How Can America Be So Miserable When It’s So Rich?
The American economy is the envy of the world.
Actual Americans, however, are not happy about their economy, and they’ve been unhappy about it for a long time.
Both of those statements are true, and until recently, frankly, they stumped me. How could it possibly be rational to feel such prolonged pessimism in the face of such extraordinary economic growth?
Over the last quarter-century, G.D.P. growth in the United States has far outpaced growth in Europe and Japan, two of our primary economic competitors (outside of India and China), to such an extent that many of Europe’s most powerful nations have economies only as prosperous as those of our poorest states. British and French living standards, as measured by disposable income, for example, are more comparable to that of Mississippi, still the poorest state, than to America’s as a whole.
We hear about a shrinking middle class, but it’s shrinking because the ranks of the rich and the upper middle class are growing. According to an analysis by the economists Scott Winship and Stephen Rose, the core middle class (defined as households with incomes from 250 percent to under 500 percent of the poverty line) shrank from 35.5 percent of families in 1979 to 30.8 percent in 2024. That may not look like much at first glance, but that’s a 13 percent decline.
It’s not because Americans are getting poorer. They’re getting richer — much richer. The percentage of Americans who were poor or near-poor (less than 150 percent of the poverty line) plunged from 29.7 percent to 18.7 percent over the same time period. The percentage of lower-middle-class families (150 percent to under 250 percent of the poverty line) shrank as well — from 24.1 percent to 15.8 percent.
During the same period, the share of upper-middle-class and rich Americans exploded. In 1979, 10.4 percent of families were upper middle class, with incomes from 500 percent to under 1,500 percent of the poverty line. By 2024, the percentage had almost tripled, to 31.1 percent, and the percentage of the rich (incomes of 1,500 percent of the poverty line and higher) went from a microscopic 0.3 percent to 3.7 percent, a more than tenfold increase.
To give you a sense for what those numbers mean, the income thresholds that divide the five classes for a family of three, for example, were $40,000, $67,000, $133,000 and $400,000 in 2024 dollars.
The result is that immense numbers of Americans live lives that would look extraordinarily prosperous compared with previous generations. For all their justified complaints about housing affordability, Americans on average live in larger and more luxurious homes than Americans in generations past.
Previous luxuries — things like central air, big-screen televisions, home computers and multiple cars — are now common staples of American life across most, although of course not all, of our social classes.
America is still the land of opportunity. We can still generate enormous amounts of wealth for tens of millions of people.
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I used to be the annoying person who’d respond to subjective economic malaise by spewing objective economic statistics — all with the goal of arguing that pessimism might be real, but that it’s irrational. After all, aren’t most people satisfied with their own economic conditions, even if they’re concerned about the economy writ large?
Also, isn’t most of this partisan anyway? Economic optimism and pessimism flip depending on who’s in office, with Republicans instantly more optimistic when Republicans win the White House, and Democrats behaving the exact same way when their party controls it.
A closely divided country will never express broad-based economic optimism.
But then I read a piece that completely changed my perspective, and once my perspective changed, I saw a reality that I couldn’t unsee — we are miserable in part because we are wealthy.
The piece, which appeared in the Times Opinion section last August, was by Daniel Currell, a management consultant, and it was about the economics of Disney World. It described a park once accessible to most Americans that has become extraordinarily expensive, charging fees that would crush the budgets of countless millions of American families.
But it’s not just the base-line cost of attendance that has exploded. Disney offers various extra benefits (at extra cost) that create a multitiered experience. Think of the park as creating something like the boarding groups for airline flights. Life is just better if you’re in Group 1.
In one sense, the Disney story is understandable and lamentable, but it’s hardly alarming. Only a small fraction of Americans will go to Disney World in any given year, and if there are many more rich Americans, then it only makes economic sense to create benefits that cater to their tastes (and empty their wallets).
But it’s not just Disney. The examples are all around us. This month, The Wall Street Journal published a fascinating article about the explosive costs of youth sports. The average family’s annual spending on baseball, for example, increased to $1,113 from $660 between 2019 and 2024.
That’s partly because the nature of youth sports has changed. When I was young, we all owned a bat, a glove and a few balls. We signed up for Little League at a community table set up outside the entrance of the closest Walmart, and we joined teams with names like Tom’s Oil Change Tigers and Wayne’s Video Wildcats.
And now? Travel sports have taken over, and travel sports are expensive. As The Journal reported, “Teenagers on travel teams are rolling into weekend tournaments wearing a few thousand dollars of apparel, equipment and swag.” Forget the local teams sponsored by local businesses. Now you often find yourself traveling regionally or maybe even nationally for teams called Alliance A or Alliance B, representing different branches of your chosen travel sports company.
If you’re a sports fan, forget about going to see your favorite pro team unless you’ve got a lot of extra cash on hand. As my colleague at The Athletic Henry Bushnell reported in December:
The price of attending an N.F.L. or M.L.B. game rose, on average, by around 300 percent from 1991 to 2023, according to the Fan Cost Index. The average N.F.L. ticket now costs more than $300.
The cheapest ticket to an average N.F.L. game is around $169, per an Athletic analysis earlier this season — more than every single standard English Premier League ticket except those in the most expensive tier for the most appealing games at Arsenal.
And what about flying? To purchase a plane ticket is to open a restaurant menu. You’ve got choice after choice of seating tiers. It’s not just First Class and Coach — boarded back to front — any longer. Nope. We’ve got First Class, Main Cabin Extra, Main and Basic Economy. We’ve got ConciergeKey boarding, preboarding and nine other boarding groups.
The result can be endlessly frustrating. We’re constantly reminded that America is a multitiered society in which a high income buys you a very visible degree of prosperity, and a decent income gives you nothing special at all. There are so many high-income Americans that the entire economy is warping to accommodate the minority at the expense of the majority.
In other words, we have a Group 1 economy for a Group 9 nation, and it’s no wonder that so many Americans feel economically disadvantaged and insecure.
There is a statistic that backs up this perception. In February of last year, The Wall Street Journal reported that the top 10 percent of earners — households earning about $250,000 or more — now account for 49.7 percent of all spending. That’s a staggering percentage — a percentage that can tilt an entire economy toward the top.
Extend the analysis to the top 40 percent of earners and that percentage grows to more than 75 percent of all spending. That means that the poorest 60 percent of Americans account for less than a quarter of all spending. Put all this together, and it means that individually rational economic choices are driving the entire economy to cater to the wealthy. And if the top 10 percent are far and away the dominant spenders, that will mean that even members of the upper middle class will strain to feel secure.
If you’re a car manufacturer, do you want to build low-margin entry-level cars? Or do you reap much greater rewards by selling the high-margin S.U.V.? If you’re a developer, luxury housing is typically much more profitable.
Yes, used cars can still be very nice cars, and there is evidence that building more high-end housing can lower prices by increasing overall supply, but middle-class America is used-car America. The shiny new thing? That’s for someone else.
The result can be a constant sense that you’re a second-class citizen. You check into hotels eyeing the shorter Gold check-in line. You ride in the rental shuttle past the Preferred kiosk, where the frequent travelers just grab their keys and go.
Or, much more consequentially, you move to a new city and find that the wait to get established with a new doctor can stretch for months — unless you are able to pay the high monthly fee for concierge medicine. Then you can be seen right away, perhaps with a bonus offer of Botox for the middle-aged patient.
And what if you live in a city that the top 10 percent love? Well, then even being upper middle class doesn’t feel affluent at all. Six-figure salaries purchase shoe-box apartments, and everything from groceries to gas costs an absurd amount. Soon enough, you’re googling the real estate prices in Chattanooga or Des Moines — surely it’s cheaper there — whether or not you intend to ever leave.
In this context, “affordability” doesn’t just refer to the cost of a specific good (or even necessarily the rate of inflation at any given time) but rather to the price of entry into what should feel like a normal American life — one that includes baseball games with the kids, a doctor on call, a home you like, and, at the very least, a basic sense that you haven’t been left behind.
Wealth always tempts us to be discontent. We’re cursed with that insatiable desire for more. We’re prone to envy. There is a reason we talk about keeping up with the Joneses.
But what if the Joneses inadvertently also make it hard to keep up? What if their sheer economic power changes our communities so much that we’re priced out of our doctors, our homes, our sports and many, many other things we need or want?
In this story, maybe the problem isn’t oligarchy. Elon Musk’s billions don’t tangibly change my life. But all the doctors, lawyers, engineers and accountants in my city do. They’ve bought the houses in the gated community. Their kids are playing travel ball. Because of all their money, the next restaurant is more likely to be a farm-to-table bistro than a Waffle House.
No one is the clear villain in this story, and that’s one thing that makes the problem difficult to solve. We can’t target and defeat a specific set of bad actors who are immiserating America. Everyone is acting in rational self-interest. Why not be a lawyer or an engineer if you can? Why make less money selling food to kindergarten teachers when you can charge architects more? Why not pay for concierge services if they make your life easier? Why not be a concierge physician if the pay and lifestyle are better?
It’s these choices, made millions of times by millions of Americans, that are both spurring our growth and — perversely enough — increasing our misery. We can’t have what we can’t afford, and we can’t have what we used to afford, and that combination can make even a middle-class American who may be well-off by historical standards feel very poor indeed.
Some other things I did
On Monday, we published my interview with Gen. Stanley McChrystal, the former commander of Joint Special Operations Command and the former commander of U.S. forces in Afghanistan. We discussed the Iran war, military leadership and his call for national service. The entire interview was fascinating, but this part — when the general talked about the “three seductions” of military power — was particularly interesting to me:
Gen. McChrystal: The other thing I wanted to talk about, though, because you brought up the Maduro raid: There are three great seductions that happen to American administrations and to the military.
The first is the idea of covert action. A new president comes in, and he’s told by the intelligence community, “We can create this great effect and it will be covert. No one will ever know who did it, and it’ll just be a good outcome.” And in my experience, it never stays covert and it rarely works.
But it’s seductive because it seems like an easy approach to a knotty problem.
The second seduction, which I lived as a part of, is the surgical Special Operations raid. That is probably epitomized by the Maduro raid. I would argue that we demonstrated extraordinary competence that night, but not much changed. I don’t think that we actually demonstrated the ability to change the facts on the ground to any extent.
Which gets to the third great seduction, and that’s air power. We all love air power. In World War II, we went into the war with the Douhet theory, that air power, the bomber, will always get through, and therefore air power will be dominant.
On Saturday, my round-table discussion with Jamelle Bouie and Michelle Cottle was about Iran and the SAVE America Act. I had a question.
French: The second thing that’s really interesting — and Jamelle, in your latest piece, you touched on this — have Republicans thought this through?
Cottle: That’s what I want to know.
French: Because if you look at the numbers, in 2024, Kamala Harris won college-educated voters by more than 10 points. Trump won non-college voters by more than 10 points, and there were more non-college voters than college voters. OK, fast-forward to right now: Who do you think has their citizenship document squared away more? College voters or non-college voters? It’s college voters by a mile.
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