The 1 Percent Is An Old Boys’ Club

CREDIT: SHUTTERSTOCK
CREDIT: SHUTTERSTOCK

The good news: More women have made it into the top 1 percent of American earners. The bad news: There’s still very few of them in that club, and those who do make it in earn less.

In 2012, women made up just 11 percent of the 1 percent of top earners and 18 percent of the top 0.1 percent, according to new research from Fatih Guvenen, Greg Kaplan, and Jae Song. Past research had also found that the top 1 percent is overwhelmingly white, old, and married, but hadn’t been able to determine gender differences.

The figures on gender represent an increase from 3.3 percent and 1.9 percent between 1981 and 1985, which means a working women is more than four times as likely to reach the 0.1 percent today than back then. Yet women’s progress in breaking in has all but stalled. “[V]irtually all of the increase came in the 1980s and 1990s; the last decade has seen almost no further improvement in the last decade,” the authors write.

In short, they note, “The glass ceiling is still there, but it is thinner than it was three decades ago.”

Women at the top also can’t escape the gender wage gap, which means that for all women in the workforce they’ll make just 78 percent of what a man does working full time, year round. A man in the top 0.1 percent of male earners makes nearly three times as much as a woman at the top of female earners. That also represents an improvement, as the same man used to make four times as much as the same woman in the late 1980s. But things rare getting worse when measured another way: the gap in average earnings of men and women at the top has increased over the years. That gap is biggest when people are in their 30s, so at least some of it is likely because women shoulder most of the work of raising children. Even, it appears, among the richest of the rich.

The increase in women making it to the 1 percent is mostly because new groups of women are breaking in earlier in their lives. That’s not true among the top 0.1 percent, however, where young women haven’t made big inroads. Women have also increased their representation by stemming the flow of high-earning women who dropped out of the top 1 percent; they are now more likely to stay in the group once they get there.

Why care about whether women make it to the top 1 percent? One reason, the authors explain, is that those at the top have a lot of power over the country’s jobs, layoffs, business investments, and trade. Another is that they are “key political actors.” Indeed, the rich participate politically at two to three times the rate of the general public, and many different studies have found that the government is far more attentive to the needs of the wealthy than the needs of the less well off. One found that the average citizen has next to no influence. If women aren’t making it into this group, they’ll be left out of the corridors of power.

That will be even more problematic if income inequality keeps rising as fast as it is now. The top 10 percent of Americans took a record share of the nation’s income in 2012, more than 50 percent, and the recession has accelerated the trend that goes back to the 1970s.