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Among countless individuals in the United States, the economy over the recent five-year span has been difficult. Costs have escalated while salaries remains unchanged. Elevated mortgage rates have made buying a home a grim prospect. The rate of unemployment has been gradually increasing.

The majority of individuals have indicated they're putting off major life decisions, including raising children or moving to new employment, because of economic uncertainty. But for a very small group of people, the past five-year period couldn't have been more prosperous.

The Billionaire Boom

The fortune of the world's billionaires grew 54% in 2020, at the climax of the pandemic. And even amid all the market volatility, the stock market has only kept rising. This expansion has largely benefited just a limited group of Americans: 10% of the population owns 93% of stock market wealth.

Despite the imbalance as this allocation seems, it's the system working as it is presently configured.

"Rich elites have bought their jets, they've acquired their multiple houses and mansions, but now they're securing senators and media outlets," explained economic inequality analyst Chuck Collins. "We're now stepping into this other chapter of extreme wealth extraction where the wealthy are exploiting the system of inequality."

Analyzing Income Brackets

To help others grasp what exactly it means to be "affluent" in the US, Collins borrows a concept from journalist Robert Frank who, in a 2007 book on the rich, imagined the different levels of wealth as "Affluencia" villages: Wealth Borough, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To update the concept, Collins organizes these "affluence districts" based on income levels:

• At the lowest tier, Affluent Town, are the 10 million Americans who have a household income of at least $110,000 and an total assets of over $1.5m.
• The villages get more select as wealth goes up: Lower Richistan has 2.6 million households who have wealth between $6m and $13m.
• Middle Richistan has 1.3 million households who have assets worth an average of $37m.
• Upper Richistan, made up of 130,000 Americans (roughly the size of a small city) has between $60m to $1bn in wealth.

In total, the residents of these villages constitute the top 10% of the wealth income distribution, about 14 million Americans altogether, though their experiences vary dramatically.

"You could be in Lower Richistan, and you're still sitting in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're traveling via a private jet. That's a really different cultural experience. You fly private, you have no stakes in the commercial aviation system. You don't care if the whole system collapses – you're set."

Ultra-Wealth Impact

The summit in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's richest. The power that this group has substantially outweighs those who are simply affluent, let alone the typical citizen who doesn't live in "Richistan" at all.

But Collins thinks the activist mantra "end extreme wealth" doesn't capture the real problem and has a "whiff of exterminism" to it.

"It's the distinction between private conduct and a structure of regulations," Collins explained. "We should be focused on an economic system that funnels so much wealth upward to the billionaires."

Wealth Accumulation Mechanisms

To understand how wealth at the billionaire level works, Collins separates it into four parts: acquiring fortune, defending the wealth, government influence and hyper-extraction.

When many Americans think about wealth, they usually think exclusively about the first step, Collins said. People can create a modest amount of wealth through creating or operating a successful business, which could get them membership in Affluent Town.

But getting to Billionaireville requires significant resources and strategy in those next three steps. Collins describes what he calls the "wealth defense industry": the tax lawyers, accountants and wealth managers who use their skills to ensure that the super rich are being strategic about their taxes.

"Wealth defense professionals use a broad range of tools such as legal entities, foreign deposits, anonymous shell companies, charitable foundations and other methods to hold assets," he details.

Government Power and Extreme Wealth Removal

To further a wealth defense strategy, a family needs government backing. Wealth of over $40m converts to political power, Collins says, and can be used to defend wealth and maintain expansion.

The last stage is a different kind of wealth accumulation, one that Collins calls "hyper extraction" to describe how the wealthy have come to affect nearly every single part of an Americans' routine activities largely through capital management, which allows wealthy individuals to invest in private companies.

"Private equity is searching for those corners of the economy where they can squeeze things a little bit harder," Collins said. "One thing I don't think people comprehend is these billionaire private-equity funds are what happens when so much wealth is accumulated in so few hands, and they can essentially pivot and say, 'Where else can we generate returns out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can boost their expenses."

Tangible Effects

The results of this inequality go beyond the wealth getting wealthier. It's about people spending additional funds for their healthcare, rent and vet bills without seeing any meaningful wage increases. And Collins said the suffering and anger of this kind of society can lead to serious unrest.

"The most powerful affluent rulers understand people are being left behind [and] are financially struggling," Collins said, adding that conservative politicians have been good at tapping into a potent "fake grassroots movement".

Policy Situation

The contradiction, Collins points out in his book, is that political leaders have appointed a series of billionaires to administrative posts. Along with tech billionaires who had short yet influential roles overseeing massive cuts to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This political landscape, along with help from legislative supporters, helped pass significant fiscal policies, which will make lasting reductions for the wealthy and corporations.

Future Solutions

While government groups continue to argue that foreign entry and bad trade agreements are the source of everyone's economic problems, "the question becomes: Will the alternative political group, which has also been influenced by the billionaires and big money, be able to effectively tackle the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "change wealth distribution", including significant reforms to the tax system, boosting the minimum wage and empowering worker groups.

"It was so, so close, and the legislation really did represent the will of the bulk of people who really want lawmakers to fix some of these critical challenges," Collins said. "Oligarchic power is not about developing so much as stopping. It's easier to block than it is to make something substantial take place, but the institutional knowledge is there. We know what that looks like."

Collins is hopeful that there can be change, but said it would require sustained political momentum.

"It may be sooner than expected that the balance shifts, and then it really is about sustaining a continuous public campaign to make progress on this profound imbalance we're living in," he said. "We can address this. It is solvable."