Seat pricing on airplanes is the perfect analogy for the wealth gap

On the last leg of a family trip to Mexico, as I struggled to get comfortable in economy class, I looked around and realized that seat pricing on airplanes is the perfect analogy for the wealth gap in America.

It’s always been the case that people with money can buy themselves a better position in life. But the gap between those who have wealth and those who don’t is widening. Much like seating on an aircraft, the differences are stark: Up front you’re treated royally, while those in the middle and the back are often uncomfortable, getting squeezed with little room to maneuver.

“The middle class, once the economic stratum of a clear majority of American adults, has steadily contracted in the past five decades,” the Pew Research Center said in a report last year.

In analyzing government data, Pew found that the share of adults who live in middle-class households fell to 50 percent in 2021, compared with 61 percent in 1971. Yet the share of adults in the upper income tier increased to 21 percent from 14 percent during the same time frame.

It’s harder for a larger percentage of Americans to afford a college education, a home or even an automobile.

Millions of borrowers were hoping for student debt relief, but last month the Supreme Court rejected the Biden administration’s plan to forgive as much as $20,000 per borrower in loans. Whether you agree or disagree with the court’s ruling, the larger problem is the high cost of college, which has pushed more Americans to borrow to get a degree.

Biden pledges new path to student loan relief after judicial setback

Homeownership is increasingly out of reach for many people. Just 21 percent of Americans say it is a good time to buy a house, a record low, according to a recent Gallup poll. Before 2022, 50 percent or more consistently thought it was a good time to buy, Gallup said. That sentiment hit a record high of 81 percent in 2003.

“In the past two years, as housing prices have soared and the Federal Reserve has raised interest rates to try to tame inflation, houses have become less affordable for many Americans, and views of the housing market have tumbled,” Gallup said.

It’s harder to get a used car for a decent price.

The share of used vehicles that sold for less than $20,000 was 30.6 percent in the first quarter of this year, compared with 60.5 percent five years ago, according to Edmunds, a car shopping website.

New cars, once part of the American Dream, now out of reach for many

The average price of a new vehicle was $47,713 in March. Five years ago, the average was $35,794, which translates to a 33 percent spike.

The average monthly payment for a new vehicle hit a record $730 in the first quarter, compared with $656 in 2022. And 16.8 percent, or about 1 in 6 car buyers, are paying $1,000 or more a month — also an all-time high.

High vehicle prices, coupled with rising car loan rates, are pushing consumers past the edge of affordability.

If you want more personal finance advice that’s timeless, order your copy of Michelle Singletary’s Money Milestones.

Fly, and you see the wealth disparity on full display.

Even though I can and have upgraded to better seats, watching the boarding process is depressing.

Wealthier fliers — or those with enough reward-points clout to snag an upgrade — can afford to pay for first- or business-class seats, allowing them to board first, sink into wide comfort and sip water or alcohol as the masses slog to their cramped quarters.

Those with a little more money can buy seats with extra legroom.

Want a window seat? Pay up. Need an aisle seat to stretch out? That will cost you, too.

Fights ensue because people recline their seats, often making the person behind them even more uncomfortable. When you crowd people into tiny spaces with few resources, tempers flare. The same happens when lower-income communities or schools are deprived of the same amenities afforded in wealthier areas.

When I booked my flight on a major carrier, there was an up-charge for certain seats. But it didn’t come with additional leg space. It was for a better boarding position. I would be paying for the privilege of jumping ahead of other travelers. That would, in turn, allow me to snag the limited overhead bin space, because budget-conscious travelers are increasingly bringing on more luggage, in part to get out of paying to check their bags.

Black women are finding better jobs than ever. A recession could reverse that.

People make decisions every day to afford a better life. They take on too much debt to send their children to college or overextend themselves to become a homeowner.

“Since 2020, the richest 1% have captured almost two-thirds of all new wealth — nearly twice as much money as the bottom 99% of the world’s population,” according to a report this year by the international advocacy group Oxfam.

“A tax of up to 5% on the world’s multi-millionaires and billionaires could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty, and fund a global plan to end hunger,” the report said.

Think about that the next time you fly.

B.O.M. — The best of Michelle Singletary on personal finance

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Recession-proof your life: The tsunami of economic news is leading consumers, investors and would-be homeowners alike to ask whether a recession is inevitable. Regardless of the answer, there are practical steps you can take to help shield yourself from a worst-case scenario.

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Money moves for life: For a more sweeping overview of Michelle’s timeless money advice, see Michelle Singletary’s Money Milestones. The interactive package offers guidance for every life stage, whether you’re just starting out in your career to living an abundant life in retirement.

Test Yourself: Do you know where you stand financially? Take our quiz and read advice from Michelle.

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