1% to 3% of the American population can be characterized as upper class. The wealth of the top 1% in the United States equals the wealth of the lower 95%. There are a number of ways that people fall into this classification, wealth being the most obvious, but leaders in any profession, business, or cultural area can be characterized as upper class. Portions of the upper class are highly educated, cultured and influential. Part are simply rich with only modest personal skills and achievements. Families who have been upper class for generations display a distinctive lifestyle. Newcomers, the nouveau riche, often do not share this culture, but may through socialization in private schools and other elite institutions acquire it over time. A tiny portion of the upper class is highly influential and has an advantage as its members seek high office in government or engage in efforts to influence events. Throughout the history of the United States opportunities have arisen for the accumulation of great wealth. A portion of the current upper class consists of the descendants of those who were lucky and aggressive enough to take advantage of those opportunities. Income range: $500,000 and above
David B. Grusky (Editor) Social Stratification: Class, Race, and Gender in Sociological Perspective (2000)
Alan C. Kerckhoff; Socialization and Social Class 1972, textbook
Jim Lardner, James Lardner, David A. Smith, editors, Inequality Matters: The Growing Economic Divide In America And Its Poisonous Consequences, WW Norton (January, 2006), hardcover, 224 pages, ISBN 1565849957
Rhonda F. Levine, ed. Social Class and Stratification (1998), anthology of classic articles
W. Lloyd Warner; Marchia Meeker and Kenneth Eells; Social Class in America: A Manual of Procedure for the Measurement of Social Status 1949
Erik Olin Wright. Classe (1997) - a detailed Marxian guide to define working class/middle class etc.
Michael Zweig, Working Class Majority: America's Best Kept Secret, Cornell University Press (2001), trade paperback, 198 pages, ISBN 0801487277
David Popenoe, Sociology, (ninth edition, Prentice Hall, 1993 ISBN 0138197989 ) pb. pp. 232-236,
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The super rich, the less than 1 percent of the population who own the lion's share of the nation's wealth, go uncounted in most income distribution reports. Even those who purport to study the question regularly overlook the very wealthiest among us. For instance, the Center on Budget and Policy Priorities, relying on the latest U.S. Census Bureau data, released a report in December 1997 showing that in the last two decades "incomes of the richest fifth increased by 30 percent or nearly $27,000 after adjusting for inflation." The average income of the top 20 percent was $117,500, or almost 13 times larger than the $9,250 average income of the poorest 20 percent.
But where are the super rich? An average of $117,500 is an upper-middle income, not at all representative of a rich cohort, let alone a super rich one. All such reports about income distribution are based on U.S. Census Bureau surveys that regularly leave Big Money out of the picture. A few phone calls to the Census Bureau in Washington D.C. revealed that for years the bureau never interviewed anyone who had an income higher than $300,000. Or if interviewed, they were never recorded as above the "reportable upper limit" of $300,000, the top figure allowed by the bureau's computer program. In 1994, the bureau lifted the upper limit to $1 million. This still excludes the very richest who own the lion's share of the wealth, the hundreds of billionaires and thousands of multimillionaires who make many times more than $1 million a year. The super rich simply have been computerized out of the picture.
When asked why this procedure was used, an official said that the Census Bureau's computers could not handle higher amounts. A most improbable excuse, since once the bureau decided to raise the upper limit from $300,000 to $1 million it did so without any difficulty, and it could do so again. Another reason the official gave was "confidentiality." Given place coordinates, someone with a very high income might be identified. Furthermore, he said, high-income respondents usually understate their investment returns by about 40 to 50 percent. Finally, the official argued that since the super rich are so few, they are not likely to show up in a national sample.
But by designating the (decapitated) top 20 percent of the entire nation as the "richest" quintile, the Census Bureau is including millions of people who make as little as $70,000. If you make over $100,000, you are in the top 4 percent. Now $100,000 is a tidy sum indeed, but it's not super rich--as in Mellon, Morgan, or Murdock. The difference between Michael Eisner, Disney CEO who pocketed $565 million in 1996, and the individuals who average $9,250 is not 13 to 1--the reported spread between highest and lowest quintiles--but over 61,000 to 1.
Speaking of CEOs, much attention has been given to the top corporate managers who rake in tens of millions of dollars annually in salaries and perks. But little is said about the tens of billions that these same corporations distribute to the top investor class each year, again that invisible fraction of 1 percent of the population. Media publicity that focuses exclusively on a handful of greedy top executives conveniently avoids any exposure of the super rich as a class. In fact, reining in the CEOs who cut into the corporate take would well serve the big shareholder's interests.
Two studies that do their best to muddy our understanding of wealth, conducted respectively by the Rand Corporation and the Brookings Institution and widely reported in the major media, found that individuals typically become rich not from inheritance but by maintaining their health and working hard. Most of their savings comes from their earnings and has nothing to do with inherited family wealth, the researchers would have us believe. In typical social-science fashion, they prefigured their findings by limiting the scope of their data. Both studies failed to note that achieving a high income is itself in large part due to inherited advantages. Those coming from upper-strata households have a far better opportunity to maintain their health and develop their performance, attend superior schools, and achieve the advanced professional training, contacts, and influence needed to land the higher paying positions.
More importantly, both the Rand and Brookings studies fail to include the super rich, those who sit on immense and largely inherited fortunes. Instead, the investigators concentrate on upper-middle-class professionals and managers, most of whom earn in the $100,000 to $300,000 range--which indicates that the researchers have no idea how rich the very rich really are.
When pressed on this point, they explain that there is a shortage of data on the very rich. Being such a tiny percentage, "they're an extremely difficult part of the population to survey," pleads Rand economist James P. Smith, offering the same excuse given by the Census Bureau officials. That Smith finds the super rich difficult to survey should not cause us to overlook the fact that their existence refutes his findings about self-earned wealth. He seems to admit as much when he says, "This [study] shouldn't be taken as a statement that the Rockefellers didn't give to their kids and the Kennedys didn't give to their kids." (New York Times, July 7, 1995) Indeed, most of the really big money is inherited--and by a portion of the population that is so minuscule as to be judged statistically inaccessible.
The higher one goes up the income scale, the greater the rate of capital accumulation. Economist Paul Krugman notes that not only have the top 20 percent grown more affluent compared with everyone below, the top 5 percent have grown richer compared with the next 15 percent. The top one percent have become richer compared with the next 4 percent. And the top 0.25 percent have grown richer than the next 0.75 percent. That top 0.25 owns more wealth than the other 99¾ percent combined. It has been estimated that if children's play blocks represented $1000 each, over 98 percent of us would have incomes represented by piles of blocks that went not more than a few yards off the ground, while the top one percent would stack many times higher than the Eiffel Tower.
Marx's prediction about the growing gap between rich and poor still haunts the land--and the entire planet. The growing concentration of wealth creates still more poverty. As some few get ever richer, more people fall deeper into destitution, finding it increasingly difficult to emerge from it. The same pattern holds throughout much of the world. For years now, as the wealth of the few has been growing, the number of poor has been increasing at a faster rate than the earth's population. A rising tide sinks many boats.
To grasp the true extent of wealth and income inequality in the United States, we should stop treating the "top quintile"--the upper-middle class--as the "richest" cohort in the country. But to do that, we need to look beyond the Census Bureau's cooked statistics. We need to catch sight of that tiny, stratospheric apex that owns most of the world.
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Michael Parenti is a noted author and political commentator. Among his widely read books are "The Terrorism Trap," "Democracy For the Few," "History as Mystery," and "Against Empire." His most recent forthcoming book is "The Assassination of Julius Caesar: A People's History of Ancient Rome." For more information, visit his web site, www.michaelparenti.org
Subject: Re: wealth in the US
Answered By: katwoman-ga on 19 Apr 2002 13:03 PDT
Rated:
Hi flaco,
Although I do not have the capability to create a graph for you, I can provide
you with the information you're seeking and give you links to graphs.
Here is a summary of the statistics for the distribution of wealth in the US as
of 1998, the most recent information available that has been fully analyzed:
% of US Population % of Wealth Owned
==========================================================
Top 1% 38.1%
Top 96-99% 21.3%
Top 90-95% 11.5%
Top 80-89% 12.5%
Top 60-79% 11.9%
General 40-59% 4.5%
Bottom 40% 0.2%
These figures are based on research by New York University Economics Professor
Edward N. Wolff. In his April 2000 working paper titled "Recent Trends in
Wealth Ownership, 1983-1998", Wolff used statistics from the Surveys of
Consumer Finances to address several issues surrounding the concentration of
wealth in America.
According to Wolff's figures, about 70 percent of the wealth in the US is in
the hands of 10 percent of population. He also notes that the disparity
between the distribution of wealth rose from 1989 to 1998, although the pace of
the inequity was slower in the 1990s.
In addition to the Surveys of Consumer Finances, there are two other major
sources of data on American wealth:
The data and methodology for each of these sources varies. As a result, the
distribution statistics produced by each of these sources may also vary.
For the purposes of his analysis, Wolff defined wealth as "marketable wealth"
or "net worth," meaning the current value of all marketable assets (real
estate, cash, savings, bonds, stocks, pension plans, trust funds, etc.) minus
the current value of debts. He excluded durable goods like automobiles and
house wares and social security benefits from his definition of marketable
assets.
While researching your question I found other graphs that detail the
disparities in income. It's important to remember that although wealth and
income are strongly correlated, they are different. More factors are taken into
consideration when calculating wealth and as a result, it is probably a more
accurate indicator of how money is distributed in the US.
Here are some additional resources on wealth and income:
Unequal Income Distribution in the United States http://home.rochester.rr.com/jerryfisher/income.htm
This is based on 1995 and 1996 data. Scroll down to the bottom for information
on distribution by country
The L-Curve By David Chandler http://www.davidchandler.com/lcurve/
Based on 1997 data income. Includes easy-to-understand graphs on income
distribution
distribution of wealth in us
wealth and distribution and us
distribution of wealth and us and 1998 and stat or statistic or statistics
gini coefficient
Hope this helps,
Katwoman
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Wealth Distribution Statistics
Ownership Statistics: Why a Shared Capitalism is Needed...
Current trends in economic inequality, both domestically and abroad, pose dangers to human dignity, democracy, political stability, fiscal sustainability, social justice, freedom, civil society, physical/mental health and environmental sustainability. These dangers are palpable, real and on the rise.
These statistics are also included in the newest book by the President of the Shared Capitalism Institute, Jeff Gates. Look for Democracy at Risk: Rescuing Main Street from Wall Street — A Populist Vision for the 21st Century, published by Perseus Books in May, 2000. See the book page for more information.
Anticipated Social Security payments are now the largest single "asset" for a majority of Americans. Funded by a levy on jobs, the Social Security payroll tax is now the largest tax paid by a majority of Americans (the largest for 90 percent of GenXers), funded with a flat tax of 12.4 percent on earnings up to $72,600.
Less than one-fifth of that increase ($48.4 billion) would have been enough to bring every American up to the official poverty line, leaving each of the Forbes 400 with an average one-year increase of $534 million ($10.2 million per week).
Had the typical worker's pay risen in tandem with executive pay, the average production worker would now earn $110,000 a year and the minimum wage would be $22.08.
Compensation expert Graef Crystal identifies five CEOs who each saw their wallets widen by more than $232 million in 1998 as they exercised their stock options. For a 40-hour week, that's $116,000 per hour.
A 40-hour week at today's minimum wage of $5.15 per hour nets a pre-tax annual income of $10,300. That's $6,355.00 below the official 1998 poverty line for a family of four.
The after-tax income flowing to the middle 60 percent of households in 1999 is the lowest recorded since 1977. Among the bottom fifth of households, average after-tax income fell nine percent from 1977 to 1999.
The Census Bureau reports that the pretax median income was $1,001 higher in 1998 than in 1989. For the decade of the 1990s, that's an average annual raise, adjusted for inflation, of $111.22, or 0.3 percent.
Except for inflation adjustments, today's poverty formula remains unchanged since 1965 when it was designed by Lyndon Johnson to address severe nutritional deprivation but only if "the housewife is a careful shopper, a skillful cook and a good manager who will prepare all the family's meals at home."
The national poverty rate remains above that for any year in the 1970's.
Bill Clinton reported a 12.7 percent poverty rate in September 1999, the lowest level in a decade.
Raising the poverty threshold to $19,500 (as recommended by the Census Bureau) boosts the poverty rate to a record-high 17 percent, leaving 46 million Americans short of that minimal level.
In 1973, the United States imprisoned 350,000 people nationwide. By 1998, the prison population was 1.8 million or roughly 674 people in prison per 100,000, while Europe-wide the imprisonment rate is 60 to 100 per 100,000. Florida now spends more on corrections than on colleges. California spent nine percent of its 1998 budget on prisons as it responded to an 8-fold increase in its prison population over the past two decades. The Rand Corporation projects that California's prison spending will top 16 percent by 2005.
In 1998, 9,257 new and existing homes sold for $1 million or more, triple the number of million-dollar homes on the market in 1995. Annual mortgage interest payments on a newly purchased $1 million home total $79,247 (assuming 10 percent down and a 30-year adjustable rate mortgage at 8 percent). The home mortgage interest deduction for someone in the top 39.6-percent tax bracket saves on that house $31,382 a year in federal income taxes. When that saving is added to the $40,000 average annual tax cut allowed the top one percent since 1977, that $1 million home costs $7,865 per year, or $655 per month.
Federal tax law allows a personal income tax deduction on home mortgage interest costs up to $1 million. If that limit were reduced to $300,000, the CBO calculates that federal tax receipts would increase by $40.8 billion over nine years. In 1998, four percent of new mortgages exceeded $300,000.
If an entry-level Forbes 400 member gives away $1 million of their income, how much would a median-level household need to donate to make a similar financial sacrifice? A bit less than $60.
If the value of Bill Gates's Microsoft stock continues to grow at the same pace as it has since Microsoft's 1986 initial public offering (58.2 percent a year), Wired projects he will become a trillionaire in March 2005, at the age of 49, and his Microsoft holdings will top $1 quadrillion (one million billion) in March 2020, at the age of 64. The Gross World Product for 1998 was $39,000 billion.
With global population expanding 80 million each year, World Bank President Jim Wolfensohn cautions that, unless we address this "challenge of inclusion," 30 years hence we will have 5 billion people living on less than $2 per day.
The UNDP reports that two billion people suffer from anemia, including 55 million in industrial countries. Current trends suggest that in three decades we could inhabit a world where 3.7 billion people suffer from anemia.
The world's 200 largest corporations account for 28 percent of global economic activity while employing less than one-quarter of one percent of the global workforce.
The World Bank estimates that $100 billion to $150 billion has flowed out of the former Soviet Union since the fall of the Berlin Wall. As of July 1999, one-third of Russians were living below the official poverty line of $38 per month.
The UNDP identifies six core ingredients as minimal conditions for a decent life: safe drinking water (1.3 billion people lack access to clean water),[Note 64] adequate sanitation, sufficient nutrition, primary health care, basic education (one in seven children of primary school age is out of school),[Note 65] and family planning services for all willing couples. UNDP calculates the cost at $35 billion each year for the next 15 years. That's about what the United States spent in 1999 to maintain its nuclear readiness, a decade after the fall of the Berlin Wall. For the world community to bear the cost would require 1/7 of 1 percent of global GDP; the United States contributes to the UN 0.09 percent of its GDP.[Note 66]
In the 1997 fiscal year, the United States exported $8.3 billion of arms to non-democratic countries.
The Clinton-Gore Administration is calling for a $110 billion increase in the Pentagon budget, including a 50 percent increase in weapons procurement through 2004; Republican Congressional leaders insist on considerably more funds for military remobilization.
