Is Parasitic Affluence Replacing Traditional Paths to Wealth for America's Shrinking Middle Class?
31 March 2025 · Uncategorized ·
Source: · https://finance.technews.tw/2025/03/30/usa-middle-class-disappear/
The U.S. middle class is disappearing, a trend exacerbated by soaring real estate and stock markets where economic consumption has become increasingly dependent on high-income individuals who now drive America's economy significantly.
According to recent data from the Federal Reserve, households within the top 10% income bracket account for nearly half of total national consumer spending. While ordinary Americans are tightening their belts due to rising inflation, wealthy elites continue to spend lavishly—benefiting greatly from increases in stock prices and real estate values—with luxury vacations and designer handbags.
Simultaneously, the U.S. middle class is shrinking. In her book 'Nanny Diaries: A Bottom-Up Look at America's Top 1%', an author describes a society where wealth increasingly concentrates among the rich. According to Moody’s Analytics as of Q3 2024, households within the top 10% income bracket (with annual incomes over $250k) account for nearly half—49.7%, a record high—of total consumer spending in America compared with about one-third three decades ago.
The proportion of Americans considered middle class has dropped from 61% in 1971 to just over 50% by 2023, while the wealth held by households within the top 1%, exceeded that accumulated by all members of America's shrinking middle class combined as early as 2020. Mark Zandi, chief economist at Moody’s Analytics, told The Wall Street Journal that spending from this upper decile accounts for nearly a third of U.S. GDP.
Data shows expenditures among wealthier groups have grown far beyond inflation over four years: while bottom 80% increased only slightly more than overall inflation (about 21%), top decile spenders saw their outlays increase by nearly 60%. Since the pandemic began, rising inflation and soaring real estate and stock markets made wealth inequality even clearer. In 2024 alone, S&P 500 stocks rose over 23% after a similar rise of about 24% in 2023.
The wealthiest Americans benefit most from these gains; America's top decile holds roughly eight out of every ten shares on Wall Street. The 'wealth effect,' where rising asset values encourage more spending even without income increases, has further widened consumption gaps between rich and poor over four years despite inflation offsetting some benefits: net home equity for the wealthiest 10% rose by over seventy percent to $17.6 trillion while stock market value increased nearly eighty-six percent.
High-income individuals benefit disproportionately from asset price rises due to their greater ownership of assets, further boosting consumption power among wealthy elites. Michael Pearce at Oxford Economics notes that this underscores how robustly America’s rich are driving overall consumer spending with sustained economic strength.
The lavish lifestyles of American millionaires and billionaires have created a unique economy around them. For instance, in 'Nanny Diaries,' Stephanie Kiser describes her seven-year tenure as nanny to three ultra-wealthy Manhattan families earning between NT$7.2M (US $110k) annually with additional benefits.
Other jobs catering to the wealthy include chauffeurs and personal assistants where average salaries can reach up to US$75,684 per year according to Monster’s analysis of U.S. Bureau of Labor Statistics data. These high-paying roles often come with long hours and unreasonable demands set by employers reflecting their need for premium care services.
Beyond household management jobs targeting the wealthy market, luxury travel and cruise industries are booming as consumption shifts towards top-tier consumers potentially amplifying influence within America's elite circles in future years.
According to recent data from the Federal Reserve, households within the top 10% income bracket account for nearly half of total national consumer spending. While ordinary Americans are tightening their belts due to rising inflation, wealthy elites continue to spend lavishly—benefiting greatly from increases in stock prices and real estate values—with luxury vacations and designer handbags.
Simultaneously, the U.S. middle class is shrinking. In her book 'Nanny Diaries: A Bottom-Up Look at America's Top 1%', an author describes a society where wealth increasingly concentrates among the rich. According to Moody’s Analytics as of Q3 2024, households within the top 10% income bracket (with annual incomes over $250k) account for nearly half—49.7%, a record high—of total consumer spending in America compared with about one-third three decades ago.
The proportion of Americans considered middle class has dropped from 61% in 1971 to just over 50% by 2023, while the wealth held by households within the top 1%, exceeded that accumulated by all members of America's shrinking middle class combined as early as 2020. Mark Zandi, chief economist at Moody’s Analytics, told The Wall Street Journal that spending from this upper decile accounts for nearly a third of U.S. GDP.
Data shows expenditures among wealthier groups have grown far beyond inflation over four years: while bottom 80% increased only slightly more than overall inflation (about 21%), top decile spenders saw their outlays increase by nearly 60%. Since the pandemic began, rising inflation and soaring real estate and stock markets made wealth inequality even clearer. In 2024 alone, S&P 500 stocks rose over 23% after a similar rise of about 24% in 2023.
The wealthiest Americans benefit most from these gains; America's top decile holds roughly eight out of every ten shares on Wall Street. The 'wealth effect,' where rising asset values encourage more spending even without income increases, has further widened consumption gaps between rich and poor over four years despite inflation offsetting some benefits: net home equity for the wealthiest 10% rose by over seventy percent to $17.6 trillion while stock market value increased nearly eighty-six percent.
High-income individuals benefit disproportionately from asset price rises due to their greater ownership of assets, further boosting consumption power among wealthy elites. Michael Pearce at Oxford Economics notes that this underscores how robustly America’s rich are driving overall consumer spending with sustained economic strength.
The lavish lifestyles of American millionaires and billionaires have created a unique economy around them. For instance, in 'Nanny Diaries,' Stephanie Kiser describes her seven-year tenure as nanny to three ultra-wealthy Manhattan families earning between NT$7.2M (US $110k) annually with additional benefits.
Other jobs catering to the wealthy include chauffeurs and personal assistants where average salaries can reach up to US$75,684 per year according to Monster’s analysis of U.S. Bureau of Labor Statistics data. These high-paying roles often come with long hours and unreasonable demands set by employers reflecting their need for premium care services.
Beyond household management jobs targeting the wealthy market, luxury travel and cruise industries are booming as consumption shifts towards top-tier consumers potentially amplifying influence within America's elite circles in future years.