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To most, the Occupy movement is best characterized by the slogan “We are the 99 percent.” Indeed, a year before Occupy sprang to life, the top 1 percent held roughly 35 percent of the nation’s wealth, while the bottom 50 percent held about 1 percent. But the data tell a more complex story, and the bifurcated way that we define “elite” may need adjustment.

As senior fellow at the Brookings Institution, Richard Reeves describes in his new book, Dream Hoarders, that while the top 1 percent overwhelmingly receives a disproportionate share of economic gains, the upper middle class is also “hoarding” resources. Families in the 80th to the 99th percentiles—or those earning at least $112,000—have made out pretty well over the past 35 years. Since 1980, incomes for the top 1 percent skyrocketed, and wages for those in the next 19 percent increased considerably. Comparably, the bottom 80 percent saw wages stagnate. Reeves details how the wage gains for the top 20 percent translate into access to better schools, better colleges, and, eventually, better jobs with higher wages.

Simply put, the privileged upper middle class is “hoarding” the benefits of economic growth for themselves and their kids.

Reeves is spot on—“class barriers” to enter either the rich or the upper middle class are on the rise. But there’s yet another complexity to consider in identifying the elite. What is glaringly missing from Dream Hoarders is an adequate discussion of race and the racially stratified American economy. When we are talking about the upper middle class, or the top 20 percent, we are in fact talking about a group that is overwhelmingly White.

We need ambitious race-conscious solutions.

Census data from 2015 demonstrate that just 5 percent of Black households have an annual income of $150,000 or more, compared to 12 percent of White households. In contrast, 22 percent of Black households earn less than $15,000 a year, which is double the 11 percent rate for White households. In terms of income trends, Blacks are the only racial group that actually saw a decline in their real income since 2000.

Disparities are worse when looking at wealth. The 2016 Survey of Consumer Finances indicates that Black households have median wealth of about $17,600 (inclusive of home equity), in contrast to $171,000 in median wealth for White households. And these disparities persist and even worsen factoring in education. Black families where the head of household has a college degree have less wealth than White families where the head of household dropped out of high school.

The racial wealth gap is an inheritance that predates the 35 years referenced by Reeves. It begins with chattel slavery, when Blacks literally served as capital assets for a White landowning plantation class. And America’s current regressive tax system hoards resources and underwrites dreams, as Reeves details, primarily for the top 20 percent.

A 2014 report by Prosperity Now corroborates that the federal government, through deduction and subsidy, spent $540 billion in asset-building tax programs, like the mortgage interest deduction, the IRA and other retirement accounts, 529 college savings plans, and capital gains rate reductions—policies that reward savings and investments.

And who has savings and investments? The best estimates suggest that 70 percent of the billions in tax savings go to upper middle class and wealthy households. The bottom 60 percent received just 12 percent of these benefits. In the case of mortgage interest deduction, high-income households can receive upward of tens of thousands of dollars of benefit, while the bottom 20 percent of households receive on average just $3 in deduction.

Ultimately, to reverse the wrongs of the past and to create a more equitable society, we need ambitious race-conscious solutions.

The bottom 50 percent of American households own 1 percent of the nation’s wealth.

Baby bonds, originally proposed by economists William Darity Jr. and Darrick Hamilton (co-author of this article), is a bold solution in that vein. Every American newborn would be provided with an account at birth. These accounts would serve as seed capital for when the child matures to adulthood to purchase the economic security of an appreciating asset such as a house, a new business, or a debt-free education. The program is race-conscious and universal given the fact that the bottom 50 percent of American households own 1 percent of the nation’s wealth and because all American babies would qualify. The average account at birth would be $20,000 and progressively rise to about $50,000 to $60,000 for children born into the poorer families. Such a program would cost upward of about $90 billion—that’s less than 20 percent of the $540 billion that the federal government already spends on tax expenditures that mostly benefit the wealthy.

We applaud Reeves for refuting a naive narrative that vilifies the superrich as the only source of economic injustice. We need to pinpoint accurately the elite, then explicitly recognize the racial dimensions of American economic stratification—that the wealthy and upper middle class are overwhelmingly White and underwhelmingly Black. Ultimately, we need ambitious solutions: “race-conscious universal programs,” a term even coined by Reeves and colleague Isabel Sawhill.

It is one thing to recognize income inequality and wealth disparity—and the racially stratified economy. It is another for what is arguably its most powerful cohort—the top 20 percent—to reverse its “opportunity hoarding” ways and assume its fair share of responsibility for fixing it. The easy out is to point at the top 1 percent and stop there; but if you are part of the professional class, you too are likely among the culprits and beneficiaries of an unjust economy.

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Christopher Famighetti

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Darrick Hamilton is the incoming Henry Cohen Professor of Economics and Urban Policy and University Professor at The New School.

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