Studying elite/townspeople relations in wealthy Teton County, Wyoming

Elites have made Teton County, Wyoming a home and they have complicated relationships with local residents:

When he visits the downtown bars, “I don’t tell people that I live in a gated community. They accept me as a local,” he tells author Justin Farrell in his new book, “Billionaire Wilderness: The Ultra-Wealthy and the Remaking of the American West” (Princeton University Press), out now…

According to a 2018 report from the Economic Policy Institute, the wealthiest 1 percent in Teton County bring in an annual income that’s approximately 142 times more than the other 99 percent of families in the county. The “average” per-capita income in Teton County is just over $251,000, the highest in the country, according to the US Department of Commerce, and the rest of Wyoming doesn’t even come close, with most counties ranging between $40,000 and $50,000 per year, and none going above $70,000. Coming second to Teton is Manhattan, where the average income is $194,000…

But it goes deeper than taxes. Over the last few decades, the wealthy “feel like they’ve been unfairly criticized and targeted,” Farrell says. “Because of the Occupy Wall Street movement and politicians like Bernie Sanders, attacking the rich has become part of the dominant discourse. I actually had a few people tell me that they’ve come to Teton County to escape the socialist revolution. Wyoming feels like a safe haven for them.”…

Stewart considered this relationship, and others he had with lower-income locals, to be authentic and equitable, but as Farrell points out, “his friendships are often based on economic exchange and uneven power dynamics.”…

Claire Drury, who lives in Teton County but is far from rich, has a thinly veiled disgust for her wealthy neighbors. “Yeah, yeah, yeah, the ultra-wealthy are befriending us savages while drinking a really nice 1976 Bordeaux,” she told Farrell. “It is reminiscent of all the Buffalo Bill Wild West shows, [with] the noble savages sitting there stiff as a board while their photos are being taken in some sort of sepia-toned thing.”

It is rare to find studies of the elite that includes more direct data including interviews. For a variety of reasons, sociologists tend to focus with elites in an aggregate or from a distance. And one advantage of having money and/or power is that people can exert some control of who has access to them.

And yet, this also sounds like a neighborhood or community study (albeit in a more rural area), a common feature of American sociology for over one hundred years. Even the wealthiest members of Chicago’s Gold Coast could not easily ignore the more difficult conditions just down the street from them (from the classic study The Gold Coast and the Slum). Elites do not exist outside of communities and interactions with people around them. How they get along with others – or not – is worth considering as is how these interactions affect broader communities and could affect the influential ways that elites can act.

 

 

A (real) pie chart to effectively illustrate wealth inequality

Pie graphs can be great at showing relative differences between a small number of categories. A recent example of this comes from CBS:

CBS This Morning co-host Tony Dokoupil set up a table at a mall in West Nyack, New York, with a pie that represented $98 trillion of household wealth in the United States. The pie was sliced into 10 pieces and Dokoupil asked people to divide up those pieces onto five plates representing the poorest, the lower middle class, middle class, upper middle class, and wealthiest Americans. No one got it right. And, in fact, no one was even kind of close to estimating the real ratio, which involves giving nine pieces to the top 20 percent of Americans while the upper middle class and the middle class share one piece between the two of them. The lower middle class would effectively get crumbs considering they only have 0.3 percent of the pie. What about the poorest Americans? They wouldn’t get any pie at all, and in fact would get a bill, considering they are, on average, around $6,000 in debt…

To illustrate just how concentrated wealth is in the country, Dokoupil went on to note that if just the top 1 percent are taken into account, they would get four of the nine pieces of pie that go to the wealthiest Americans.

A pie chart sounds like a great device for this situation because of several features of the data and the presentation:

1. There are five categories of social class. Not too many for a pie chart.

2. One of those categories, the top 20 of Americans, clearly has a bigger portion of the pie than the other groups. A pie chart is well-suited to show one dominant category compared to the others.

3. Visitors to a shopping mall can easily understand a pie chart. They understand how it works and what it says (particularly with #1 and #2 above).

Together, a pie chart works in ways that other graphs and charts would not.

(Side note: it is hard to know whether the use of food in the pie chart helped or hurt the presentation. Do people work better with data when feeling hungry?)

Black homeownership rates similar to before 1968 Fair Housing Act

An article about homeownership among black millennials includes this statistic:

Homeownership levels for blacks reached 42.7% in the third quarter of 2019 (compared with 64.8% for the overall population), a near-record low that has virtually erased all of the gains made since the passage of the Fair Housing ACt in 1968, landmark legislation outlawing housing discrimination, census data show.

“African Americans are already being left out of the housing market and that’s exacerbating levels of inequality in this country,” says Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors. “There’s a kind of urgency now within the housing community to bring younger African American buyers into real estate.”

Despite a decade of economic growth in the United States, including record low unemployment and higher wages for black workers, millennials of color make up only a small portion of the overall market for real estate, data show.

This cannot be good. Even as other economic figures might be good, owning a home offers a key way for Americans to build wealth over time. Going further, not having a home means being at the whim of landlords, perhaps more instability regarding having housing, and limited access to wealthier communities where a majority of residents own homes. Furthermore, this data suggests not much has changed in 50 years; does this hint that the gap between groups in the United States remains relatively unchanged?

If the next generation of young adults is struggling to purchase homes, that suggests the problem will continue for at least another 10-20 years. If there are politicians serious about fighting inequality, wouldn’t this be a good issue to take up, particularly given the persistent gaps between black and Latino homeownership and white homeownership?

Predatory contracts took $3-4 billion from blacks in Chicago

A recent study looked at the financial cost of contract buying for two decades for black homeowners in Chicago:

Black families in Chicago lost between $3 billion and $4 billion in wealth because of predatory housing contracts during the 1950s and 1960s, according to a new report released Thursday.

The Samuel DuBois Cook Center on Social Equity at Duke University and the Nathalie P. Voorhees Center at the University of Illinois-Chicago sought to calculate the amount of money extracted from black homeowners on the city’s South and West sides from home contract sales. The report is titled “The Plunder of Black Wealth in Chicago: New Findings on the Lasting Toll of Predatory Housing Contracts.”

Contract buying worked like this: A buyer put down a large down payment for a home and made monthly installments at high interest rates. But the buyer never gained ownership until the contract was paid in full and all conditions were met. Meanwhile, the contract seller held the deed and could evict the buyer. Contract buyers also accumulated no equity in their homes. No laws or regulations protected them.

Home contract sales were a ruthlessly exploitive means of extracting capital from African Americans with no better alternatives in their pursuit of homeownership, the report said. Contract loans were rampant all over the West Side — in East Garfield Park, West Garfield Park and North Lawndale — but also in Englewood on the South Side.

The key here is that wealth generated through homeownership is the sort of asset that gets passed down over time and helps build intergenerational wealth. Many Americans today rely on this same logic: owning a home is a significant investment to draw on later in life. That wealth then enables other possibilities, such as education or moving or acquiring other goods. This long-term wealth goes far beyond the benefits a homeownership has while living in that home; the wealth enables possibilities for future generations.

As one study puts it:

If public policy successfully eliminated racial disparities in homeownership rates, so that Blacks and Latinos were as likely as white households to own their homes, median Black wealth would grow $32,113 and the wealth gap between Black and white households would shrink 31 percent. Median Latino wealth would grow $29,213 and the wealth gap with white households would shrink 28 percent.

Earlier public policy decisions and social practices can have long-term consequences, even decades later.

Downsizing, Marie Kondo, and all the stuff Americans own

Many older Americans want to downsize (and cash out on their homes), Marie Kondo’s approach is popular, but where will all that stuff owned by older homeowners go?

Auctioneers and appraisers, junk haulers and moving companies all seem to be echoing the same thing: The market is flooded with baby boomer rejects. And they cite a number of reasons our kids are turning down the possessions we so generously offer to them. They rent rather than own, live in smaller spaces, collect more digital than physical items and tend to put their money toward experiences rather than things…

Her kids also rejected three sets of formal dinnerware, including Haviland China; vast collections of Lladro figurines and Department 56 Christmas villages; as well as 3,000 Beanie Babies and boxes of soccer awards she and her husband, who both coached for many years, earned with their children.

The only offer she got on any of her treasures? One son wants her Hallmark Frosty Friends ornaments she’s collected over 37 years “because he knows how much they are worth.”

Two scenarios could develop:

1. There will be a growing market in stuff that older Americans no longer want. Perhaps many millennials or Gen Z do not want stuff from their parents but some other American will want it. It does not just have to go to resale shops; enterprising individuals and firms could shop all these items online to find buyers interested in particular niches. Perhaps this could even expand to international markets and be shipped in bulk around the globe.

2. Much of the stuff will simply be thrown away, particularly items that are more sentimental in nature. Some lucky owners will find people to take or buy their unneeded items but much of the rest will simply find its way into landfills. Decades of consumption will end in the garbage can.

I have not seen any estimates either way of how much money all of these goods could generate or how much waste could be involved (or a combination of both).

Also, consider the implications of such a change: younger generations do not take material objects from their parents and grandparents, creating a bit of a gap in a material timeline. Perhaps the shifting of wealth from generation to generation more often takes the form of helping to pay for housing or student loans rather than tangible goods. How does this change memories and collective understandings of the past?

 

Linking secularization and wealth

Political scientist Ryan Burge summarizes part of the sociological conversation about secularization and wealth at a national level:

If you take a course in the sociology of religion at any college or university, the professor will inevitably spend some time on what is known as secularization theory. This theory posits that as societies become more economically prosperous and obtain higher levels of education, the inevitable result is a movement away from organized religion and toward secularization…

ReligionandWealth

The conclusion from this graph is clear: the more economic prosperity a nation enjoys, the fewer citizens of that country say that religion is very important. There are a few outliers, however. China is in the bottom left portion of the graph, which means that based on the country’s economic output it should be more religious than it currently is, with the same occurring in Hungary.

Obviously, both of those countries have a history that is closely associated with communism, which is the likely cause of their low levels of religiosity. On the other hand, the United States is clearly an outlier on this graph. It ranks as the most economically prosperous country in the dataset, but if it were going to be in the middle of the trend line, the overall level of religiosity should be very close to zero.

The takeaway lesson from teaching this in undergrad sociology classes is that the United States is unique in terms of religiosity. Then, the task of sociologists and other social scientists is to tease out why exactly this pattern holds for many industrialized countries and not others. Burge goes on to discuss one explanation from recent sociological research in the United States:

Taken together, the results from this sample tell a simple story: secularization is apparent for older generations of Americans, but for those born after 1950 there is no evidence that education leads to a decline in religious affiliation.

Of course, secularization is not just about wealth. As Norris and Inglehart argue, the more that governments or nations take on the role of providing existential security to residents, the less need residents have for religion.

Or, as a number of scholars have argued, the United States is an outlier for another reason: it has a unique religious market. Because of a lack of government involvement in state religion plus the protection for freedom of religion, religious groups have been free to compete. This competition leads to innovation and religious groups compete for attendees and resources.

 

American battle: weirdness vs. wealth

In a closer look at what is happening to retailers in New York City, Derek Thompson suggests two contrary forces are at work in urban America:

A war is playing out in American cities between wealth and weirdness. The former encourages the pursuit of national trends and national brands—high-end fitness studios adjoining Sweetgreen franchises—for the purpose of maximizing profit on a per-lease basis. That spirit runs counter to the desire for diversity and experimentation, which requires policies that actively promote the survival of small companies in an economy that would otherwise eat them up.

I would suggest this goes further than just big cities. One could argue this is a larger battle fought since at least the end of World War Two involving revered ideals in American culture.

On one side are the powers of standardization, efficiency, predictability, and national chains. Think the rise of McDonald’s, Walmart, and Google. These companies came to represent whole sectors of business and their actions helped lead to predictable user experiences and outcomes across different geographic contexts. They are good at efficiency, offering customers a cheap service while turning out billions in profit.

On the other side are the powers of small businesses, entrepreneurs, diversity, and American individualism. Think the quirky and interesting shopping districts that attract visitors. Many of the establishments offer unique experiences that are difficult to replicate elsewhere. Think businesses that reflect the traits of their owners. These are people trying out ideas and participating in the local community. Non-conformity and cool are still sought after.

Both of these types of businesses reflect American ideals. Many of the national chains we know today started as the more unusual business options that became wildly successful. Some owners and founders want to remain small and others want to try for everything they can get. Obtaining a good balance of these approaches is likely hard to do from a policy level.

Do “real-life millionaires” buy McMansions?

The spending habits of millionaires tends to be a popular topic but few people discuss exactly what kind of house they live in:

A millionaire is a person with a net worth of $1 million or more. Net worth is the value of everything a person owns, minus all debts…

Such an individual could have a negative net worth, yet they drive a Range Rover and live in a McMansion. Meanwhile, the millionaire next door lives in a three-bedroom house and drives a Hyundai…

Although it’s a common misconception that millionaires spend their money on luxury vacations, clothing, houses, and cars, what I’ve learned in growing my own net worth — and speaking with other millionaires — is that after a certain point, money stops mattering as much as it once did.

This seems to line up with the accepted wisdom that many American millionaires are relatively frugal and made their way to that wealth through saving and hard work.

But, if millionaires are not buying all those McMansions, who is? The flip argument expressed above that there are plenty of people living a millionaire lifestyle or above their means does not apply in all cases either.

Part of the trick here might be disconnecting income from wealth. Having $1 million plus in wealth does not necessarily mean you have the kind of assets to put down a sizable down payment or make sizable payments on a large house. (Think of the people who have paid off their mortgages and have a lot in retirement and savings accounts – this is not always easy to access.) Some people might be willing to buy homes based on whether they can afford the monthly payments – does it roughly fall within 30-35% of my monthly take-home pay – while others would be unwilling to splurge on a McMansion.

To be honest, I have not seen a convincing article or set of data regarding McMansion owners. I would guess a good number are in the top 20% of earners in the United States but probably a good portion are also living paycheck to paycheck.

“Naperville named wealthiest city in the Midwest”

Add another distinction to those collected by Naperville over the last 15 years:

Naperville has been ranked the richest city in the Midwest in a list by personal finance website NerdWallet.

The city topped the region — and came in at No. 19 in the nation — in the rankings announced Monday…

NerdWallet rated cities with at least 65,000 people based on data from the U.S. Census Bureau, Zillow Research and credit bureau Experian.

In the Midwest, the runner-up — Carmel, Indiana — bested Naperville in only one category, with a median household income of $109,375, according to NerdWallet.

For its size – over 140,000 people – Naperville is unusually well-off with a high household income, a low poverty rate, and plenty of good white-collar jobs. There are certainly wealthier communities in the Chicago region and the Midwest but many of them are quite small and have little interest in growth.

How did Naperville get to this point? Two articles I have published help explain the suburb’s rise: a 2013 article in Urban Affairs Review that compares Naperville’s growth to West Chicago and Wheaton and a 2015 article in the Journal of Urban History that examines narratives about Naperville’s growth.

Sociologists provide limited hope for reversing inequality

Several sociologists, among other experts, provides reasons for hope and despair regarding the shift where “inequality in America has been on the rise. The result is an alarming concentration of wealth among the country’s very well-off.” As they discuss reasons for hope, I was struck that the policy prescriptions provided by these experts tended to be limited: generally smaller programs (like Moving To Opportunity) or local efforts. This could be the result of several factors: maybe an online article this isn’t the sort of venue to get into large-scale policy discussions; perhaps academics aren’t great at operating in the world of policy as opposed to diagnosing problems; or the scope of study among these academics has tended toward smaller-scale studies. An area where some experts did see hope was in the social movement activity of recent years which has pushed some of these issues into the larger public conversation.

It would be fascinating to ask a broader range of sociologists this question and to get specifics from them on what gives them despair or hope. It can be relatively easy to point out large trends – such as concentrated wealth – but it is more difficult to discuss and push for feasible change. I’m also reminded that the period of less concentrated wealth that people often look to as a shining example – the post World War II era – was the result of particular large events that were difficult to foresee (a worldwide depression, the biggest war the world has ever seen) and responses to these changes.