Somewhere over a fly-over state. Forty-two thousand feet above, a business jet is cruising 420 knots Southwest.
Sipping Maojian tea parceled from China less than 48 hour after picked, checking out the marvelous scenery outside that Embraer Legacy 650, that business executive leans cozily on Hemes leather seat. Only an hour towards Palo Alto airport. With higher cruising speed, luxurious riding experience, and much more flexibility on schedule, a private jet makes executives’ life significantly easier. The conservation on time and pleasant rides surely worth 4 million dollars a year for those owners, as they are willing to pay 40 million lump-sum to purchase (Dingman). Extra 4 million per year? For 4600 private jet owners registered in the States, 0.0014% of total population, that is a true bargain!
Such a beast is different from turboprops one would see dozens in a flight assembly. Those are called “general aviation,” (GA) a general theme of American aviation culture. There are 213,050 active GA aircrafts in 2017 registered in the states. To fall in the criteria of private jet, the streamline beauty need to have a pair of jet engine, faster yet quieter than commercial aircrafts, and a large cabin. Expenditure makes every part suit the name “private.”
During a flight operated by such, there is no need at all to tolerate annoying TSA security check, no worry for blabbering neighbors or knee defender, no panic to feel disconnected attributed to AIRCELL TS3100 satellite phone and all-cover Wi-Fi. (Embraer) More importantly, it is a jet exclusively waiting for its owner for non-stop trips, the “time machine” truly connects every part of owners’ business together efficiently. (Saxon and Weber)
Yet only a minority can live such a high life. For the majority (99.9886%) who cannot afford, the presence of such ostentatious cash-burners is just another mirror to reflect inequality and turn “equality of opportunity,” a deep-rooted American value into a joke, as well as a source of envy: luxurious beyond imagination, but way too unaffordable.
Compared to civil aviation’s, the cost to ride on a private jet is not at the same level. According to a current air fare report by Elaine Glusac, a 6-hour trip from New York to Los Angeles would only cost a traveler 100 dollars attributed to COVID-19’s shock. For business class, the price is $800. While the variable cost of a private jet can be as high as 10’000 USD per hour, plus the parking fee and maintenance. Even for a typical business traveler who ride business or first class20 times annually, (Belobaba et al, 87) the total fare of their JFK—LAX roundtrip can only support a private jet to park in LAX for 42 days. (Saxon and Weber) Even for the most affluent travelers on civil aircrafts, private jets are out-of-reach.
On the same commercial aircraft, not all people’s payment can let a business jet park that long.. For American domestic flights, price of air tickets is determined by roundtrip, purchasing time, refund methods, physical seating. (Belobaba et al, 93) For trans-continent flights, Delta One (Delta’s latest first-class suite) provides Michelin-starred cuisine with classic wine, but for middle seat in economy, snores, odor, and knee defender are prevalent themes. With that, a ten-time price difference should be acceptable, though sitting on the same aircraft.
These two layers reflect current wealth allocation in American society. An exclusive niche of people dominates a significant proportion of wealth, creating a barrier with most people for privileges. Inside the majority, segmentations occur with purchasing-power and services provided differentiate times. Even so, the gap inside majority is so minor compared to the super-rich niche, that can be overlooked. According to a research by PEW Research Center, in 1989, the richest 5% of families had 114 times as much wealth as families in the second quintile, the “upper-mid class,” $2.3 million compared with $20,300.
Back to that typical flight from New York to Los Angeles. Statistically speaking, affluent civil travelers and top 5% earners may value traveling cost similar: 800 dollars and 91,200 dollars represent same proportion of their wealth. Not to mention most private jet owners earns far more than the average amount within top 5%.
It has already been a separated society, but historical data shows a worrisome trend: the more capital a person has, the faster he or she accumulates in future increasing gap between segments. From the same statistical model, the richest 5% has 248 times of wealth to “upper-mid” class in 2018, with an average annual growth rate of 4.1%, compared with 2.7% in the highest quintile. For other households, their wealth only increased 1% or barely more annually.
Speaking both in ratio and amount, the exclusive niche gobbled up equity more than twice as fast than the majority. (Beer) Just like the drastic gap of cost between operating a private jet and riding on business class.
As a result, the 90/10 ratio skyrocketed from 9.1 to 12.6, meaning the top 10% has 12.6 times the incomes of households at the bottom in 2017. (Horowitz, Igielnik, and Kochhar) Now there is little doubt on why the 4600 private jets owners can enjoy and maintain the lavish service. Unlike first-generation college students must loan money for tuition and bet their future, the super-rich people have no need to worry about a “small amount” of future spending. With a predictable revenue growth and the ability to withstand risk, they can put a larger proportion of money on investment or for leisure. (Lane)
What factors led to such a wealth and return inequality?
According to Tommy Beer from Forbes, a loop has formed. Due to various family backgrounds and affordability, a child would get different types of education. In America, the fund of public schools come from property tax. According to a field study in Minnetonka High School, Minnesota, where annual average income is between 150’000-200’000 USD, students there can elect classes and learn a foreign language, enjoying indoor training facilities and college counselling services in school. While for public school in center of Detroit, where household average annual income is below 40’000USD, basic teaching resources are lacking. (Duffin)
This difference on education leads to a gap on vocational ability. According to PEW research center, only college graduates have experienced growth in median weekly earnings since 1979 (in real terms). High school dropouts have, by contrast, seen their real median weekly earnings decline by about 22 percent. With higher rates of return and capital, this wealth difference passes along generations.
According to Vintage American Ways, “Each individual should have an equal chance for success, and the life is a race for it.” The concept emerges since Mayflower. The second important reason why immigrants have traditionally been drawn to the United States is the belief that everyone has a chance to succeed here, and it is every individual’s strive to make it.
The loop tears the society apart further, tramples on “equality of opportunity.” The rich, acquired more productive methods and education, can take this born advantage to their career and pass down to generations.
Take the current pandemic for an instance. Due to the demand shock, producers have to shut down part of their factories. (Glusac) For property owners, that resembles a partial loss of revenue stream. But for workers of low education earning a low wage, their jobs were vanished. And market power leans to the producers’ side as now the labor supply grows significantly larger than labor demand. (Beer)
As a result, the horrible social problem depicted in The Jungle by Upton Sinclair came true again. Labors had to concede for lower payroll, even unpaid leave to secure their spot, but this time, under the mature labor law, this inequality was legally consented.
Being the institution “of people, by people, for people,” government should go bat for equality of opportunity and protect the people, over 90% of which believe “our society should do what is necessary to make sure that everyone has an equal opportunity to succeed,” (Lane) Even though the statistics shows inequality passed along generations clearly, there are still 54% of the people feel “satisfied” about life as a fair game in current America. (The Opportunity Agenda) Though the loop has made opportunities lean towards one side, people choose to take their long-held belief for granted.
How can an economy class frequent traveler consider it a fair game when someone value business jet riding as “mandatory”? For government, the first step to defend this American value should be a revelation to general public and combat this trend by appropriate taxation.
Private jets bring extra advantages to the rich. Every human has 24 hours, but some amount of time is wasted, unavoidably. In terms of traveling, commercial travelers are waiting for aircrafts, while for aircraft owners, they can pay a premium to let the aircraft wait for them. (Dingman) It may sound like another example of using money to buy everything, an exclusive yet appropriate choice for business owner. Disregarding the size and passenger on board, all planes obey similar takeoff procedures in terms of time consumption. (Belobaba et al, 179)
If every aircraft uses the same service, why shouldn’t each of them charged the same? The appropriate taxing for private jets should be charged based on service rather than passenger, even at a higher rate than commercial flights as those unscheduled operations often caused delays to scheduled flights (Saxon and Weber)—consider the taxiway filled with aircrafts in the morning, 5 minutes of delay can cause up to 8’000 USD loss for a passenger riding for connection in American hub-and-spoke system (Belobaba et al, 204) Recognizing the existing inequality, government should use regulations to weaken the power of legacy.
Ironically, the truth inside this epitome of elites is the opposite. Government conspires with elites, spends federal money to satisfy those 4600 owners’ desire, fortifies their legacy, enables them to utilize a stunning amount of resources freeride on federal spending collected from every citizen. It adds to the loop and accelerate it even faster, contrary to the government’s due target.
Back to the usage of existing airport and air routes. As mentioned earlier, every aircraft occupies same time slots at airport and exact same air traffic control service when airborne. But attributed to different “types,” they are charged differently for the same service. A commercial airliner flying from New York to Miami would pay 2,015 dollars in taxes for the air routes and traffic control, (Belobaba et al, 95) but for a private jet flying nearly the same route, the number is only 236 dollars (jets.ru) In terms of cost, it is not a fair way, as traffic controllers have the same protocol for every civil aircraft flying across their region.
Nor is there any validity in terms of regulations. Commercial airliners are view as a type of national service that connects world together, which boosts globalization and brings positive externalities to society. (Belobaba, et al, 3) At the level of values, aviation industry is the perfect platform to help achieve “equality of opportunity.” The service gives people a choice to embark on a journey, to run on their race by enhancing the free flow of labors. (Vintage American ways)
While private jets can be concluded as a type of “luxury service,” whose existence is to fulfill a niche of people’s desire. (Dingman) Occupying the same type and amount of resources, the positive externalities of commercial airliners should be compensated, not freeridden. Amazingly, U.S. taxpayers subsidize private use and ownership, funding them via taxes. When calculating tax rates, both commercial and private traveler pay at the rate of 7.5%. They pay the same money as well! American taxing system use commercial airfares to calculate every travelers’ amount.
Government connived in it. The 2008 Economic Stimulus Act enables private jets buyers to take a “bonus depreciation” (Bloor) after purchasing their beast. But what behind this “ludicrous tax break” is the extra expenditure. Elite vacation destinations such as California’s Napa Valley and Colorado’s mountain resort of Aspen have consumed a disproportionate amount of federal funding for airports improvement. Though private jets do not require 4E level of wide-body standard asphalt runway, a grass-based runway and ramp owned of local flying club is far from enough. To “conserve spending,” airports of those destinations are uncapable for commercial airliners: even the lightest Embraer ERJ145 is too heavy for such a landing.
The only alternative to access is by charter flights. (Bloor) Though relatively cheaper, it could only support a small passenger flow, which heighten the average fixed cost of airport usage. (Belobaba et al, 243) This type of renovation usually discourage local flying clubs, as members have to accept this mandatory upgrade that has few extra benefits.
From various angles, private jets’ existence has become a burden for commercial travelers, even every citizen without an ostentatious jet. The balance of benefit shifts towards the rich via an intrinsic loop, and regulations put a spurt on it. How can a person win the race of life bare-foot while his opponents cruising 400 knots thirty thousand feet above?
As a scope to peek in, the industry reflects how American values have been put aside to satisfy the prestigious few, and partially explain why rich people can amass capital at a faster rate. But American value should not vanish this way. Admittedly, it can be “fair” for the wealthiest few consuming a larger amount of resources. But only given the fact that they are appropriately regulated and pay for it.
Legacy should be earned from successes, not successive and fortified by collusion.
Beer, Tommy. “Top 1% Of U.S. Households Hold 15 Times More Wealth Than Bottom 50% Combined” Forbes. Oct 8, 2020. Electronic. https://www.forbes.com/sites/tommybeer/2020/10/08/top-1-of-us-households-hold-15-times-more-wealth-than-bottom-50-combined/?sh=7b654f905179
Belobaba, Peter; Odoni, Amedeo; and Barnhart, Cynthia. The Global Air Industry. Shanghai Jiaotong University Press: 2018.7. Print
Bloor, Garreth. “The Rise of Consumption Equality.” The Library of Economics and Liberty. May 7, 2019. Electronic. https://www.econlib.org/the-rise-of-consumption-equality/
Dingman, Jeremy. “The Real Cost of Owning a Business Jet.” Honeywell Blogs. 2017 Aug. Electronic. aerospace.honeywell.com/en/learn/about-us/blogs/2017/08/the-real-cost-of-owning-a-business-jet
Duffin, Eric. “Percentage distribution of household income in the U.S. in 2019.” Statista. Nov 6, 2020. Electronic. https://www.statista.com/statistics/203183/percentage-distribution-of-household-income-in-the-us/
Glusac, Elaine. “5 Things We Know About Flying Right Now.” New York Times. Dec 3, 2020. Electronic. https://www.nytimes.com/2020/08/20/travel/airplanes-coronavirus.html
Horowitz, M. Juliana; Igielnik, Ruth; and Kochhar, Rakesh. “Trends in income and wealth inequality.” Pew Research Center. Jan 9, 2020. Electronic. https://www.pewsocialtrends.org/2020/01/09/trends-in-income-and-wealth-inequality/
Kenworthy, Lane. “Equality of opportunity.” Lanekenworthy.net. The Good Society. April 2019. Electronic. https://lanekenworthy.net/equality-of-opportunity/
Saxon, Steve and Weber, Mathieu. “A better approach to airline costs.” McKinsey & Company. July 13, 2017. Electronic. https://www.mckinsey.com/industries/travel-logistics-and-transport-infrastructure/our-insights/a-better-approach-to-airline-costs
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Site Editor. “Six Basic American Cultural Values.” Vintage American Ways. Electronic. https://vintageamericanways.com/american-values/