The rich are not like you and I.
It’s no secret that income inequality has been growing rapidly, with most the gains in earnings accruing to just the top one percent of Americans. But who are they? A new paper from Lisa A. Keister at Duke University looks at this question and finds that “members of the one percent are disproportionately male, white, and married.” The typical one percenter is 55, compared to about 50 for the bottom 90 percent. The one percent is about 91 percent white — just 1.8 percent of these households are Hispanic and and merely 0.2 percent are black. More than half are married, versus about 30 percent for the bottom 90 percent. They are also much more likely to have a graduate degree: about 62 percent have one, compared to less than 10 percent of the bottom 90 percent.
Gender is a little harder to tease out, because the data looks at heads of households and classifies a family with a husband and wife where the husband is the head as male, so the fact that the one percent show up as about 98 percent male doesn’t mean that some rich women aren’t included. But it’s clear that few single mothers or female breadwinners are making it into this group. And we can also look at the job characteristics of the top earners to get a better sense of gender. As Mike Konczal has pointed out, the top one percent is mostly made up of executives, people who work on Wall Street, and managers. Women make up less than 15 percent of executives, while they represent 35 percent of investment banking employees and 40 percent of employees in the broader “Securities, Commodity Contracts and Other Financial Investments” category.
The 1 percent are also different in how they get their money. For the bottom 90 percent, 70 percent of our incomes from wages or salaries. But for the top 1 percent, salary accounts for just half. On the other hand, more than 30 percent of their money comes from businesses, while just 6.1 percent of the money for the bottom 90 percent is from the same source. While the 1 percent holds most of its assets in businesses, for the rest of us our houses are the most commonly held asset. The 1 percent also dominates financial assets, owning nearly 44 percent of the total financial pie, while the bottom 90 percent gets 20 percent.
And while we know that the wealthiest have been gobbling up most of the country’s income — the top 5 percent got the biggest share of income ever recorded in 2012, and the top 1 percent saw a 278 percent increase in their incomes over the last three decades while the middle saw less than a 40 percent bump — wealth concentration may be even worse. Keister’s paper finds that the 1 percent in wealth has held more than one-third of total net worth since 2001 and by 2010 had 34 percent. The bottom 90 percent, on the other hand, is left with just over a quarter of wealth. Wealth inequality is now as bad as it was during the roaring 1920s.