The top 1% (Fault Lines)

According to this Al Jazeera news report, the richest one per cent of Americans earn nearly a quarter of the country’s income and control 40 per cent of its wealth. Also, the gap between rich and poor has widened over the last 30 years. For a great animation of the data, see The 99.99% versus the 0.01% (The Guardian). This is not just a news report, see below for several academic publications on the wealth gap in the US. Many would argue that income inequality isn’t a problem, as long as there is equality of opportunity (see for example Steve Horwitz in Income mobility or stickiness? (Horwitz, Reich and Pew)). For a reaction to that assumption, see: McNamee, S. J., & Miller, R. K. (2004). The meritocracy myth. Sociation Today, 2(1).

For more research on the gap, see: Saez, E. (2009). Striking it richer: The evolution of top incomes in the united states (update with 2007 estimates). Working Paper Series, Institute for Research on Labor and Employment, UC Berkeley. The CATO institute published a paper saying such figures are exaggerated, see: Reynolds, A. (2007). Has US income inequality really increased? Policy Analysis, 586, 1-24. However, a more recent academic publication confirms the Al Jazeera news report and states that “in 2004, when the wealthiest 1 percent of households received 16.9 percent of all income, those households held nearly double that portion of all net worth (34.3 percent) and even more of all net financial assets (42.2 percent). Stated differently, these extremely affluent households own more than 34 times the average share of wealth and more than 42 times the average share of investment resources. The top 10 percent of households holds 71.3 percent of the wealth… These few people are the winners. At the losers’ end of the distribution, the greater part of the people, amassing 80 percent of households, hold only 15 percent of the net worth, mainly in owner-occupied housing. This concentration of wealth at the top has increased for decades.” (see Goldsmith, W. W., Blakely, E. J., & Clinton, B. (2010). Separate societies: Poverty and inequality in US cities. Philadelphia: Temple University Press.)