Forum Post: the 1% or the .01% by paul street

strange as it might seem, the top hundredth may actually be too big a slice of the population to highlight when it comes to the question of which Americans have gained most from the nation’s highly skewed and unequal pattern of economic growth over the last three plus decades. Between 1974 and 2007, it is true, the share of U.S. income “earned” by the top U.S. income hundredth more than doubled – from 8 to 18 percent. Including capital gains, the increase goes from 9 to 24 percent, the 1%’s highest share since 1928, the eve of the stock market crash that ushered in the Great Depression. But, as political scientists Jacob Hacker and Paul Pierson noted in their important 2010 book Winner Take All Politics:

‘the top 1 percent, while seemingly an exclusive group, is much too broad a category to pinpoint the most fortunate beneficiaries of the post-1970s income explosion at the top….In terms of share of national income earned, the top 0.1 percent [the top thousandth] have seen their slice of the pie grow from 2.7 percent [in 1974] to 12.3 percent of income – a more than fourfold increase…..[and] the gains within this superrich group are themselves highly concentrated….the top 0.01 percent (the richest one in ten thousand households) have seen an even more spectacular rise. From less than $4 million in average annual incomes in 1974, the average member of this select group now earns more than $35 million. From earning less than 1 of every 100 dollars, these supremely fortunate souls now earn more than 1 of every 17 – more than 6 percent of national income accruing to 0.01 percent of families. This is the highest share of income going to this group since the data begin to be collected in 1913 [emphasis added].’ [9]

And then there’s wealth, more unequally distributed than income.[10] The United States is home to 56,860 people (0.05 % of the population) identified by the global wealth intelligence firm Wealth X as “Ultra High New Worth” (UHNW) individuals. A UHNW individual is anyone with at least $30 million in worth, “including shares in companies, real estate, cash, art collections, private planes and other invest-able assets.” At the top of the industrialized world’s most unequal country (the United States) are more than 400 billionaires. The pinnacle is held by three men – Bill Gates (net worth of $59 billion), Warren Buffett ($33 billion) and Lawrence Ellison ($33 billion) – whose combined wealth exceeded the collective, recession-inducted budget-shortfalls of every U.S. state in 2011.

The cumulative wealth of “the Forbes 400” (the 400 wealthiest Americans) is $1.54 trillion, roughly the same net worth possessed by the entire bottom half of U.S. families. Even more shocking, six Waltons – five children and one daughter-in-law of Sam and James “Bud” Walton (the founders of Wal-Mart, whose previously unimaginable profits flowed from the import of goods manufactured at super-exploitive wage levels abroad and especially in China) had a total net worth of $69.7 billion. This was equal to the total wealth of the entire bottom 30 percent of Americans.

“The 1%” versus “the 99%” dichotomy hardly captures this level of disparity.