Anatomy of the 1%
Compared to the tycoons in the last period of rapidly rising inequality before the Great Depression, today’s rich are more likely to get fat salaries, bonuses and stock options as top executives or hedge fund operators rather than collecting dividends and interest payments, according to University of California, Berkeley economist Emanuel Saez. But in recent years, the Congressional Budget Office (CBO) reports, capital gains-distinct both from salaries and from dividends and interest-fueled the surge of the very rich.
Operating in a newly globalized and financialized economy, the 1% nearly matched their Jazz Age predecessors in taking a disproportionate share of national income. From 1979 to 2007 (before the stock and housing markets crashed), the 1% more than doubled their income share to take 23.5 percent of U.S. income. In other words, the average income of the top percentile nearly quadrupled (up 275 percent), according to the CBO, while average household incomes rose only 37 percent for the three-fifths in the middle and 18 percent for the poorest 20 percent. The 1%’s piece of the pie grew so quickly because from 1993 to 2007 it captured more than half of all income growth.
And looking at the rich in terms of total wealth rather than income, a household needed $9 million in assets to be among the wealthiest 1 percent in 2007, according to New York University economist Edward Wolff.
The most common occupation in the 1% is non-financial corporate executive (31 percent), followed by doctors (16 percent), financial executives (14 percent) and lawyers (8.4 percent). Critics of the Occupy movement have used the reported variety of occupations among the 1%-including farmers, scientists, pilots, and, most widely publicized, arts and sports stars-to argue that the focus on Wall Street is misplaced. But these occupations make up a small, declining share of the 1%. Since 1979, the number of sports and entertainment figures in the 1% has dropped by half.