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To numerous individuals in the United States, the economic climate over the past five years has been tough. Costs have escalated while wages remains unchanged. Elevated mortgage rates have made homeownership a dismal prospect. The rate of unemployment has been creeping up.

The majority of individuals have stated they're postponing major life decisions, including raising children or moving to new employment, because of financial volatility. But for a very small group of people, the past five-year period couldn't have been any better.

Wealth Explosion

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

Despite the imbalance as this distribution seems, it's the economic framework working as it is presently configured.

"Affluent individuals have acquired their jets, they've bought their multiple houses and mansions, but now they're securing senators and media outlets," explained inequality researcher Chuck Collins. "We're now entering this other chapter of extreme wealth extraction where the wealthy are preying on the system of inequality."

Mapping Economic Classes

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

To update the concept, Collins organizes 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 overall wealth 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 sitting in the coach section of a commercial plane," Collins explained. "Whereas in Upper Richistan, you're flying in 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."

The Billionaireville Effect

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 greatly exceeds those who are simply well-off, let alone the ordinary person who doesn't reside in "Richistan" at all.

But Collins thinks the activist mantra "billionaires shouldn't exist" doesn't capture the real problem and has a "hint of elimination" to it.

"It's the difference between personal actions and a structure of regulations," Collins said. "We should be concerned 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 breaks it down into four parts: getting the wealth, protecting assets, government influence and maximum resource extraction.

When many Americans think about wealth, they usually think solely about the first step, Collins said. People can create a reasonable quantity of wealth through starting or running a successful business, which could get them residency in Affluent Town.

But getting to Billionaireville requires substantial commitment 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 knowledge 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, offshore bank accounts, anonymous shell companies, charitable foundations and other vehicles to hold assets," he details.

Political Influence and Hyper-Extraction

To enhance a wealth defense strategy, a family needs policy assistance. Wealth of over $40m translates to political power, Collins says, and can be used to defend wealth and ensure continued growth.

The ultimate step is a different kind of wealth accumulation, one that Collins calls "maximum taking" to describe how the wealthy have come to touch nearly every single part of an Americans' routine activities largely through private equity, which allows wealthy individuals to support private companies.

"Private equity is seeking those sectors of the economy where they can increase profits a little bit harder," Collins said. "One thing I don't think people realize 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 results of this inequality go beyond the wealth getting wealthier. It's about people paying more for their healthcare, rent and vet bills without seeing any significant salary growth. And Collins said the hardship and discontent of this kind of society can lead to deep discontent.

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

Government Truth

The paradox, Collins points out in his book, is that elected representatives have appointed a string of billionaires to government roles. Along with wealthy entrepreneurs who had brief but powerful roles overseeing massive cuts to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from congressional allies, helped pass significant fiscal policies, which will make lasting reductions for the wealthy and corporations.

Future Solutions

While legislative bodies continue to argue that immigration and bad trade agreements are the source of everyone's economic problems, "the challenge is: Will the opposing party, which has also been controlled by the billionaires and big money, be able to effectively tackle 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, increasing the minimum wage and empowering worker groups.

"It was so, so close, and the bill really did reflect the will of the bulk of people who really want lawmakers to address some of these critical challenges," Collins said. "Wealthy influence is not about developing so much as stopping. 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 positive that there can be change, but said it would require continuous government action.

"It may be before we know it that the pendulum swings back, and then it really is about preserving a ongoing grassroots effort to make progress on this profound imbalance we're living in," he said. "We can fix this. It is addressable."