the gaps between kids,” educational sociologist and NYU professor L’Heureux Lewis-McCoy told The New York Times.

In other words, the pandemic coping tactics of the affluent contain an element of what the Brookings Institution’s Richard Reeves calls “opportunity hoarding.” As Reeves argues, even though the lion’s share of economic gains have gone to the ultrarich, the top 20 percent of income earners have also done pretty well. Most crucially, this group actively works to pass on and entrench its advantages for its children by buying homes in upscale neighborhoods, sending its kids to good schools, and supporting policies like exclusionary zoning laws and various tax breaks for its particular bracket. “Opportunity hoarding does not result from the workings of a large machine but from the cumulative effect of individual choices and preferences,” Reeves wrote.

On the one hand, it’s probably futile to insist that individual well-off families refuse to use the resources available to them—particularly at a time when the country feels as though it’s on the brink of free fall into deeper disaster. And to a certain extent, the conditions that compel the upper middle class to double down on their comforts are the result of the “workings of a large machine,” namely, an exploitative economy that necessitates winners and losers and a government that’s abandoned almost all of its obligations to help people. The resources that affluent parents enjoy, in the words of Reeves, act as a kind of “glass floor” for their children. Yet the project of extending that floor to everyone through the creation and preservation of robust public services remains a nonstarter among the policymakers largely elected by the upper-middle class, who serve that stratum and those above them.

This week, for instance, a Democratic committee voted to reject an amendment to include Medicare for All on the party’s national platform, even as the absurdity and cruelty of an expensive, employer-based private health care system has never been more obvious. House Majority Leader Steny Hoyer also signaled the party’s willingness to shave down the $600 unemployment supplement. “Look, it’s not $600 or bust,” he said. In the Senate, Republicans introduced a relief bill that proposes cutting the unemployment benefit to $200 and doesn’t extend the federal eviction moratorium. Even beyond affluent families’ individual decisions to relocate to rural second homes or enroll their kids in schooling pods for the fall, this is the kind of national-level hoarding that will deepen social stratification in the aftermath of the pandemic. If the scrambling of the upper-middle class to preserve itself in this moment and Congress’s commitment to a failed policy status quo feel dismal, that’s just another indictment of all the things that have been broken for a long time.