Determining who is super-rich, private banking edition

Categorizing people into different income groups is an interesting exercise for social scientists but it may be necessary for certain occupations. Take private bankers as an example:

Call it economy-class rich. Business class? That’s $100 million. First class? $200 million. Private-jet rich? Try $1 billion…

The measure of what makes someone rich has changed dramatically in the past two decades. In 1994, when Peter Charrington, global head of Citi Private Bank, first joined the firm, “Three million was largely considered ultra-high net worth across the industry,” he recalled. “Fast-forward almost 25 years, and $25 million is how we define ultra-high net worth.”…

Placing investable assets of at least $25 million with a wealth manager—and clients with that amount or more tend to work with a few firms—can bring access to initial public offerings, and having at least $5 million in investments moves a client past one regulatory hurdle to taking part in private offerings…

It’s direct investment in companies and buildings where the line between the rich and seriously wealthy is most pronounced. “This is a threshold differentiator among the world’s wealthiest, compared to the merely very wealthy, let alone the 401(k) investor,” said J.P. Morgan Private Bank’s Duffy. “These very large families are investing in private companies, owning a percent of the company versus a share of a public entity.”

On one hand, $25 million is pushed as a rough cut-off line but, on the other hand, there are some fine gradations both above and below this level. Does the quest to differentiate oneself in terms of resources as well as to offer different levels of service to such people ever end? (Presumably it must stop with the wealthiest people in the world but then there may be a quest to keep pushing those number upward.)

Another piece of this that is worthwhile to consider is the true sign of wealth is to buy into capital or the “means and modes of production.” It is one thing to own objects or investments and it is another to own significant stakes in companies and buildings. For example, the growth machine model of urban development would involve these super-rich individuals who the clout and resources to influence and direct development.

The decline of sociological interest in rural areas

While addressing rural poverty, this article discusses why sociologists pay more attention to cities:

American disinterest in the poverty of its own pastoral lands can be traced across the Atlantic Ocean and back several hundred years to the origins of social sciences in academia. The rise of these disciplines coincided with the Industrial Revolution and the mass migration of peasants from the country into cities. As an effect of these circumstances, the leading theorists of the era—Karl Marx, Emile Durkheim and Max Weber—were primarily concerned with living conditions in cities and industrializing societies, setting the foundation for the metro-centrism that continues to characterize the social sciences.

“In academia, there’s an urban bias throughout all research, not just poverty research. It starts with where these disciplines origins—they came out of the 1800’s—[when] theorists were preoccupied with the movement from a rural sort of feudal society to a modern, industrial society,” Linda Lobao, a professor of rural sociology at Ohio State University, tells Rural America In These Times. “The old was rural and the feudal and the agricultural and the new was the industry and the city.”

Similarly, the advent of the study of poverty in sociology departments across the United States during the Progressive Era centered nearly exclusively on the metropolis. In the 1920s and 1930s, the University of Chicago’s influential School of Sociology utilized the city of Chicago as a laboratory for the development of the discipline. According to an article published in Annual Review of Sociology by sociologists Ann Tickamyer and Silvia Duncan, poverty in the city was “one of the many social pathologies associated with urbanization, mass immigration, and industrialization”—issues that were at the heart of the Progressive movement.

Lobao explains that around the same time there arose a “small,” but “vibrant” contingent of rural sociologists at Penn State, University of Wisconsin Madison, Cornell, Ohio State and University of Illinois Champaign-Urbana. But the role of rural sociology, she says, has remained perpetually marginalized, a “residual category” outside of the mainstream discourse. Today, it is not uncommon to see rural sociologists placed into colleges of agriculture, where corporations like Monsanto rule, rather than sociology departments—pushing them further into the recesses of the social sciences.

American sociologists have a number of blind spots and this one is when I’m aware of as an urban sociologist. While the founders of sociology were not primarily focused on cities, many of the changes they observed were based on urbanization. Marx, Durkheim, and Weber wrestled with the changes from agrarian societies to city-based industrialized systems. The first major sociology programs in the United States – places like Chicago, Columbia, and Harvard – tended to be in or near large cities and this still holds true today. This all happened as the United States rapidly transitioned in 100 years from a rural country in the early 1900s to a society where more than 80% of the population lives in metropolitan areas. What’s left behind? Those places further away from the major research schools – which I would argue also includes suburbs – that sociologists find less exciting and tend to generalize about.

There are occasional counterexamples to the urban focus of American sociology. For example, see Robert Wuthnow’s 2013 book on rural America.

“What if the greatest threat to capitalism…is simply lack of enthusiasm and activity?”

In a long excerpt from The Happiness Industry, William Davies explores a real threat to capitalism: a lack of happiness.

What if the greatest threat to capitalism, at least in the liberal West, is simply lack of enthusiasm and activity? What if, rather than inciting violence or explicit refusal, contemporary capitalism is just met with a yawn? From a political point of view, this would be somewhat disappointing. Yet it is no less of an obstacle for the longer-term viability of capitalism. Without a certain level of commitment on the part of employees, businesses run into some very tangible problems, which soon show up in their profits.

This fear has gripped the imaginations of managers and policymakers in recent years, and not without reason. Various studies of employee engagement have highlighted the economic costs of allowing workers to become mentally withdrawn from their jobs. Gallup conducts frequent and wide-ranging studies in this area and has found that only 13 per cent of the global workforce is properly “engaged,” while around 20 percent of employees in North America and Europe are “actively disengaged.” They estimate that active disengagement costs the U.S. economy as much as $550 billion a year. Disengagement is believed to manifest itself in absenteeism, sickness and—sometimes more problematic—presenteeism, in which employees come into the office purely to be physically present. A Canadian study suggests over a quarter of workplace absence is due to general burnout, rather than sickness.

Perhaps people should turn their attention away from the NSA and toward their employers:

Rather than the rise of alternative corporate forms, we are now witnessing the discreet return of the scientific management style, only now with even greater scientific scrutiny of bodies, movement, and performance. The front line in worker performance evaluation has shifted into bodily-monitoring devices, heart-rate monitoring, and sharing of real-time health data, for analysis of stress risks. Strange to say, the notion of what represents a good worker has gone full circle since the 1870s, from the origins of ergonomic fatigue studies, through psychology, psychosomatic medicine and back to the body once more. Perhaps the managerial cult of optimization just needs something tangible to cling onto.

Studying happiness (and related concepts like life satisfaction and well-being) is its own academic subfield – see earlier posts here and here. And governments are very interested in well-being as well with measures like Gross National Happiness from Bhutan and regular reports about the happiest countries on earth.

All of this reminds me of sociologist Arlie Hochschild’s research on “emotion work” in relationships to keep them going and “emotion labor” in jobs that require a consistent cheerfulness or happiness as part of the routine. This would include a lot of service and retail jobs where employees regularly interact with customers and need to present an upbeat image. This is not easy to do and can be quite draining.

And what might Marx say about this – capitalism goes out not with a revolution but rather with indifference and apathy?

Americans labor/work in order to…

One day past Labor Day, some quick thoughts on why Americans work so much:

-We have the idea that hard work is a primary reason that people get ahead.

-We work because we need money. Many (not all) make enough to subsist even as the median income has been stagnant in recent years and working multiple low-wage jobs is seen as a badge of courage. Then, the money can be used to consume or buy the things we need to have to be up-to-date people (these days, a smartphone, flat-screen television, Internet access, etc.) or to assert our social standing. Or, we may buy things just because we like having a lot of things and we enjoy shopping and acquiring. Plus, much of our economy depends on consumer spending so people without jobs and money leads to some big issues for many economic sectors.

-We work because some like their jobs and want to use their skills and use their time doing something important or productive.

-We work to have an identity. No work = not being productive or not contributing to society. Either work or parenting (with a tentative guess that the first is ascending and the second descending) is the primary task of the adult life.

-We work to bank vacation days that we don’t use to the full extent.

Granted, I was thinking of this after teaching an Introduction to Sociology class the basics of Karl Marx’s observations about society. I paraphrased this quote from The German Ideology (pg. 12-13):

For as soon as the distribution of labour comes into being, each man has a particular, exclusive sphere of activity, which is forced upon him and from which he cannot escape. He is a hunter, a fisherman, a herdsman, or a critical critic, and must remain so if he does not want to lose his means of livelihood; while in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic. This fixation of social activity, this consolidation of what we ourselves produce into an objective power above us, growing out of our control, thwarting our expectations, bringing to naught our calculations, is one of the chief factors in historical development up till now.

If we weren’t in this particular social economic system, how might work be organized differently to take advantage of people’s interest in creativity and production? How much of work today is freeing and leads to improvement of communities and the self?

Siblings dealing with an in-family wealth gap

Inequality by wealthy doesn’t just occur across groups or families – it can be an issue within families.

Experts see a growing trend. The same forces that have increasingly separated the richest Americans from everyone else is dividing brothers and sisters, too. It’s given rise to a mix of often conflicting emotions, jealousy and resentment, disappointment and distance, but also frequently understanding and respect…

As the wealth gap has widened, some mental health professionals say they’ve seen more patients for whom such a divide has become a personal issue.

In 35 years practicing psychotherapy, Janna Malamud Smith says she’s never had so many clients troubled by sibling wealth. The complaints have grown so familiar to her she can riff on them without pause…

A decade ago, sociologist Dalton Conley produced research suggesting that income inequality in America occurs as much within families as among them. Yet the similarities tend to end there. With siblings, “you had pretty much the same advantages and disadvantages growing up,” he says, so big difference in wealth can feel like a judgment on intelligence or drive.

How Americans feel about the wealth gap within their families shapes how they feel about it nationally, whether or not they see it as an inequity that must be addressed, says Lane Kenworthy, a sociologist at the University of California, San Diego…

Poll results suggest that many Americans feel the same way. Asked in October by Pew Research to name the most important reason for the wealth gap, 24 percent chose “some work harder than others,” more than tax policies, foreign trade or the educational system.

One review of Conley’s book The Pecking Order suggests Conley isn’t surprised to find inequality in the home:

Conley takes an opposing view, saying, “The home is no haven in a harsh world—it both creates and reflects that world” (p. 112). The problems of capitalism, racism, sexism, and bigotry that hinder and hurt people in society are the same ills that trickle unnoticed into the home.

This reminds me of Marx’s suggestion that the first exploitation occurred in the family. Also, this hints at the micro-level effects of broader conversations about inequality. It is one thing to have public discussions about the 1% or .01% but it is another to come face to face with these differences within your own family. How often do these kind of close interactions between unequal persons happen? Given our propensities to gather with people like us in our social networks plus the durability of social class in shaping our tastes and life chances, it may not be that often. Hence, the uniqueness of a show like Undercover Boss where the head of the company interacts with the average worker. Perhaps this means we need a show called Unequal Families

Even Utopia needs followers

After watching a number of the early episodes and reading several reviews, I think I know one thing the new reality show Utopia is missing: followers. As some have noted, the show seems to feature a number of outgoing and stubborn personalities. These can be the sort of people reality shows attract: go-getters who are there to win. Even though Utopia doesn’t have the typical winning as it has mostly eschewed competitions (except surviving for an entire year and sending out one person a month), it also appeals to strong-willed survivalists who think they have the right skills in creating a new society.

But, to work in the long-term, every larger society needs followers, people willing to support leaders as well as do a lot of the basic work that needs to be done. Without that, you end up with a lot of disagreement about what should be done and little actual work. If they really worked with leaders and followers, the band on Utopia could really accomplish things: imagine 15 adults working to expand the garden or digging trenches for irrigation. This may happen eventually as the group settles in but the lack of followers in hindering them at this point.

This also reminds me of Karl Marx’s ideas about what a socialistic utopia would look like. This is a quote from “The German Ideology“:

In communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticize after dinner, just as I have a mind, without ever becoming hunter, fisherman, shepherd or critic.

This gives a lot of freedom to individuals but sometimes society does need tasks done.

Seeing the world from behind the Genius Bar

Here is a fascinating look at the world as viewed from behind the Apple Store’s Genius Bar:

When Apple employees are asked what they love most about their job (and they are asked often) most invariably answer “the people.” They mean their co-workers, not the customers.

Because the daily expectations for customer service go beyond anywhere else in retail, only those with managerial ambitions will invoke their commitment to helping people. Some thrive on that. Others get diagnosed with PTSD. Consider that the flagship store on Fifth Avenue in New York City is open 24 hours and has more annual foot traffic than Yankee Stadium, yet only one door. Every day, in every Apple Store, people flood to customer service, when what many truly need is therapy…

This is the dilemma of working for a technology company that is also perceived as a luxury brand: We attract clients who understand that we provide the latest and shiniest things that they must have, while at the same time they have no idea whatsoever how to use them. I wanted to ask Debris, “Did you ever learn about electricity and water?” but instead just recite the question over and over in my head…

I look up at the dozens of people cradling their aluminum babies. Tapping their feet, chewing their nails, licking their lips, they’re worried bad about something that matters to them. I wish Barbara the best of luck, really meaning it, and excuse myself. I unholster my iPod and call out the next customer’s name.

Is this what the modern world looks like or is this highly idiosyncratic and applicable only to Apple stores? The author oozes a sort of Marxist alienation with hints that the work is hard and dealing with people all day long is difficult (and then contrast this with stories about Apple workers in China). Would this job be considered a “good job” today or are the employees hoping for a better opportunity?

It also strikes me that we have a lack of sociological studies today from inside major corporations. Think about the major corporations of the world today – Apple, Google, Walmart, Shell, McDonalds, Disney, and on – and sociologists are stuck observing from the outside. We have to rely on books like Nickel and Dimed that give us an inside glimpse. I assume many corporations may not like such an insider study as some of the findings might reflect poorly on them, but don’t we need ethnographic and participant observation studies of corporations to understand today’s world?