Copyright 1998 by Robert B. Reich.



The Care and Feeding of the Rich

By Robert B. Reich

Robert B. ReichIt is reported that U.S. Airways recently removed a row of coach of seats in each wide body plane to make room for a new, luxurious business class service. The distance from row to row in the new section is 55 inches, compared with 31 inches in coach. Other airlines are similarly expanding business class, as well as first class.

The ranks of America’s affluent are growing, and the market is responding -- creating for them spaces and services far better than standard fare. But unlike the Old Monied class a century ago, whose languid extravagances created the Gilded Age, the new affluent are a business and professional elite who are in constant motion. Investment bankers, top-flight lawyers, jackpot entrepreneurs, real-estate developers, entertainment moguls: They are money rich, but time poor. Rather than spend their fortune on fox hunts or leisurely cruises, they spend it on the necessities, like flying from city to city. Yet because they have so much money to spend on what they need, and so little time to devote to anything else, the marketplace is quickly transforming their necessities into extravagances.

Airlines now get more than 22 percent of their domestic passenger revenue from the sale of first and business class seats, up from 9.5 percent in 1987, according to the Air Transport Association. That’s where the demand is, and that’s why the airlines are expanding luxury services at the front of their planes. The new elite depends on ground transportation as well, which explains the surge in limosine services and sales of luxury cars. They have to live somewhere, so the residential market is quickly shifting to luxury apartments and coops.

In this new economy, the middle class is getting squeezed, sometimes literally. As the front of the plane expands, there’s less legroom in coach class these days, and the seats are narrower. As the cost of real estate soars, the middle is squeezed out of the city. Try to find an affordable apartment in Yorkville or Brooklyn Heights, or anyplace else close in. Wherever space is limited, a larger portion of it is going upscale.

Not only does the new elite get more space. It also gets more attention. The front of the plane contains far more flight attendants per person than in coach, and they respond to “call” buttons more quickly. The airline’s V.I.P. lounge is staffed by several friendly souls who eliminate long waiting lines behind ticket counters. Limosine services answer the phones quicker than taxis, because they’re better staffed. Luxury-car dealerships have more mechanics on hand to service the cars, so shorter waits.

Increasingly, the quality that’s most sought after by the new elite is personal care. What makes an apartment truly deluxe are the custodians who respond quickly, and the doormen who take packages. What distinguishes the high-end boutiques and tony retail stores from the mass-market department stores are the abundance of salespeople who hover tactfully, and offer advice. The best hotels are characterized by platoons of obliging clerks and charming concierges. And the new elite has no shortage of specialized care: personal trainers, masseurs, physical therapists, guides, counselors, decorators, planners, and advisors. Productivity isn’t growing much in this large and expanding sector of the economy, because the quality of attentiveness gets better the more people there are to provide it.

Meanwhile the squeezed middle is getting less personal attention, in case you hadn’t noticed. As the labor market moves upscale, whatever services are still available to the middle are becoming automated and digitized. Remember when gas stations were service stations, and when telephone operators and bank tellers were real? Personal service is just too expensive for most people, these days. They’d rather get the bargain-basement air fare, without the frills. Forget the “full service” pumps. They’ll take the cheap gas.

Here’s the irony. Most of the tens of millions of personal-attention jobs created in recent years to cater to the new elite are being done by the same middle that’s being squeezed in the back of the plane and out of the city. They used to be the bank tellers, telephone operators, garage mechanics, and factory workers. Their work had benefited people like themselves, who might even have lived in their same neighborhoods. But now they’ve been pushed out of the old jobs and into new jobs whose value is measured by the quality of their attentiveness to people who live much better than they do, and better than their neighbors.

The Old Monied class of the Gilded Age had servants from the other side of town, of course, and the servants cleaned rooms and drove carriages they never could have afforded for themselves. But industrialization gradually changed all this, creating a mass market for mass-produced goods and standardized services, while building a huge middle class along the way. That was the great achievement of modern capitalism, and it strengthened our society as well as our economy. The emerging economy isn’t taking us backwards, but it does seem to be moving us toward a new kind of social divide. So long as the buoyant economy continues to lift most of the middle, no one’s complaining. But what happens when the music stops?

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The writer, professor of social and economic policy at Brandeis University’s Heller Graduate School, was Secretary of Labor in the first Clinton administration, and is Chairman of the Editorial Board of The American Prospect.


Copyright (c) 1998, Robert B. Reich. First published in The New York Times, Sunday, April 5, 1998. Readers may redistribute this article to other individuals for noncommercial use, provided that the text and this notice remain intact. This article may not be resold, reprinted, or redistributed for compensation of any kind without prior written permission from the author. If you have any questions about permissions, please contact The Electronic Policy Network at query@epn.org.


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