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April 04, 1993|Guy Molyneux | Guy Molyneux is president of the Next America Foundation, an educational organization founded by Michael Harrington

WASHINGTON — IN SELLING HIS economic plan, Bill Clinton made fairness central to his message. Unveiling the program, he stressed that 70% of his proposed new taxes fell on those making more than $100,000, and that his income tax hikes start on incomes of more than $140,000. But from some circles a hue and cry went up: This was not fairness, but rank betrayal. Hadn't candidate Clinton promised to tax only the rich? How could he reconcile that with taxing people making just $100,000? As one network pundit observed, "$140,000 doesn't buy what it used to."

Despite the occasional hysterical or sarcastic response, this could have marked the start of a useful national debate over what it means to be middle class, and what it means to be more than that. However, the discussion quickly fizzled. Hardly surprising, since social class remains our last taboo subject.

It has always been true that money and sex make America go 'round, but it used to be that polite people didn't discuss either in public. Today we've overcome our inhibitions on the latter, as airwaves filled with panels on multiple orgasms, cross-dressing and incest attest. But talking about how much money people make--and should make--well, these are delicate matters. Consequently, what is any society's most fundamental question--who gets what--remains little explored.

Consciously or not, we have a kind of mental "map" of social class. For most of us, it's the standard bell curve: a few poor people, a few rich people and, in between, a large and comfortable middle class. But if we ever overcame our fiscal puritanism and explored this forbidden topic, we'd see the reality is far different. We'd come face-to-face with the extraordinary pattern of inequality that is America's dirtiest dirty little secret.

The numbers are astonishing: The top 20% of families have as much income as the remaining 80%. Within that fortunate fifth, the top 5% makes as much as the lower 15%. In that top 5%, the pie is again evenly divided between the top one-fifth (that is, 1% of Americans) and the remaining 4%. It's like opening one of those Russian dolls--no matter how small the piece, inside you find still more inequality.

Statistics only give us part of the picture. Consider the average family--we'll call them the Smiths. Jean and Bob Smith both work (Jean part time), and between them they bring in $36,000--before taxes. They have a couple of cars, but at least one is 10 years old. In the past year they've taken only one trip away from home. They own a house, but still owe most of the mortgage. They own no stocks or bonds, and have no money market account. In fact, beyond the house they have no net financial assets--zero. The entire family spends $28 a week on all meals outside the house (yes, per week). They hope their kids get into the state university when the time comes; private college is out of the question.

Now consider Bill and Judy Jones. They have two professional incomes, bringing in about $150,000 a year. They own two cars, one European and one Japanese. They will send their children to private primary and secondary schools, or obtain comparable educations by buying an expensive home in a community with top-notch schools. They say they are just getting by, and they mean it. But they couldn't tell you where two people would want to have dinner for $28. And if you told them they had to get by on $36,000 next year, they wouldn't know where to start.

The Joneses would say they're not truly rich, and they're right. They couldn't afford never to work again, nor do they have the social and political power real wealth can bring. But they're not the real middle class, either, which lives like the Smiths. Families with incomes of $100,000 and up are in fact quite affluent. Call them the Lower Upper Class, or "Luckies."

People like the Joneses typically have no idea where they rank on the economic ladder. Try asking Luckies (or young Luckies-to-be) how many families earn more than $100,000. In my experience, they are almost never close to the real answer (about 1 in 20). They believe such incomes are common.

How do Luckies remain so ignorant of their own relative affluence? It's maintained by the great genius of American social organization: de facto segregation by income. Our housing, workplaces and schooling keep us all surrounded by a narrow strata of people much like ourselves. It's so effective we don't even notice it. You basically can't buy an expensive house adjacent to a cheap one, or vice versa--we don't organize neighborhoods that way. Schools are tied to those same segregated communities. Within firms, we usually socialize with our economic peers.

Most of us thus spend our entire lives largely with people of our own social class. Even those who manage significant upward mobility over their lives always find themselves--at any given time--associating with people just like themselves. So we all feel, no matter how successful, "average." As far as we can tell, we are.

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