Meet the 'semi-rich': Millions of high-income Americans may not feel wealthy but are, says 'The 9.9 percent' author

"I think a defining feature of the group culturally is this belief in meritocracy."


When talking about economic disparity in the United States, politicians and advocates tend to focus on the top 0.01% and the bottom 90%.

An influential percentage of the population exists between those two demographics: The 9.9%, or the "semi-rich," according to philosopher Matthew Stewart, author of "The 9.9 Percent: The New Aristocracy That Is Entrenching Inequality and Warping Our Culture."

The net worth of that group ranges from about $1.2 million to $20 million per household, Stewarts says. Those assets include cash savings and investments, as well as real estate. Many members of the 9.9% don't feel enormously wealthy but they are still doing better than the vast majority of the country.

"The interesting thing about this class is that it's held even," Stewart says. "People who make it in that group tend to hold on to their cash. People above that have seen their fortunes triple and people below that have seen their wealth decline."

Grow spoke with Stewart about what defines the 9.9%. This interview has been edited for clarity and brevity.

What are some indicators, aside from money, that someone is in the 9.9%?

The cultural things are hard to identify or describe, but I think we know them. Education is clearly one big identifier. They tend to be education-focused. The highly educated, especially people with advanced degrees, have done particularly well.

The second is housing. One of the surest ways to accumulate the wealth that lands in the 9.9% is to have bought housing in the right places.

On balance, they tend to be more in the professional and managerial kinds of roles. It's not that everyone in the 9.9% is that. There are lots of small business owners, but the core of the people have found a niche in a professional hierarchy.

Describe an everyday person who would be in the 9.9%

If you're a part of the 9.9%, culturally and economically, you had your kids in a thoughtful or planned way and you take for granted that they will go to a college and they will go to the best college they can get into.

If you own a home or aspire to own a home in a respectable ZIP code where other people have these same attitudes and values, you're in that percentage.

If you can look forward to a retirement where you won't be thinking excessively about money, but at the same time will be able to live in a metropolitan area with lots of cultural benefits [...] If you think about retirement that way as opposed to something that's a little iffy or something involving living in a cheap place, that will make you a member of the 9.9%.

One of the surest ways to accumulate the wealth that lands in the 9.9% is to have bought housing in the right places.
Matthew Stewart
philosopher, author

Do the 9.9% hold a different set of beliefs than other Americans?

The people who buy into the 9.9% are much more insulated than they tend to imagine. They spend most of their time talking to other people on similar trajectories and are far more isolated than they think they are.

I think a defining feature of the group culturally is this belief in meritocracy, in the sense merit is what makes the economy work. The sum total of our GDP is the sum total of the individuals in it. Everyone earns what their merit is worth. That is coupled with a market myth that says that whatever people do that earns money is essentially good for society.

There is an ethos of approaching life as a kind of optimization problem. That shows up in parenting and other areas as well. Lots of focus on reproducing a merit system in one's kids.

Is this belief in meritocracy misguided?

You've had this huge divergence in incomes and people want to explain that. And it turns out the handiest explanation they can come up with is merit, but there are a number of reasons it just doesn't add up. They have to assume there is a lot more merit in the world now than there was 40 years ago, and that's kind of strange.

The distribution of income doesn't look anything like the distribution of human aptitude. Merit doesn't explain the divergence in income, but it is what people turn to. It's the thing they want to believe explains the outcome. The people who operate as gatekeepers at fancy and selective institutions like banks, all of them start to develop new systems that qualify this merit.

It's an after-the-fact rationalization as opposed to an actual explanation.

I'm not saying hard work isn't a good thing and doesn't help people get ahead. In a reasonable human society, there are ways of rewarding talent and effort that don't produce the kind of distortions we see now.

How does the 9.9% vary across racial lines?

The numbers are not very precise. White people make up about 90% of the 9.9%, which is not at all representative of the total. It's not all white but much more white than the rest of the population.

Asian Americans are roughly evenly balanced, they are in the top 10% and 90%. Blacks and Hispanics are at 1.7% and 2.5% of the 9.9%. People of color are radically underrepresented in [the] 9.9%.

People of color are radically underrepresented in [the] 9.9%.
Matthew Stewart
philosopher, author

Is this racial imbalance something the group recognizes?

In American political culture and social culture, there is a huge emphasis placed on virtue signaling and status posturing. Claiming to have a very prejudice-free mindset is very characteristic of the 9.9%. That, I think, is often a way of evading the economic privilege that is at the base of the 9.9%.

There is a significant effort of members of the 9.9% to show they are opening a door and telling people of all colors they can come into the group. But if you don't change the basic economic equality, that has very little impact on the world; it's just a way of polishing up the credentials of this elite group.

Do you think the belief in meritocracy and blind spot for race is a generational attribute?

Historically, you're talking about a generation that's already forgotten aspects of the welfare system [that] we had from 1940 to 1970. In the minds of the successful boomer, that money was going to people of color, but really it was going to the white middle class. The forgetting of that has been a crucial part of the legacy that then led to the skewed distributions we have today of wealth and income.

How did the U.S. develop this fractured class system?

The United States is going through what other countries have gone through when you have an extended period of rising inequality.

A class system forms and an upper-middle class tends to break off. In past times it might have been a priestly class. It's kind of typical. It's just that Americans are not so aware of it because we are living on the last fumes of an evaporating middle class and everyone likes to pretend they are middle class.

Why do Americans like to say they are middle class?

That ethos is slowly going away, but people are reluctant to give it up because if you believe in a meritocracy then where you really want to be is in the position of someone who is middle class but someone who has succeeded. It's important to their [self] esteem.

People hold on to that middle-class myth to pretend what's happening isn't happening.

How much responsibility should or can the 9.9% have for making society more equitable?

People in this group are right in that they don't have a huge amount of influence individually. But there are two things people should be aware of. One is that they often are the beneficiaries of advantages they don't fully acknowledge or appreciate, and I think they should be aware of those.

On the housing thing, there are quite a few people whose financial stability and net worth has come about through the luck of the real estate market. Too often they imagine that was from their own genius or their contributions to communities. And then when these same people are asked to make decisions that might make housing more affordable for other people, they slam the door shut.

People hold on to that middle class myth to pretend what's happening isn't happening.
Matthew Stewart
philosopher, author

Most members of the 9.9% also talk about the amazing virtues of education and go out and build these systems where the educated will succeed. Then we have a system of financing college where a large majority of people have to buy that. They have to buy that behavior or life pattern.

It's like someone manages to jump across a pit of fire and get to the other side and then convinces everyone else they should do the same thing. Unfortunately, statistically, those following that model are not all going to succeed. It does not make sense to have a society that is either defaulting on student debt or they are so burdened by it they can't buy houses or take other important steps in life.

If you buy the whole merit myth, you can turn around and blame them, but I think that wrong. We set up a false model for people to follow.

I'd like to see people from this group recognize where some of their advantages come from and make the world a more affordable place.

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