Protests Target 'One Percent,' But Who Exactly Are They?
By: Jeff Cox | CNBC.com Senior Writer
They are CEOs and money managers, doctors and lawyers, as might be expected. But they are also computer technicians, scientists and even farmers. Some are singers and movie stars (even though they may not like to admit it) and the rest of them are spread among various professions.
These days they are also the most vilified members of American society – also known as the 1 Percenters, who control about two-fifths of the country’s wealth and fuel nearly 100 percent of the protests around Wall Street, through the rest of the country and around the world.
“We are the 99 percent!” is the favorite refrain of the protesters, who believe they are being cheated out of the lifestyle they deserve by the elite ruling class.
A look at who constitutes the 1 Percenters is at once instructive, disturbing and a bit surprising.
It is instructive in that the greatest number do not appear to be the bankers and traders at the center of the Occupy Wall Street movement’s ire. It is disturbing in that such a small group can control so much wealth and power. And it is a bit surprising in that while the protesters make it sound as if concentration of wealth is a relatively new phenomenon, it in fact has been pretty much this way for going on a century now.
Getting to know the 1 Percenters is no easy task. The data base is limited and even the Census does not go that deep into the weeds to break down income and profession to that extent.
The most reliable numbers are from a November 2010 paper written by researchers Jon Bakija, Adam Cole and Bradly T. Heim, using data that go back only to 2005. Obviously, the American economy has seen a tremendous disruption since then, so those findings are likely skewed.
Still, they help provide a guidepost.
According to their research, the top 1 percent of workers earn about 17 percent of the total wages.
A category called “executives, managers and supervisors (non-finance)" make up the greatest concentration in this group at 6.35 percent. Financial professionals are next at 2.77 percent, while doctors make up 1.85 percent and lawyers 1.22 percent.
The rest of the table shows a wide variety of skills, from real estate professionals to celebrities, from government workers to farmers and pilots, each comprising about 0.5 percent of the 1 Percenters.
As for what will get you in this category, the yardstick varies as well.
Broadly speaking, you need to make about $500,000 a year, though one study – from G. William Domhoff, a sociology professor at the University of California at Santa Cruz– pegged the top rung at $1.3 million a year.
CEO salaries, according to the AFL/CIO labor union, are $3.9 million overall, but $10.6 million for those whose companies are listed in the Standard & Poor’s 500 and $19.8 million for companies in the Dow Jones Industrial Average .
But figuring out who the 1 Percenters are doesn’t stop simply at salary.
There’s a difference between income – how much one makes in salary as well as dividends, interest and rents or other payments from real estate – and wealth, which is defined in “marketable assets,” such as real estate, stocks and bonds, as well as what you’ve squirreled away from your income. Your house is wealth, your car is not; your shares of Apple are wealth, your personal computer is not.
In fact, according to Domhoff, most really rich people – the 1 percent of the 1 percenters – only get 19 percent of their income from working. The rest comes from investment income.
That’s why billionaire Warren Buffett can make his claims about his secretary getting taxed at a higher rate than he does. Buffett’s wealth comes mostly from items that are taxed at a different rate than regular income.
Who Pays Taxes?
The 1 Percenters, in fact, actually pay a disproportionate amount of their incomes to taxes, something that is especially true for the 5 percenters – for whom there is an abundance of Census data but who don’t come in for as much criticism as their more elite brethren. Perhaps “We are the 95 percent!” isn’t as melodious a chant.
Economists Kyle Mudry and Justin Bryan estimate that 1 Percenters paid 40 percent of total federal personal income taxes in 2006 and the 5 Percenters paid 60 percent. (Politifact puts a finer point on the various contributionsone makes toward the tax burden and finds that 1 Percenters actually pay 28.1 percent of total federal tax dollars. The point remains that the notion that rich people don’t pay taxes is bogus.)
