Sometimes referred to by marketers as the “mass affluent,” the new rich make up roughly 25 million U.S. households and account for nearly 40 percent of total U.S. consumer spending.
While paychecks shrank for most Americans after the 2007-2009 recession, theirs held steady or edged higher. In 2012, the top 20 percent of U.S. households took home a record 51 percent of the nation’s income. The median income of this group is more than $150,000.
Once concentrated in the old-money enclaves of the Northeast, the new rich are now spread across the U.S., mostly in bigger cities and their suburbs. They include Washington, D.C.; Boston, Los Angeles, New York, San Francisco and Seattle. By race, whites are three times more likely to reach affluence than nonwhites.
Paul F. Nunes, managing director at Accenture’s Institute for High Performance and Research, calls this group “the new power brokers of consumption.” Because they spend just 60 percent of their before-tax income, often setting the rest aside for retirement or investing, he says their capacity to spend more will be important to a U.S. economic recovery.
In Miami, developers are betting on a growing luxury market, building higher-end malls featuring Cartier, Armani and Louis Vuitton and hoping to expand on South Florida’s Bal Harbour, a favored hideaway of the rich.
“It’s not that I don’t have money. It’s more like I don’t have time,” said Deborah Sponder, 57, walking her dog Ava recently along Miami’s blossoming Design District. She was headed to one of her two art galleries — this one between the Emilio Pucci and Cartier stores and close to the Louis Vuitton and Hermes storefronts.
But Sponder says she doesn’t consider her income of $250,000 as upper class, noting that she is paying college tuition for her three children. “Between rent, schooling and everything — it comes in and goes out.”
Both Democrats and Republicans are awakening to the political realities presented by this new demographic bubble.
Traditionally Republican, the group makes up more than 1 in 4 voters and is now more politically divided, better educated and less white and male than in the past, according to Election Day exit polls dating to the 1970s.
Sixty-nine percent of upper-income voters backed Republican Ronald Reagan and his supply-side economics of tax cuts in 1984. By 2008, Democrat Barack Obama had split their vote evenly, 49-49.
In 2012, Obama lost the group, with 54 percent backing Republican Mitt Romney.
“For the Democrats’ part, traditional economic populism is poorly suited for affluent professionals,” says Alan Abramowitz, an Emory University professor who specializes in political polarization.
The new rich includes Robert Kane, 39, of Colorado Springs, Colo.
A former stockbroker who once owned three houses and voted steadfastly Republican, Kane says he was humbled after the 2008 financial meltdown, which he says exposed Wall Street’s excesses. Now a senior vice president for a private equity firm specializing in the marijuana business, Kane says he’s concerned about upward mobility for the poor and calls wealthy politicians such as Romney “out of touch.”
But Kane, now a registered independent, draws the line when it comes to higher taxes. “A dollar is best in your hand rather than the government’s,” he says.
Associated Press Director of Polling Jennifer Agiesta, News Survey Specialist Dennis Junius, and writers Suzette Laboy in Miami and Kristen Wyatt in Denver contributed to this report.
An interactive showing changes in electoral composition since 1972 by income and other demographic characteristics: http://hosted.ap.org/interactives/2013/voting-trends