Follow by Email

Wednesday, November 2, 2011

Who are the 1%?

The answer seems to be nobody really knows.  But here are some figures:

Numbers from Suzy Khimm in the Oct. 6, 2011Washington post:

By household income:  Any household with total income greater than or equal to $516,633 (2010) (in in 2010 (in 2007 it peaked at $646,195) (adjusted for 2011 dollars, according to calculations by the Tax Policy Center).  This is the minimum; the average income is $1,530,773 (note that "average" income, as Nassim Taleb has explained, is not a particularly helpful concept (unlike, e.g. average height).  When Bill Gates walks into a room, the average person in that room becomes a billionaire).  According to CNN, IRS figures say the top 1% floor for adjusted gross income was $343,927.

By net worth:   average of $14 million in 2009 (per a 2011 report from the Economic Policy Institute) (peaked at $19.2 million in 2007) (not clear if 2011 dollars).  As mentioned above, "average" net worth is not a helpful concept; we'd be much more interested in knowing what the minimum net worth is.  Interestingly, Khimm's post as it reads today is already corrected to fix a misconception about floor vs. average.  But it's still not as helpful as it could be.

By profession:  David Brooks's column today gives the following for top 1% of "earners" (all prefaced by "about"):

31% "started or manage nonfinancial businesses"
16% doctors
14% "in finance"
8% lawyers
5% engineers
2% sports, entertainment or the media.

That adds up to 76% -- one might well ask who are the other 24% (of the top 1%).  I wonder if it's "earnings" off of inherited wealth?  That would be pretty shocking.

Brooks's numbers are consistent with numbers reported in the above-referenced CNN article:

"A separate study found that financial professionals made up about 14% of the top rank in 2005.
Executives, managers and supervisors working outside of finance accounted for 31%, the largest share, according to an analysis by Jon Bakija of Williams College, Adam Cole of the Treasury Department and Bradley Heim of Indiana University. Medical professionals came in at 15.7%, while lawyers made up 8.4%."

So the numbers apparently come from different sources, and people have been lumping them together.  

No comments:

Post a Comment