One of the most perverse, but nonetheless completely true, things I read this week had to do with the anxiety of what pop economists are calling the HENRY set – as in High Earner, Not Rich Yet. The article (at The Atlantic) explains why doctors, lawyers and other members of the “bottom of the top 1%” – more linguistic insanity, I know – are not getting wealthy as fast as the top tenth of the top 1%. The reason is that they are breaking their necks to keep up appearances, indulge themselves and their trophy spouses, while making sure that their children have the best possible shot to catapult themselves into a rung of the 1% even higher than their own.
“If my kid doesn’t get into Harvard and then Goldman Sachs I’m a failure as a parent and my friends will all know it.” Not an actual quote, but that’s the constant inner-monologue, I’m in Manhattan dealing with these people every day, believe me.
The real wealthy, meanwhile, are loaded with stocks, bonds and real estate – essentially where their income is derived from each year, and find themselves working much less hard for much more gain in today’s environment.
Anyway, here is an actual quote from the Matt O’Brien piece:
But another part of it is status anxiety. Not just conspicuous consumption, though there is plenty of that. Rather, it’s the terror that their kids will fall behind. That if they don’t get their toddler into the right preschool, they’ll blow any chance of getting them into Harvard. So they spend ungodly sums on tuition, tutors, and enrichment activities to try to keep up with the other 1 percenters in the college admissions arms race. There’s a perverse logic to it all: the richer the 1 percent get, the higher the cost of falling out. And that’s why the “bottom of the 1 percent” in particular aren’t getting wealthier. They’re making more, but they’re also spending more on their kids.
I moved my family away from some of our old acquaintances in NYC to get away from this sort of mental illness. Not a day goes by that I’m not glad I did. My friends who are still putting up with it each day tell me stories that you wouldn’t believe.