Who are the 1 percent?

Posted by Suzy Khimm at 11:13 AM ET, 10/06/2011

This post has been updated.

Occupy Wall Street says their movement represent the “99 percent” of Americans who’ve been left behind, while a tiny minority of wealthy earners pull ahead. So who are the 1 percenters?

(SOURCE: REUTERS )Taken literally, the top 1 percent of American households had a minimum income of $516,633 in 2010 — a figure that includes wages, government transfers and money from capital gains, dividends and other investment income.

That number is down from peak of $646,195 in 2007, before the economic crisis hit, all adjusted to 2011 dollars, according tocalculations by the Tax Policy Center. By contrast, the bottom 60 percent earned a maximum of $59,154 in 2010, the bottom 40 percent earned a max of $33,870, while the bottom 20 percent earned just $16,961 at maximum. As Annie Lowrey points out, that gap has grown wider over time: “The top 1 percent of households took a bigger share of overall income in 2007 than they did at any time since 1928.” (And in New York City, it’s even more skewed: the top 1 percent have an averageof $3.7 million in income.)

When you look at the disparity in net worth, things look even more skewed. Wealthier Americans have assets — in home equity, stocks and other investments — that generally outstrip their cash income. Average wealth of the top 1 percent was almost $14 million in 2009, according to a 2011 report from the Economic Policy Institute. That’s down from a peak of $19.2 million in 2007.

By contrast, the poorest households were experiencing declines in net worth even before the recession hit. In 2007, the bottom 20 percent of households had an average (negative!) net worth of –$13,800 in 2007, which fell further to –$27,200 in 2009. Altogether, “average wealth of the bottom 80 percent was just $62,900 in 2009 — a dropoff of $40,900 from 2007,” EPI writes. That means the wealthiest 1 percent held an average of 225 times the wealth of the average median household in 2009 — a ratio that was 125 in 1962.

Interestingly, just as Occupy Wall Street is bringing their grievances about this growing gap to a broader public, the Democratic Party is re-adjusting it’s definition of “rich.” As my colleague Lori Montgomeryreports, Senate Democrats have ditched President Obama’s plan to raise taxes on households who have more than $250,000 a year for a proposal to tax those who earn more than $1 million a year. Those who have a household income of $250,000 wouldn’t fall in the top 1 percent. But those who have incomes of more than $1 million would — at least outside New York City.

*Update: This post was updated to clarify that the second and third paragraphs describe income floors — the mininum amount at different percentiles — not average income. The average income of the top 1 percent of US households in 2011 is $1,530,773, while the average income of the bottom 20 percent is $9,187, and the median income is $65,357, according to Jim Nunns, a senior fellow at the Urban Institute.

Check out the Comment, they are quite extraordinary

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Charts: 6 Big Economic Myths, Debunked

Do taxes really kill growth? Was the stimulus a joke? No, and we have the numbers to prove it.

By Kevin Drum and Dave Gilson | November/December 2011 Issue

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Do taxes really kill growth? Was the stimulus a joke? No, and we have the numbers to prove it.

Kevin Drum [1]

Dave Gilson [2]

Like these charts? See the full context [3], or check out these 12 charts [4] exposing the dirty secrets of the jobless recovery. Plus: Why are Republicans determined to snuff the recovery? [5]

When you turn on the TV, all you hear are the same pack of talking heads delivering the same manufactured economic sound bites: taxing the rich kills jobs, the stimulus failed, the deficit is out of control. These zombie talking points aren't just wrong; they're dangerous. If we're ever going to revive the economy, we've got to tackle them head on. Here are six of the worst.
Myth #1  The Stimulus Failed
Everyone from the nonpartisan Congressional Budget Office [6] (PDF) to private-sector forecasting firms [7] have concluded that the 2009 stimulus package increased economic growth, reduced unemployment, and put millions of people back to work. It just wasn't big enough, or long-lasting enough.

Bust or Boost?

Myth #2: The Deficit is our Biggest Problem right now?
It's true that we need to address our long-term deficit problem—a problem almost entirely due to Medicare and other health care expenditures. But that's in the long term. Right now, our problem is a sluggish economy and too many people out of work. And let's not forget that the Bush tax cuts, not stimulus spending, will also fuel deficits for the foreseeable future.

The Bush Effect

    Only an Idiot Turns Down Free Money

The real answer to future deficits is to spend money now to get the economy growing again. Yields on federal bonds are at record lows. That means, as University of California-Berkeley economist J. Bradford DeLong has calculated, that the government could inject a big stimulus into the economy at an unbeatably low price: Spend $1 trillion but (because of low interest rates and the tax revenue from a faster-growing economy) borrow only $400 billion. Act now!
Myth #3: Lower Taxes are the best way to grow the economy
No one likes paying higher taxes. But do lower taxes actually spur economic growth?Bruce Bartlett [8], an economist in the Reagan administration, has compared tax rates in various rich countries in 1979 to each country's growth rate since then. His conclusion? There's virtually no correlation. Recent US history [9] backs this up too.

If a Tax Rate Falls...

Will the Economy Notice?

Myth#4: Regulatory uncertainty is clogging the Economy
In its most recent quarterly survey [10] (PDF) of small-business trends, the National Federation of Independent Business reports that sales—i.e., lack of demand—is the No. 1 concern, beating out taxes, regulations, inflation, and everything else. This is backed up by another survey by the Small Business Majority [11], in which nearly half of respondents said economic uncertainty was one of their business' top problems; 13 percent said regulation.

The Bottom Line Is the Bottom Line

Myth#5: Obama is debasing the Dollar.
There's just no basis to the claim that Obama has debased the currency. And that's unfortunate. As economist Dean Baker [12] is fond of pointing out, if we want to get our national savings rate up and our long-term budget deficit down, there's only one way to do it: by fixing our massive trade deficit. We have to import less and export more, and one way to make that happen is with a weaker dollar. A weaker dollar makes foreign goods more expensive, so we'll buy less of them, and makes American goods cheaper, so others will buy more of them.

Bad News for Tourists...

Is a Holiday for Manufacturers

Myth#6: If you unshackle the rich, they'll rev up the Economy
Think of this as the supermyth—the one underlying so many other fallacies. But here's a pesky fact neither corporate America nor the GOP establishment is trumpeting: After-tax corporate profits are currently at an all-time high [13]. The problem businesses face isn't lack of cash but rather a lack of confidence [14] that consumer demand will pick up in the future. So they're not expanding or hiring at the rate they should be.

Wall Street's Gain...

Main Street's Pain

 

 

Sources

Impact of stimulus:Congressional Budget Office [6] (PDF)

Source of deficit: Center on Budget and Policy Priorities [15]

Cost of government spending: Prof. Bradford DeLong [16], Treasury Department [17]

Effective tax rates: Remapping Debate [18], The Tax Foundation [19] 

Change in GDP: Bureau of Economic Analysis [20] 

Small-business survey: National Foundation of Independent Business [10] (PDF) 

Exchange value of dollar: Federal Reserve [21] 

US exports: Bureau of Economic Analysis [22] 

Corporate profits: Bureau of Economic Analysis [23] 

Unemployement rate: Bureau of Labor Statistics [24]
Further Reading

• Class Warfare: 11 Must-See Charts on What's Wrong With America

  The richest 10 percent control 2/3 of Americans' net worth.

• Overworked America: 12 Charts That Will Make Your Blood Boil

  Why "efficiency" and "productivity" really mean more profits for corporations and less sanity for you.

• The 1 Percent Creates Jobs…

  And five other myths that must die for our economy to live.

• Chart of the Day: Regulations, Still Not Job-Killing

• Do Regulations Really Kill Jobs? Not So Much.

Charts: Who Are the 1 Percent?

→ Corporations, Economy, Top Stories

—By Dave Gilson

| Mon Oct. 10, 2011 2:39 PM PDT

Ian Munnings/Flickr

Occupy Wall Street has focused national attention on the vast majority of Americans who have been left behind by the economic growth of the past few decades. But if OWS is the voice of the 99 percent, who exactly are the 1 percent?

A quick look at the numbers reveals that they aren't all bailed-out Wall Street execs or brokers pulling down fat bonuses. That's just some of them:

Even though the richest 1 percent of Americans don't all work on Wall Street, they do control a disproportionate amount of its wealth, including nearly half of all stocks and mutual funds and more than 60 percent of securities.

But you can't beat this chart for the most dramatic measure of just how wide the gap between the tippy-top and the 99 percent has become. While incomes for the superrich have skyrocketed in the past three decades, most Americans' have flatlined. 

ALSO: Check out our charts on income inequality, overworked America. 

Sources: Occupations of top 1 percent: John Bakija, Williams College(PDF); asset ownership: Edward N. Wolff, Bard College (PDF); income growth: The World Top Incomes Database

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