America's Elite Problem - We Have Too Many of 'Me'

and why we have to face up to this

Photo by Jared Rice on Unsplash

Defining the “Elite'“

Since the Great Recession of 2008–2009, national media outlets and think tanks have reported on the growing income inequality in the United States. Yet, the problem is more complex and troubling than just income inequality. Regulatory or tax solutions alone will not be enough to address inequality on the scale it is now occurring. Inequality is always about far more than money—especially the kind of inequality we’re seeing now in the United States.

Being “elite” is about how you spend your above-average wealth. Being elite is about a lifestyle. It is a differentiated, non-conformist social imagination reinforced daily by even the most mundane choices.

Being elite is about rejecting mainstream choices for mundane things. This consumer rejection usually, but not always, means spending a lot more money on categories the middle-class and working classes would never do, even if you doubled their income overnight.

How Whole Foods Moms Help Us Redefine “Elite” in American Society

When I began my career in market research- in 2003, one of my first clients was Whole Foods Market. At the time, food industry veterans mocked the chain and its ‘revolution’ in quality standards for the American pantry. Some even openly predicted that ‘organic’ was a pretentious fad that would blow over when the overheated economy reset. Most of these naysayers were white men in their 70s (now either dead or in their 90s). I bring this up because they represented the last generation born before America’s educated elite underwent a dramatic sociological and demographic transformation.

The economy did bomb in 2009, but the organic food revolution kept growing through it and has now only become more extensive. As a field researcher for the food industry at the time, I noticed something in the home pantries of Whole Foods Market’s heavy shoppers (they call them the ‘Core’ shopper internally). These folks were affluent and educated and almost always Moms with young kids. These young families reminded me of my upbringing in Bedford, NH., in the 1980s. Except for one thing: the elite Moms of the 2000s were more likely now to be post-grad educated, not just college degree holders. And they had lots of questions about people in authority. Not all of them were friendly questions, either.

It made intuitive sense that affluent Moms would now gravitate to premium food choices simply to maintain social status in their everyday social networks. Why? Because these urban-focused parents were incredibly insecure about almost everything related to their children’s health and well-being. Children had become a project in which they competed with each other to do better than their parents’ generation. Smarter choices. More nuanced choices. More empathetic choices. Choices honoring the neurological differences of each child (rather than bullying the child to fit in). And all of these facets of elite parenting continue to this day. Educated women are incredibly intense competitors in family-focused lifestyle consumption (without perceiving the immense peer pressure they put on each other). 

Combining education and income as filters gets us closer to the social worlds of Whole Foods Moms. But it doesn’t fully explain what I saw in the field regarding the trade-up to organic produce and milk. I kept hearing a health-related critique of the American food system. This critique took off with the assault on hormones used in the American milk supply (rBST) and the parental fears it ignited among Whole Foods Moms. The initial twin fears were increasing breast cancer rates and accelerating the onset of puberty. What made it most terrifying was that there is no mandatory labeling of dairy products whose source farms use these hormones to boost milk production. This parental fear fed off increasing distrust in America’s central institutions, distrust by educated elites. All that education of Baby Boomers and Generation X generated a much larger group of critical thinkers unwilling to take institutional pronouncements at face value. Boomers, especially, became more cynical through our deadly misadventure in Vietnam, the assassinations of MLK and RFK, and the Nixon abuse of Presidential power.

After the birth of our first child in 2007, I found myself joining the ranks of Whole Foods Market core shoppers as a participant observer. And I became fascinated with how much a Whole Foods Market Mom spends each month on groceries. So, I started collecting our receipts as a non-representative but directional case study. And I was shocked to discover we were paying five times the annual grocery bill of a typical family of four at the time (per the available BLS data).

That’s some class privilege, for sure. But I assumed these households (including mine) represented less than 1% of America - a tiny post-grad educated elite who wanted to and could afford to live like this. But was I such a rarified snowflake?

Social Mobility and Elite Lifestyles

In 2012, my consulting team and I looked into a hypothesis triggered by Pew Research data on America’s shrinking middle class (read here for their most recent analysis). Our publicly-traded food and beverage client base was concerned about stalled growth and the shrinking household reach of their brands. We suspected that a steady increase in organic and premium food consumption, and declining purchases of formerly iconic food brands, reflected upward mobility into the ranks of the upper-middle-class elite.

So, the team I led back then used a) educational attainment and b) income as the components of our SES model. It yields about nine or ten SES segments, depending on how you define things. Why did we pick these two variables? There are a couple of reasons. 1) these standard demographic variables allow anyone else to connect the findings to many other databases since these two demographic variables exist in most surveys. But, most importantly, educational attainment is critical because we know it leads to different consumer choices (as I previewed above), especially as you approach the extremes of privileged vs. underprivileged.

Since 70% of our economy derives from these consumer choices, it’s critical NOT to assume that adults with similar incomes behave similarly in everyday life. I know from prior corporate research that brand preferences tend to exhibit substantial divergence at the extremes of educational attainment, regardless of income. Education predicts many consumer choices better than income levels outside luxury categories (sports cars, mansions, Rolex watches, yachts, etc.). I learned this by touring the food pantries of America in person. So, I believe it’s critical to intersect education with income to understand better how we make big decisions, like who we live near, and small decisions, like how expensive our produce is. Educational attainment places people in social networks containing unconscious rules behind thousands of mundane consumer decisions.

Using these two variables, I originally defined the upper-middle-class in 2012 as 4-year college graduates with $100K or more in 2012 household income. Notice that this definition deliberately avoids a narrow focus on the 1% over which the modern media loves to obsess for rhetorical impact.

And when my colleagues and I looked at this group in Census data, adjusting for inflation, we found it had doubled in size from 1991 to 2012.

This doubling of America’s elite was remarkable and helped explain the dramatic, double-digit growth of natural/organic consumer brand purchasing (our client focus at the time). Twice as many Americans now could double or triple their grocery expenses quite comfortably without sacrificing elsewhere in their consumer spending.

But what has happened since then to the upper-middle-class, roughly the same group David Brooks popularized in his fascinating book- Bobos in Paradise? And more importantly, why do we care?

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As part of my initial research project for my new research and publishing venture, I recently analyzed the upper-middle class similarly. This time, I raised the ‘membership’ standard and studied the group as individuals, not households, with $138K or more in 2023 total personal income (i.e., $280,000 for dual-income family households). Raising the income threshold higher than we did in 2012 allows us to see a tighter group of adult individuals with more than enough income to live in nice apartments or homes and buy lots of discretionary goods and services for everyday use.

These folks are the ones who opt for yoga vacations picture above. You must have internalized an elite self-improvement ideology to be interested in trading up to super-quiet tropical luxury hotels that commit to having world-class instructors. These vacations don’t require 1% income, only upper-middle-class ones. More on the tiers in a bit.

For this updated view on the growth of the upper-middle-class, I had access to a 60-year chronicle of Census data from 1962 until 2020 (w/help from IPUMS at the University of Minnesota). I NEARLY FELL OFF MY CHAIR when I ran the raw line graph last November. I initially hypothesized that the upper-middle class had grown primarily in the 1990s and early 2000s. In fact, in 2012, I just assumed the growth in the size of America’s elite would decelerate. After all, the economy already appeared overheated after the Great Recession.

Have a look at how America became oversupplied with elites. Too many PhDs. Too many lawyers. Too many sales and marketing staff. Too many creatives and artists. Too many entrepreneurs pursuing identity goals more than business success.

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However, the long-term growth of the upper-middle class, adjusting for inflation, actually accelerated during the 2010s. I was too busy changing diapers to notice. America’s elite inhaled millions more Generation X and Millennials, mainly born into middle-class families. It is now 7% of the U.S. population or twenty-three million adults 25 and over. That’s the same size as the state of Florida population or the seating capacity of 353 large-sized NFL stadiums!

Instead of the mythic rags-to-riches journey the media still loves to highlight, especially with immigrants, this journey rarely happens. The most recent longitudinal studies tracking class mobility in real-time (with a fixed cohort) indicate that only 6% of Americans born into the bottom income quintile make it to the top quintile (Source: Getting Ahead Or Losing Ground: Economic Mobility in America, 2006, p. 19 Figure 5, Brookings Institution).

The inter-class social mobility in the last half-century appears to have been from the middle class to the upper-middle class. As you’re reading this, like me, you can probably list off a bunch of relatives who experienced this dramatic journey, maybe even yourself — climbing from the middle to the upper-middle-class sounds like a less cinematic American dream but a good outcome., correct?

Why Do We Care About Elite Over-Production?

Why should this exponential growth in the upper-middle-class concern us as a nation?

There are three big reasons, but they are probably not the only ones. Firstly, the elite has become a functionally endogenous social world in everyday life. Members don’t have to interact with ordinary Americans. They are large enough to develop internal schisms operating at a large scale which focus upper-middle-class on competing consumption sub-identities (e.g., foodies, vegans, nutritional optimizers, fitness geeks). Secondly, most venture capital funding any innovation focuses on servicing the elite at the expense of social cohesion and public infrastructure investments. 3) This elite shares a core value of hyper-individualism, making them more distracted from the social forces influencing them than any other elite group in history. They perceive most things in life from the perspective of: how does this affect me as an individual?

1. The Inward-Focused Elite — the class stratification of American neighborhoods and zip codes allows most elites to spend their free time mainly in the company of similarly privileged adults. They also work in companies primarily composed of similar elites (i.e., not just the executives). They can hang out in coffee-house third-places full of the similarly privileged. Today, the American elite is so vast that it has developed multiple internal schisms, not all overtly political. Yet, what the Whole Foods elites of the 2000s made me realize at the time was that a large macro-schism was emerging within the American elite. It was dividing the media. It was dividing elite zip codes, even neighborhoods. The schism is between a) ‘left-leaning’ elites favoring individualist techno-modernism instead of social tradition and b) ‘right-leaning’ elites trying to return to an imagined patriarchal past of strict gender roles, limited class mobility for non-whites, even white supremacy. The first group anchors itself in an optimistic future free from the constraints of tradition. The second group journeys to an imagined past, a nervous reaction to multi-factorial social change they find offensive. And in the middle are millions left undecided and confused by these divergent perspectives on which way we should look: to a hyper-individualist future or a neo-communitarian past. The ‘elite’ is now so enormous that it is more than capable and highly likely to fight internal battles to control our vital institutions and deploy less ambitious elites and the broader population as mere pawns in intra-elite power struggles. It was far easier for this elite group to get along when it was a minuscule proportion of the population, and 99% of Americans didn’t fit into it. I call it the HGTV class, one outlet that appears to cross most of the schisms within the upper-middle class.

2. Innovation for Elites by Elites– Elites represent a large audience that consumes more per capita than other SES groups. Unsurprisingly, most venture capital-funded innovation aims at products and services with these folks as the initial core audience. I don’t see anyone investing in fintech solutions for the unbanked or appliances for use in housing projects where the goal is minimal electricity usage for folks who struggle to pay utility bills. In consumer products, the innovation audience is usually the same elite subworld as the founder, and if it takes off, it spreads to the middle classes through price reductions. Looking at the Top 10 2021 unicorns, we see that most are services most valuable to well-capitalized elites — Instacart, Stripe for small business owners, Tesla, Canva, and Databricks. In consumer-packaged goods, almost all the funding goes to premium-priced innovations that re-frame existing offerings as inferior in quality (to some audiences). Elite concerns with the quality of life, finance/wealth management, and techno-futurism best explain the underlying, non-financial motives for the narrow concentration of funding into IT, finance, healthcare, and consumer products (Source: CB Insights.) These cultural domains attract the imagination of elites who have the luxury to contemplate and imagine alternative or ‘better’ futures for themselves (and for others who do not do the initial imagining). This is another reason why elites talk incessantly in business about ‘visioning’ and ‘vision-setting.’ This is a class of people freed of any survival-related issues, able to live, like the aristocrats of yore, inside their imaginations and make those imaginings real (e.g., through innovation). There is no evil intent per se, just an unusually privileged set of base conditions for this degree of future-leaning imagination to become a lifestyle for 23 million adults (see above chart). And to inspire similar thinking among equally well-educated people.

3. Hyper-individualism Focused on a Personalized Future — David Brooks’ popular ethnography of the upper-middle-class in the late 1990s focused on the seemingly unlimited capacity of Bobos to parse nuances of distinction that they didn’t care about even ten years prior. Bobos led a revolution in redefining ‘high quality’ in hundreds of consumer categories starting in the 1990s and continuing through this day. Almost all of these new products reflected emerging values within a portion of the upper-middle-class elite. When I step back, though, most can roll up into very elitist buckets: greater longevity, higher quality of life, elite fitness, thin/skinny body image; the list keeps growing. These newer values or objectives rest on a more fundamental cultural ideology or version of it: hyper-individualistic competition within elite social networks. It continually optimizes life choices for something better, more contemporary, and more modern. It is a class ideology anchored in the near future, with its sights set way into a future where upper-middle-class people self-improve evermore. Hyper-individualism is not about actually being unique or acting solipsistically. It’s about optimizing and refreshing/updating choices that have become habits as much as possible until you run out of energy or time. And we all do.

What are the social questions raised by America’s exploding elite?

I do not think it is harmless that a society develops a large elite group this vastly more educated and wealthy than the majority it lives near but with whom it does not interact in any meaningful way. My recent research among Gen X and Baby Boomer Americans revealed that the upper-middle-class are far less likely to socialize with adults lacking a high-school degree than the average person in these generations. Only 9% of upper-middle-class people do this, yet those outside this educated, affluent elite are twice as likely to socialize with the least educated adults - 20% do this.

An elite living mostly with itself has only transactional monetary relations with the broader public. We hire them into our homes and lives. They don’t come to our weddings. An elite whose consciousness lies anchored in a personalized, optimized future state and how to get there is an elite that grows ever more detached from the concerns of the majority in America. A Hunger Games-style urban elite has already formed.

The questions this group raises include, but are not at all limited to, the following:

1. How do we reconnect elites to ordinary Americans whom they rarely meet?

2. What constraints on individual freedom must emerge in the media and finance spheres to prevent harmful misuse of personal liberty?

3. What forms of new, inclusive community can be created to keep the elite in check?

4. How do we defend against elite misuse of populism to fight intra-elite battles?

5. How do we shrink the elite to strengthen the majority?

6. How does America avoid a neo-nationalist (and likely tyrannical) solution to the intra-elite conflict between the old and future order of things?

I would appreciate your comments! So have at it.