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Suzy Khimm, Wonkblog, Washington Post: How the top 1 percent made its money in two charts

How the top 1 percent made its money in two charts
by Suzy Khimm, October 11, 2011 

You’d be in the top 1 percent of U.S. households if your income in 2010 was at least $516,633. Your net worth in 2007 was $8,232,000 or more, and your average income this year is $1,530,773. But where did the top 1 percent make its money? Two charts from Mother Jones’s Dave Gilson shed some light on the question.

The first takes a look at the occupations of the top 1 percent of incomes in 2005, as calculated in a paper by Jon Bakija, Adam Cole and Bradley T. Heim. What’s notable is that there are more non-financial-sector business executives and medical professionals in the top 1 percent of households than people who actually work in finance — the sector that’s been the most explicit target of the Occupy Wall Street protests.

In other words, it’s a more complex and heterogeneous group than the image of the 1 percent that’s been popularized by the 99 percenters. That being said, when you look at the very richest Americans — the top 0.1 percent of households by income — then business executives and financial professions do take the lion’s share, and they’ve been pulling away from the rest much faster. “We find that executives, managers, supervisors, and financial professionals account for about 60 percent of the top 0.1 percent of income earners in recent years, and can account for 70 percent of the increase in the share of national income going to the top 0.1 percent of the income distribution between 1979 and 2005,” the paper’s authors write.

And the vast majority of the wealth held by the top 1 percent doesn’t come from income, but from stocks, securities, business equity and other investments. Edward Wolff, an economist at Bard College, examined the proportion of assets held by the top 1 percent in 2007, those whose minimum net worth was $8,232,000 or more.

Mother Jones has more charts on the 1 percent here and income inequality here.


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