You don't even have to make a million dollars or even a half million a year to hit the top 1%. If you can hit $380k per year people will camp out in parks to protest your existence. Is that cool or what?
The range of wealth in the 1 percent is vast — from households that bring in $380,000 a year, according to census data, up to billionaires like Warren E. Buffett and Bill Gates.
Surgeons can reach the top 1%. So can, say, owners of big car dealerships. The top 1% is just not that exclusive. How disappointing.
On the other hand, most people don't know that the top 1% starts at $380k. So if you can reach the $380k threshold you can brag to people that you make enough to be in the top 1% and then decline to state just how much you make.
Of course, earning in the top 1% isn't the same as owning in the top 1%. But most people excited about Occupy Wall Street are going to miss that distinction too. If you want to signal to the OWS crowd you are above them then make $380k a year and then brag to OWS supporters.
Getting into the top 1% by income is a lot easier than getting into the top 1% by net worth. Just to make it into the top 5% you had to have over $1.5 million in assets in 2009. That's not the top 1%. That's the top 5%.
In 2009, the median net worth of the top 10% of wealth in the United States was $1,569,000. That is, if you had exactly that amount, half of the top 10% would be poorer than you and half of the top 10% would be richer than you. You would be standing exactly in the middle. By definition, we know that this must be the cut-off for the top 5% of net worth.
The people making $380k from a high salary are at much greater risk of falling out of the income top 1% than those who make their $380k from interest and dividends. The people with extensive assets are the real elite.
If you think the top 1% is out of reach how about the top 5%? Based in adjusted gross income the IRS says in 2010 about $160k was the threshold for reaching the top 5%. That's after tax deductions, including 401k contributions and HSA contributions. So realistically you've probably got to earn about $190k to make it into the top 5%.
In that last link note that the top 50% only requires $33k of income. So it is pretty easy to feel like you've surpassed half the US population. The US government spending per household (at nearly $36k) has now surpassed the level of earnings of the average American wage earner.
What's tragic about all this: It has become expensive to live in a nice neighborhood. Your ranking by looking at your income might seem high at first glance. But what are you paying for? I'm reminded of a tweet from Steve Randy Waldman: "the most expensive amenity in real estate is well-behaved neighbors." Later in the exchange tells a non-American "...you'd be surprised how expensive a nice life in America is even for those who care little for the trappings of success." Too true.
|Share |||By Randall Parker at 2012 January 16 11:38 AM Economics Inequality|