Limiting the inequality conversation to the 1% ignores reality

by Richard @ Bizmarts – May 13th, 2016

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For years the conversation in America regarding economic, social, and political inequality has been allowed to center on an moronic divide known as the 99% vs the 1%; when what is equally important is the divide between “most-people” and the “others”, on both the upper and lower categories.

According to recent statements, polls and articles the “Middle Class” in America circa 2015 had a gross income in the range of $50k to $150k annually. But this presentation disguises several realities, including components, structure, and incidentals of income. For example: does this range describe per-capita or household income? Is this gross or net usable income? What are the participation rates by segments within that range? Where along the scales is the “average” person?

One quick interlude suggesting an unpleasant observation was provided on Quora which follows below:

Census: What percent of individuals in America earn more than $150,000 per year?

Answered by:
 Tolga Yilmaz

Tolga Yilmaz, Researcher

2.41% of people 15 years and over (as of March 2013) earned more than $150k in total money income (excluding capital gains) in 2012, before payments for personal income taxes, social security, union dues, medicare deductions, etc. (For more on money income definition and data sources: http://www.census.gov/hhes/www/i…)

 

Male > $150k: 4,698,000
Total Male: 121,111,000
Percent: 3.88%

Female > $150k: 1,328,000
Total Female: 128,912,000
Percent: 1.03%

Total > $150k: 6,026,000
Total: 250,023,000
Percent: 2.41%

Source: U.S. Census Bureau, Current Population Survey, 2013 Annual Social and Economic Supplement. (PINC-11 – U.S Census Bureau)

Which demonstrates clearly that less than 3% of the U.S. Population makes more than the upper limit of “Middle Class” income, while 97% make less; but the presentation by OWS and others suggest we should concentrate on only the 1-99% inequality, partially due to the oversize influence and power held by the extremely wealthy, especially the “billionaire class” while giving a pass to the other groupings up and down the scale.

From the same Census source as provided above, we can obtain an income distribution chart which shows how many are in each major grouping along the scale:

US Census Bureau figures for 2014
Income of Household Number (thousands) [46] Percentage Percentile Mean Income [46] Mean number of earners [47] Mean size of household [47]
Total 124,587 $75,738 1.28 2.54
Under $5,000 4571 3.67% 0 $1,080 0.2 1.91
$5,000 to $9,999 4320 3.47% 3.67th $7,936 0.34 1.78
$10,000 to $14,999 6766 5.43% 7.14th $12,317 0.39 1.71
$15,000 to $19,999 6779 5.44% 12.57th $17,338 0.54 1.9
$20,000 to $24,999 6865 5.51% 18.01th $22,162 0.73 2.07
$25,000 to $29,999 6363 5.11% 23.52th $27,101 0.82 2.19
$30,000 to $34,999 6232 5.00% 28.63th $32,058 0.94 2.27
$35,000 to $39,999 5857 4.70% 33.63th $37,061 1.04 2.31
$40,000 to $44,999 5430 4.36% 38.33th $41,979 1.15 2.4
$45,000 to $49,999 5060 4.06% 42.69th $47,207 1.24 2.52
$50,000 to $54,999 5084 4.08% 46.75th $51,986 1.32 2.54
$55,000 to $59,999 4220 3.39% 50.83th $57,065 1.41 2.56
$60,000 to $64,999 4477 3.59% 54.22th $62,016 1.46 2.64
$65,000 to $69,999 3709 2.98% 57.81th $67,081 1.51 2.67
$70,000 to $74,999 3737 3.00% 60.79th $72,050 1.57 2.73
$75,000 to $79,999 3484 2.80% 63.79th $77,023 1.6 2.79
$80,000 to $84,999 3142 2.52% 66.58th $81,966 1.63 2.79
$85,000 to $89,999 2750 2.21% 69.11th $87,101 1.77 2.9
$90,000 to $94,999 2665 2.14% 71.31th $92,033 1.82 2.96
$95,000 to $99,999 2339 1.88% 73.45th $97,161 1.81 2.97
$100,000 to $104,999 2679 2.15% 75.33th $101,921 1.79 3.01
$105,000 to $109,999 2070 1.66% 77.48th $107,187 1.88 3.01
$110,000 to $114,999 1922 1.54% 79.14th $112,069 1.93 3.12
$115,000 to $119,999 1623 1.30% 80.68th $117,133 1.98 3.14
$120,000 to $124,999 1863 1.50% 81.99th $122,127 1.93 3.09
$125,000 to $129,999 1452 1.17% 83.48th $127,166 1.99 3.12
$130,000 to $134,999 1512 1.21% 84.65th $131,863 2 3.18
$135,000 to $139,999 1219 0.98% 85.86th $137,284 1.98 3.11
$140,000 to $144,999 1290 1.04% 86.84th $142,199 1.97 3.03
$145,000 to $149,999 1024 0.82% 87.87th $147,130 2.01 3.11
$150,000 to $154,999 1146 0.92% 88.70th $151,940 1.85 3.12
$155,000 to $159,999 848 0.68% 89.62th $157,177 2.08 3.15
$160,000 to $164,999 875 0.70% 90.30th $162,019 2.02 3.13
$165,000 to $169,999 786 0.63% 91.00th $167,101 2.1 3.16
$170,000 to $174,999 717 0.58% 91.63th $172,169 2.17 3.21
$175,000 to $179,999 607 0.49% 92.21th $177,187 2.19 3.28
$180,000 to $184,999 619 0.50% 92.69th $182,055 2.03 3.19
$185,000 to $189,999 556 0.45% 93.19th $187,299 2.03 3.2
$190,000 to $194,999 485 0.39% 93.64th $192,241 2.19 3.29
$195,000 to $199,999 436 0.35% 94.03th $197,211 2.23 3.27
$200,000 to $249,999 3249 2.61% 94.38th $220,267 2.08 3.24
$250,000 and over 3757 3.02% 96.98th $402,476

The groupings that demonstrate the inequality issues revolve around the upper 3%, and the declining percentages by brackets up to that range; and the 45+% of the population making less than $50k annually. Using percentages then we can say that roughly 50% of the population is “middle class” while 40% are “poor”, 10% are “wealthy” , and 3% are “rich”. Depending on where one is on the scale, they can develop animus toward those both below and above them; but if one evaluates the social, economic, and political power of each group which can affect them directly it should become clear where social improvement efforts should be directed, and can be the most effective.

A fairly recent addition to the data on economic, and thus, social and political power by the different groupings centers on their “capital”.

money

From the graph then, 60% of the population has a net worth roughly equivalent to their annual household income; whereas the upper 20% had four times larger holdings, but also that at least half the population had less than their annual income in net worth. The higher the income, the greater accumulation of net worth both in net and percentage measures. The other disturbing figure is the differential in net worth by quintile in the period 2000-2011, where more than 60% saw their net worth decline by more than 10%, the upper 20% saw their net worth increase by more than 10%.

(to be continued…)

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