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To numerous individuals in the United States, the economy over the past five years has been challenging. Costs have soared while wages remains stagnant. High mortgage rates have made buying a home a dismal prospect. The rate of unemployment has been gradually increasing.

Most people have indicated they're putting off major life decisions, including having kids or switching jobs, because of financial volatility. But for a very small group of people, the last five years couldn't have been any better.

The Billionaire Boom

The wealth of the world's billionaires increased 54% in 2020, at the height of the pandemic. And even throughout all the market volatility, the stock market has only kept rising. This increase has mostly helped just a small number of Americans: 10% of the population owns 93% of stock market wealth.

However unequal as this allocation seems, it's the financial structure working as it is currently designed.

"Affluent individuals have bought their jets, they've purchased their multiple houses and mansions, but now they're acquiring senators and media outlets," explained inequality researcher Chuck Collins. "We're now stepping into this other chapter of maximum resource removal where the wealthy are taking advantage of the system of inequality."

Analyzing Income Brackets

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

To contemporize the concept, Collins categorizes these "affluence districts" based on income levels:

• At the lowest tier, Affluent Town, are the 10 million Americans who have a family earnings of at least $110,000 and an overall wealth 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.

Collectively, the residents of these villages comprise the top 10% of the wealth income distribution, about 14 million Americans altogether, though their lifestyles vary dramatically.

"You could be in Lower Richistan, and you're still traveling in the coach section of a commercial plane," Collins explained. "Whereas in Upper Richistan, you're traveling via a private jet. That's a really distinct lifestyle. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system shuts down – you're set."

Ultra-Wealth Impact

The highest hill 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 far surpasses those who are simply affluent, let alone the average American who doesn't reside in "Richistan" at all.

But Collins thinks the activist mantra "billionaires shouldn't exist" misses the point and has a "suggestion of eradication" to it.

"It's the difference between individual behaviors and a system of rules," Collins explained. "We should be worried about an economic system that channels so much wealth upward to the billionaires."

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins breaks it down into four parts: accumulating assets, protecting assets, government influence and hyper-extraction.

When many Americans think about wealth, they usually think solely about the first step, Collins said. People can create a limited sum of wealth through creating or operating a successful business, which could get them residency 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 expertise to ensure that the super rich are being calculated about their taxes.

"Wealth defense professionals use a broad range of tools such as trusts, offshore bank accounts, anonymous shell companies, philanthropic entities and other mechanisms to hold assets," he writes.

Government Power and Extreme Wealth Removal

To enhance a wealth defense strategy, a family needs political support. Wealth of over $40m becomes 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 "extreme removal" to describe how the wealthy have come to affect nearly every single part of an Americans' daily existence largely through investment firms, which allows wealthy individuals to fund private companies.

"Private equity is looking for those areas of the economy where they can increase profits 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 stored 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 increase their costs."

The Real Consequences

The results of this inequality go beyond the wealth getting wealthier. It's about people facing higher costs for their healthcare, rent and vet bills without seeing any substantial income improvement. And Collins said the suffering and anger of this kind of society can lead to profound dissatisfaction.

"The most powerful affluent rulers understand people are being excluded [and] are monetarily hurting," Collins said, adding that conservative politicians have been good at connecting with a potent "fake grassroots movement".

Political Reality

The contradiction, Collins points out in his book, is that political leaders have appointed a succession of billionaires to government roles. Along with wealthy entrepreneurs who had temporary but significant roles overseeing significant decreases to the federal workforce, other crucial appointments for commerce, treasury, education and the interior are also all billionaires.

This government structure, along with help from congressional allies, helped pass significant fiscal policies, which will make permanent tax cuts for the wealthy and corporations.

Potential Changes

While legislative bodies continue to argue that border policies and unfavorable commercial treaties are the source of everyone's economic problems, "the challenge is: Will the other major party, which has also been captured by the billionaires and big money, be able to meaningfully address the underlying harms?" Collins said.

Left-leaning officials, he argues, know what policies are needed to "alter economic flow", including substantial modifications to the tax system, raising the minimum wage and supporting labor organizations.

"It was so, so close, and the bill really did embody the will of the most of people who really want lawmakers to address some of these pressing issues," Collins said. "Elite control is not about creating so much as stopping. It's easier to block than it is to make something meaningful happen, but the historical precedent is there. We know what that looks like."

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

"It may be quickly that the tide turns, and then it really is about maintaining a continuous public campaign to make progress on this severe disparity we're living in," he said. "We can solve this. It is solvable."