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For many Americans, the economy over the past five years has been tough. Costs have soared while salaries remains flat. Elevated mortgage rates have made homeownership a dismal prospect. The unemployment rate has been slowly rising.

The majority of individuals have indicated they're putting off major life decisions, including having kids or switching jobs, because of the instability. But for a very small group of people, the past five-year period couldn't have been more prosperous.

Fortune Expansion

The assets of the world's billionaires expanded 54% in 2020, at the peak of the pandemic. And even during all the financial uncertainty, the stock market has only persisted in expanding. This increase has mostly helped just a tiny percentage of Americans: 10% of the population owns 93% of stock market wealth.

Despite the imbalance as this division seems, it's the system working as it is currently designed.

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

Mapping Economic Classes

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

To update the concept, Collins classifies these "wealth villages" based on income levels:

• At the lowest tier, Affluent Town, are the 10 million Americans who have a annual salary of at least $110,000 and an net worth of over $1.5m.
• The villages get more exclusive 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.

Altogether, the residents of these villages comprise 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 traveling in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're using a private jet. That's a really separate reality. You fly private, you have no investment in the commercial aviation system. You don't care if the whole system fails – you're set."

Ultra-Wealth Impact

The peak in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's wealthiest. The control that this group has greatly exceeds those who are simply well-off, let alone the average American who doesn't inhabit "Richistan" at all.

But Collins thinks the political catchphrase "end extreme wealth" fails to address the core issue and has a "hint of elimination" to it.

"It's the separation between personal actions and a framework of policies," Collins commented. "We should be worried about an economic system that channels so much wealth upward to the billionaires."

Fortune Building Strategies

To understand how wealth at the billionaire level works, Collins separates it into four parts: getting the wealth, protecting assets, policy control 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 starting or running a successful business, which could get them membership in Affluent Town.

But getting to Billionaireville requires substantial commitment and tactics in those next three steps. Collins describes what he calls the "asset protection sector": the tax lawyers, accountants and wealth managers who use their skills to ensure that the super rich are being calculated about their taxes.

"Wealth defense professionals use a broad range of tools such as financial instruments, international accounts, secret corporations, non-profit organizations and other mechanisms to hold assets," he explains.

Political Influence and Hyper-Extraction

To enhance a wealth defense strategy, a family needs government backing. Wealth of over $40m converts to political power, Collins says, and can be used to secure fortune and ensure continued growth.

The final phase 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 fund private companies.

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

Actual Impacts

The consequences 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 meaningful wage increases. And Collins said the suffering and anger of this kind of society can lead to serious unrest.

"The most powerful wealthy elites understand people are being excluded [and] are monetarily hurting," Collins said, adding that conservative politicians have been good at accessing a potent "false common-man appeal".

Policy Situation

The irony, Collins points out in his book, is that government officials have appointed a succession of billionaires to cabinet positions. Along with wealthy entrepreneurs who had short yet influential roles overseeing significant decreases to the federal workforce, other crucial appointments for commerce, treasury, education and the interior are also all billionaires.

This political landscape, along with help from congressional allies, helped pass significant fiscal policies, which will make enduring decreases for the wealthy and corporations.

The Path Forward

While government groups continue to argue that immigration and unfavorable commercial treaties are the source of everyone's economic problems, "the issue remains: Will the other major party, which has also been controlled by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "alter economic flow", including deep changes to the tax system, increasing the minimum wage and strengthening unions.

"It was so, so close, and the law really did represent the will of the majority of people who really want lawmakers to address some of these pressing issues," Collins said. "Wealthy influence is not about building so much as preventing. It's easier to block than it is to make something substantial take place, but the muscle memory is there. We know what that looks like."

Collins is optimistic that there can be change, but said it would require continuous government action.

"It may be before we know it that the balance shifts, and then it really is about preserving a sustained really popular movement to make progress on this profound imbalance we're living in," he said. "We can solve this. It is solvable."