Even Affluent Americans Think 'The 1%' Are Pulling Away
In recent years, attitudes toward the richest 1% of Americans have increasingly become part of the national conversation. Some vilify “The 1%,” others want to join their ranks, and many hold both attitudes at once – viewing the wealthy with a sometimes paradoxical mix of anger, envy and aspiration.
What does it take to be in “The 1%”?
Probably less than you think (although it depends a great deal on where you live). Data from the government’s Survey of Consumer Finances, along with tax return data from the IRS, reveal that in terms of annual household income, $380K puts you in the top 1% nationally; not surprisingly, the threshold is much higher in states such as Connecticut ($678K), New York ($506K) and California ($438K). The same is true for net worth, where $7.6M puts you in the top 1% nationally, but you’d need much more in the moneyed bastions of the Northeastern corridor and Northern California. In general, people are reasonably accurate in guessing how much net worth you’d need, but significantly overestimate how much income would be needed.
Just as interesting as “Who is in the 1%?” is the question:
“Who thinks they will be in the 1% someday?”
This question is central to the American psyche. The potential for social mobility has long been at the heart of the American Dream, and the meritocracy Americans have promised their children for generations (“you can grow up to be anything you want, if you work hard enough”). The data show that even Affluent Americans – those comfortable but not yet wealthy, who would seem to be closing in on 1% membership – increasingly view the 1% as pulling away even from them. One percenter status seems increasingly unattainable, even to those who are objectively close to it.
A recent Ipsos Affluent Barometer survey explored self-perceptions of wealth among “Affluents” ($100,000+ household income – the top 25-30% of Americans) and “Ultra Affluents” ($250K+ HHI – the top 3-4% of Americans). After taking out the few who felt they were already “in the top 1%,” only 8% of Affluents said they expect to be in the top 1% someday (down from 15% in 2012); among Ultra Affluents, 28% expect to make it (down from 37% in 2012). In their minds, the 1% is slipping further away into the stratosphere.
At the same time, data from the Ipsos Affluent Survey show Affluents and Ultra Affluents have become increasingly focused on experiences and intangibles – manifesting a desire to enjoy a life well-lived short of wealth, to revel in what they can control, to appreciate a great meal, and find joy in the company of friends and family. The share of luxury dollars (and share of luxury aspirations) are shifting – from objects to experiences, from things to travel, from something that screams status to something understated, from an unbridled hunger for wealth to the subtle appreciation of the moment.
