Dream Hoarders

Richard V. Reeves, a senior fellow at the Brookings Institution, a Washington, D.C. policy research organization, argues that America's most pressing inequality problem is not the outsize wealth of the top one percent but the broader separation of the upper middle class, roughly the top 20 percent of the income distribution, from everyone else. A British-born immigrant who became a U.S. citizen, Reeves positions himself as a member of the class he critiques, frequently using "we" rather than "they" to describe affluent professionals.

Reeves opens by situating his argument in the populist upheaval of 2016. Donald Trump's election and the Brexit referendum both channeled legitimate anger from middle-class and working-class voters who felt left behind by a professional-managerial elite insulated from economic risk. He borrows sociologist Joan Williams's phrase "class clueless" to characterize the upper middle class's inability to recognize its privileged position. A revealing episode occurred in January 2015, when President Obama proposed eliminating tax benefits on 529 college savings plans, tax-advantaged accounts that disproportionately benefit affluent families, to fund broader education tax credits. Within days, Democrats from wealthy districts forced Obama to abandon the plan, demonstrating the upper middle class's outsized political power and fierce willingness to protect even regressive tax advantages. The 2017 Republican tax bill went further, expanding rather than curtailing 529 plans.

Reeves documents how the upper middle class is separating from the rest of American society across multiple dimensions. Between 1979 and 2013, households in the top fifth saw a $4 trillion increase in pretax income, while the combined gain for the bottom 80 percent was just over $3 trillion. Even excluding the top one percent, the next 19 percent gained $2.7 trillion. Citing economist Mark Robert Rank's research, Reeves argues that the top one percent is largely a revolving cast drawn from the rest of the top quintile, making it "us, having a good year" (27). Upper middle-class wealth has also grown substantially, with the 19 percent below the top one percent now holding more than half of the nation's wealth according to economist Edward Wolff's calculations.

Two forces drive this economic separation: rising wages due to increased returns to education and skills, and assortative mating, the tendency of well-educated men and women to marry each other, which amplifies household income gaps. The separation extends beyond finances. Upper middle-class Americans are increasingly clustered in affluent neighborhoods with better schools and stronger civic networks, while health disparities are widening: The life expectancy gap between the top 20 percent and the middle 40 percent grew from less than one year for men born in 1920 to three years for those born in 1950.

Reeves argues that these advantages begin compounding at birth. Women in the top income bracket are half as likely to report an unintended pregnancy as those in the middle. Upper middle-class parents engage in far more intensive parenting: High-income parents talk with school-aged children three hours more per week than low-income parents, and enrichment expenditures are about ten times higher for top-quintile families. Researchers Betty Hart and Todd Risley found that by age three, a child in a professional family will have heard thirty million more words than a child in a family on welfare.

These early advantages carry through schooling. Almost 40 percent of top-quintile families live near public schools ranked in the top fifth of their state, and 18 percent of top-quintile children attend private high schools. Parents in affluent areas volunteer extensively and raise supplementary funds through school-associated nonprofits. By college, six in ten 25-year-olds from top-income families hold bachelor's degrees, compared to one in ten from the bottom 40 percent, and two-thirds of students at the most selective institutions come from the top fifth. Postgraduate degrees have become the new entry marker to upper middle-class status.

Upper middle-class status passes down across generations with striking persistence. Using economist Raj Chetty's analysis of administrative tax records, Reeves shows that 37 percent of children raised in the top income quintile remain there as adults, a rate of stickiness at least as high as that at the bottom. Comparing the United States to other nations, he cites research showing class is more persistent in the U.S. than in the United Kingdom: 36 percent of top-quintile children remain at the top in the U.S. versus 30 percent in the U.K. Reeves makes the uncomfortable case that downward mobility is a mathematical necessity: The top fifth can accommodate only 20 percent of the population, so for more people to rise, some must fall. Rising inequality increases the stakes of falling, which incentivizes parents to erect a "glass floor" beneath their children, further entrenching class rigidity.

Reeves addresses the role of meritocracy next. Drawing on Michael Young's 1958 dystopian novel The Rise of the Meritocracy, which coined the term, he warns that meritocracy can harden into a hereditary system when high-skill individuals marry each other, raise high-skill children, and come to see their advantages as morally deserved. The labor market rewards skills and credentials effectively, Reeves argues, but opportunities to develop those skills are deeply unequal. He illustrates this with Hunter College High School in Manhattan, a free, test-based public school where the share of Black students fell from 12 percent in 1995 to three percent by 2009 as affluent families invested in intensive test preparation. The result is what Reeves calls "meritocracy without mobility."

Beyond unequal skill development, Reeves identifies "opportunity hoarding," a term borrowed from sociologist Charles Tilly, to describe cases where scarce opportunities are allocated through anticompetitive means. He examines three mechanisms. First, exclusionary zoning: Local land-use regulations protect upper middle-class neighborhoods and school access, while federal tax subsidies like mortgage interest deductions overwhelmingly benefit the top quintile. Second, legacy admissions at elite colleges: Acceptance rates for legacy applicants at Harvard, Yale, Princeton, Georgetown, and Stanford run two to three times higher than general rates. Reeves discusses the case of Jared Kushner, whose admission to Harvard followed his father's $2.5 million donation despite a high school official's assessment that Kushner's academic record did not warrant acceptance. Third, the informal allocation of internships: Ranked as the most important factor in hiring recent graduates, internships are disproportionately accessible to students whose families can subsidize unpaid work in expensive cities, and even progressive politicians' offices have engaged in favoritism when distributing these positions.

Reeves proposes seven policy steps. The first four aim to equalize human capital development: expanding access to long-acting reversible contraceptives (LARCs) to reduce unintended pregnancies, increasing home visits for new parents through evidence-based programs, paying the best teachers more to work in the poorest schools, and reforming college funding by replacing 529 tax breaks with broader credits and investing in community colleges and vocational education. The last three target opportunity hoarding directly: curbing exclusionary zoning by promoting "missing middle" housing like townhouses and duplexes, ending legacy admissions through legal challenges and financial incentives, and opening up internships through stronger labor protections and financial aid for intern costs. To fund these proposals, Reeves notes that half the financial benefit from the ten largest federal tax breaks flows to the top quintile and that the mortgage interest deduction alone costs roughly $70 billion per year without raising homeownership rates.

Reeves concludes by calling for an awakening of conscience. He critiques both Charles Murray, an author focused on upper-class culture, and Robert Putnam, a scholar of class and community, for being too gentle with their affluent readership. Drawing a parallel to the Progressive Era, he cites historian Richard Hofstadter's observation that the movement's moral indignation was "in a great and critical measure directed inward" (158) and calls on the upper middle class to recognize its privilege and make modest sacrifices. The central question, he writes, is whether the upper middle class will share the American dream or continue to hoard it.