US sees stark wealth gap widening

Where are the millionaires?

Other areas besides New York where the wealthy live and play include San Francisco's Bay Area. It has more than 305,000 millionaires and 68 billionaires. Since 2014, the number of millionaires in the area has increased by 82 percent.

Austin, Texas, has 33,000 millionaires and 10 billionaires and is ranked as the fastest-growing US city for the wealthy. Sunny Miami has more than 35,000 millionaires and 15 billionaires. Los Angeles, Chicago, Boston and Washington, DC, also have their fair share.

While inflation has caused around a quarter of US people to admit that they often skip meals to avoid inflated grocery prices, a poll by Qualtrics for Credit Karma found, that among the other half of US citizens, life goes on almost unchanged.

The number of high-priced cruises being booked to far-flung destinations has surged, industry figures show. Estimates suggest there will be 34.7 million cruise passengers this year, up from 31.7 million passengers in 2019.

About 27 percent of all those who booked a cruise over the past two years did so for the first time, according to the Cruise Lines International Association, a trade group.

Meanwhile, those with cash continue to shop for personal luxury goods, including Chanel handbags, Rolex watches and fine jewelry.

Sales of these items are a good indicator of how the middle class to the wealthy are faring as retail analysts say that affluent luxury customers tend to be protected from inflation and other economic hardships.

Sought-after handbags by Hermes, Chanel, Louis Vuitton, Gucci, Balenciaga and Dior along with others are the drivers of the global luxury sector. They make up tens of billions of dollars per year in the market and the prices of the goods have gone up post-pandemic.

The brand Chanel, considered the epitome of French chic for the middle class and uber-wealthy, has implemented a 60 percent price increase since 2019 for its most popular bag.

A Chanel medium classic flap bag currently costs $10,800 in-store. In 2010, the same bag cost $5,800. The price rises have not stopped those who can afford it from shopping.

Even the secondhand luxury market is booming and is worth $2.6 billion in the US and $49 billion globally, Forbes reported. Sites like Fashionphile, The RealReal and eBay sell pre-loved designer items such as bags, shoes and fine jewelry at a discount.

Hazel Clark, a fashion and design studies lecturer at New York's New School, told China Daily: "I suspect that the people who pay full price for a Louis Vuitton or Balenciaga can also afford to buy the pre-loved version."

From 2019 to 2023, luxury sales overall were up by 30 percent, according to Boston-based Bain and Company. They topped $301 billion in 2019, and while there was slight turbulence amid the pandemic when sales fell, they rebounded by 2022 and sales were $387 billion.

But in what may be a sign of a slight reduction in spending, last year, there was an 8 percent decline in revenue among luxury goods makers in the US. Bain said it expected a "relatively soft personal luxury goods performance in 2024".

While the cost of a new Chanel handbag or the location of the newest eatery may be the biggest worry for some, in other areas of the country, including big cities like Los Angeles and New York and the Deep South, there is deep poverty that often affects multiple generations.

Mississippi ranks as having the population that earns the least in the US, with a median annual wage of just $37,500, according to the US Bureau of Labor Statistics, or BLS.

Arkansas, West Virginia, Louisiana, Alabama and others are also low-earning states. Yet it's important to note the cost of living in these states is lower than some big cities.

The average US citizen made $59,384 in 2023, according to BLS. But around 50 million US people who have 15 million children have incomes below $34,500 for a family of four or $17,500 for an individual, which is considered 125 percent below poverty.

Since the 1990s, the US' wealthiest families have added to their net worth, but those on the bottom have slipped into debt or "negative wealth", according to National Bureau of Economic Research data.

At least 28 percent of black households and 26 percent of Latino households had zero or negative wealth in 2019, double that of white families.

Additionally, US citizens collectively owe $1.13 trillion in credit card debt. Generation X — those between 43 and 58 years old — had the most at about $9,123 each in the third quarter of 2023, according to Experian. The average amount owed on plastic across generations was $6,501.

The strain on finances has led many on low income to change their eating habits by dining out less and cooking at home more, say fast food chains.

McDonald's saw global comparable sales growth slide for the fourth quarter in a row to 1.9 percent in April.

"(The) consumer is certainly being very discriminating in how they spend their dollars," McDonald's CEO Chris Kempczinski said on a post-earnings call. "I think it's important to recognize that all income cohorts are seeking value."

Elsewhere, Yum Brands, which owns KFC, Taco Bell and Pizza Hut, also saw weak growth. McDonald's announced a price reduction to lure cash-strapped customers back.

In June, budget chain Target said it would slash prices on 5,000 items. Meanwhile, Walgreens is also offering steep discounts. Overall, most discounts will be on groceries and general merchandise including household goods like toilet paper. For some, it can't come soon enough.

Jonathan Bonds, 40, a plumber and carpenter from Brooklyn, said the increase in food prices and other costs had left him "barely above water". Bonds told China Daily, "Food, rent, is very difficult as well as everyday costs."