By coming to terms with the fact that although they’re not billionaires and probably won’t ever be, they’re still much better off than 90% (or 80% according to some economists) of the population and therefore might as well continue to support the billionaire-driven system that keeps them in BMWs and out of crushing debt even as it turns the country into a two-class system. This does not make the members of the middle class, it makes them members of the upper class.
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Let me rephrase my question.
Between the USA and Europe, there are a few millions people able to afford a large house and a premium car. Let us suppose that I would be in my 20s and want to be one of them. What should I do? I don’t expect a foolproof explanation on how to become rich, that would be absurd, but I would like to better grasp what is going on. For example: what kind of job do these people hold? If their wealth does not come from their salary, where does it come from? Investment? What kind? Real estate or shares, for example? Are they active in politics? Or did they get their wealth in illegal activities?
Choose your parents carefully.
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That certainly helps, but not all of them had parents who were also millionaires.
The point is, when inequality is so high, social mobility becomes mythical. Therefore, choose your parents wisely.
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I can’t speak to Europe, but in modern America step #1 for most of them is (as @Wanderfound and @kimmo already noted):
Choose the right parents.
Whether you’re talking about income from investments, income from salary, income from politics, etc. or various combinations of the preceding, this is the primary predictor of success. Having the good fortune to be born into the right family greatly increases one’s chances to be able to afford that house and luxury care.
Who are the “right parents”? In the U.S., it’s usually white or frequently Asian (the “model minority”), always at least middle class (in the pre-2000 sense of the term), usually college-credentialled (as distinct from college-educated), usually living in a quiet and safe neighbourhood. All this provides a child with the resources and social and economic capital and connections to have a chance at growing up to become the proud owner of a McMansion and Mercedes and to (understandably) buy into and preserve the system run by the billionaires.
What are the sources of that affluence? Inheritances sometimes, family businesses frequently, entrepreneurship for risk-friendly personalities, but most often skilled white-collar and professional careers that begin in established corporations and organisations: accountants, lawyers, physicians and dentists, engineers, software coders, business managers, etc. But one’s chances of getting those sources of affluence are highly dependent on choosing the right paarents.
The parents don’t have to be millionaires themselves (this is still relatively rare, and those cars and homes you see are often heavily leveraged). They can have all of the characteristics described above without being considered wealthy in the context of the national economy.
We are moving into a new phase when only the children of the truly affluent (with a handful of lottery-winner outliers to keep up appearances) will have those opportunities for upward mobility or stability, but that’s a recent phenomenon; it’s the outcome of the 35 years of the GOP waging covert war on the American middle class and the end of the post-war economic anomaly in the West that occured at some point between 2001 and 2008. There’s also growing evidence of increasing downward mobility for the children of what’s left of the middle class.
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If what you are telling is true (I have no reason to thin otherwise, I don’t know), then there is a short to medium-term problem.
You are saying that to become affluent, your parents have to be in a somewhat affluent sphere themselves. So there is little upward mobility.
On the other hand, there is downward mobility. The child of an affluent parent may become destitute or the parents themselves may become bankrupt. We had here people with a university education and difficulties tending the roof of their home.
No upward mobility and downward mobility means that soon the US will only have the poor. How soon depends on how far the process has already advanced. Possibly, if the mansions and prime cars are as leveraged as you seem to believe, soon is right now.
Normally, when people realise that the situation is that bad, there is an economic crash. Are there other indicators of an imminent economic crash in the USA? I read that the economy is rebounding, that employment is rising, etc…
You betcha. Also a long-term one.
Correct.
Correct. Late-stage capitalism reaches a point where it begins to to eat its own young, Moloch-like.
No, there will be a two-class system: 80-90% poor, 10-20% affluent (including approx. 1% HNWIs and .01% UHNWIs), perhaps with a politically impotent intelligentsia playing the role of the “middle class.”
A significant number of people don’t realise the situation is that bad. Many of them are the “temporarily embarrassed millionaires” in the Know-Nothing 30% of the American electorate.
I don’t know if there’s going to be a big crash (I wish I did – I’d be very wealthy), but I’m expecting a market correction in the next 18 months if only as a matter of market cycles (but also because I know the kind of businessman the president* is).
For some (mostly the kinds of incumbents we discussed above). For others the last decade has been a mostly jobless recovery that’s mainly served to concentrate more wealth at the top.
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The US recently celebrated achieving the highest median wage in its history. That was notable because the previous high was in 2000. It’s an economy where 0% growth in median wage over 17 years is a good news story.
When people talk about the economy doing well or rebounding, keep in mind those terms are relative to a very bleak alternative.
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