“Rise of the class affluent”

Mainstream economists do their best to hide it but, as it turns out, advertisers know what’s going on: in the midst of the Second Great Depression, the gap between the tiny minority of haves and the growing number of have-nots continues to grow.

Advertising Age has just released a new study, “The New Wave of Affluence” [available for $249 but a preview is available here], in which they find the United States is undergoing a “massive reset” that represents the end of “mass affluence” and the rise of a new kind of affluence, one based on a small elite receiving more than $200,000 a year in income.

The language itself is extraordinary. For example:

While the social and political effects of this inequality may be cause for concern, the accrual of wealth among the very few is also a great consequence for marketers.

A related study by Digitas, “Affluence in America: The New Consumer Landscape” [also proprietary but here's a link to the press release],

reveals that the future of affluence is not like the past, and that “mass affluence” has given way to the spending power of the truly and the up-and-coming affluent — the “Class Affluent” and the “Emerging Affluent.”

The “mass affluent” (with household incomes of $100,000 to $199,000) “don’t have the leveraged spending power they once had and now have to live on income alone.” They have been replaced by the “class affluent” (with household incomes of $200,000 to $1 million and more), which “represents the minority–only 8.5 million in a country of 307 million people.” They are thus “in a class by themselves.”

The “class affluent” are, in turn, divided into three groups:

• The Affluent — $200K–$499K HHI — The Creative Class: The Affluent are the creative class. They are likely to work in creative fields or industries, like software design, publishing, architecture, advertising, or journalism.
• The Wealthy — $499K–$999K HHI — The Money Class: Likely to work in Finance and Consulting.
• The Rich — $1 million+ HHI — The Leadership Class: They are individuals who run companies and influence industry. They command the highest incomes and make decisions that affect many. They can be found in high-income careers, like financial or legal services, or break-out industries like Internet properties/services or real estate.

Those who market luxury goods now understand what most mainstream economists spend their time trying to deny: the surplus is appropriated by and distributed to a tiny minority of the population, and the resulting “class affluent” have left everyone else behind.