The top 1% of American households owned $25 trillion in 2016. That's nearly 30% of the nation's household wealth. And it's $7 trillion more than the entire middle class owned that same year.
Many of the Democratic candidates for president are proposing reigning in the power and wealth of the nation's richest individuals.
But billionaires also invest in the tangible world around us. They build hospitals and schools. They put their names on infrastructure and major developments, and make decisions with their dollars that impact our nation and state.
So how have billionaires influenced cities in Michigan and beyond? And what are the benefits and drawbacks of that influence?
To answer that question, Stateside spoke with Darrell West, author of Billionaires: Reflections on the Upper Crust, which explores the ultra-wealthy's complex role in society. West is also vice president and director of Governance Studies at the Brookings Institution.
Billionaires, West says, tend to socialize with other wealthy individuals. They gather at private clubs and elite universities. They enroll their children in private schools and take private or corporate jets, which further removes them from the general public.
“The thing that has happened in the United States is what we call 'sorting,' in which people have sorted themselves out by income level, by education, and a variety of other things,” West explained.
West says that many billionaires do donate significant money to nonprofit organizations and civic institutions in their cities. But those donations rarely come without strings attached. Instead, West says, billionaires tend to use their philanthropy to push an agenda or their own vision for society. Still, money from wealthy donors is increasingly critical to those organizations' functions.
“They are certainly becoming more reliant on those types of dollars, and therefore more subject to the whims of the wealthy. Whether that whim happens to be good or bad, broad-minded or narrow-minded, local communities are much more dependent on the wealthy for needed services,” West said.
There are only several hundred billionaires in the country, but they've had an outsized influence on many U.S. cities. Take for example Dan Gilbert, founder of Quicken Loans, who has invested heavily in Detroit.
We talked to Branden Snyder, executive director of Good Jobs Now, and Robin Boyle, professor of urban planning at Wayne State University, about what that's meant for the city.
Both Boyle and Snyder say that Detroit’s billionaire pool has been growing in the past 10 years along with the city. That has brought much-needed investment and jobs to the city, says Boyle. He points to the fact that today, Gilbert-owned companies are the largest employer in the city of Detroit.
But Snyder says it's important to look at who is reaping the benefits of Gilbert's investments.
“Folks that are native Detroiters, people who are black and brown, people who are lower-income, many of the folks specifically, people who have felony backgrounds aren’t employed into the Bedrock Family businesses,” said Snyder. “So while we have this development and this creation of jobs, what we have is this development that is unequal and tenuous at best.”
Boyle pushed back on this point, saying that Gilbert’s internship program helps build the foundation for young workers from all backgrounds to return to the metropolitan area.
Both agree that big investors who receive tax breaks from the city have an obligation to make sure that members of the local community are getting something out of that investment. That includes participating in what's known as a community benefits model, which requires companies getting tax breaks to employ a certain number of local residents.