Posted by Leonard Steinberg on January 15th, 2012
To-day’s New York Times examines ‘the one percent’ a bit closer than it has in the past. Just like the Times is guilty of espousing averages when it comes to real estate statistics (All media is guilty of that!) it has been guilty in the past of not looking deeper into the subject to fully understand the extraordinary diversity within ‘the group’. Today that changed.
The reality is that the “one percent” is a very, very diverse group and averaging them is completely misleading. Yes, the group does have a few things vaguely in common, but just like all averages, there really is no such thing as an ‘average’ one percenter. Here are some facts to ponder:
1) Within the 1%, only the top 10% of the group earn above $ 6, 5 million annually. Thats about 120,000 households. The average ‘one percenter’ household earns $ 1,5 million. In Manhattan to qualify as a One Percenter, your household has to earn $ 790,000.00 or more…..
2) To qualify, you have to earn at least $ 380,000.00 per year. We all know this makes you very middle class in Manhattan, yet you could be perceived as rich in a small town elsewhere. Its all relative. Many poor people in the USA are perceived as quite wealthy when compared to the poor in other parts of the world too.
3) The jobs of the 1% are not limited to finance, in fact the group has jobs as diverse as is imaginable: Many are managers, ce0’s, physicians, dentists, but there are also book-keepers, writers (yes, there are over 10,000 writers in the 1%!)….59,000 teachers live in households of the 1%…..
4) What do they have in common: not that much, although a good chunk have solid college educations, work extraordinary hours, many are self employed.
5) I asked my brother, the Swiss banker living the goodlife, if there was any one thing he thought was common to the top 10% of the 1%…..he paused briefly and said in his experience most were extremely smart. Smart in their ability to make money. Seriously smart. He then added that there is a growing international group of super-wealthy that combine seriously smart with seriously corrupt…..
6) Inheritance is a big chunk of the “1%” but not nearly as big as you’d imagine. Yes many have inherited some money (40%), but not all have inherited the great fortunes you read about. That is a smaller segment.
7) 22% of the 1%’s income comes from capital gains as opposed to the 99% where its only 2%.
8) Men earn 75% of the money in a 1% household.
9) Sales at the Americana Manhasset, the upscale Long Island shopping center, have already exceeded their prerecession high. Even in down times, the 1 percent has incredible staying power, being far more likely than any other group to stay where they are rather than slip to lower rungs of the economic ladder.
10) 27% of 1% couples BOTH have advanced college degrees.
11) MANY of the very wealthy are super-talented: Didn’t Warren Buffet recently say its unwise to assume everyone should get a college degree when many simply do not possess the IQ to do so? Yes this is an unfair fact of life, just like it’s unfair that someone has the physical ability to throw a ball very well. Or sing beautifully. Or imagine the next tech device. Or win the lottery.
12) Manhattan’s ONE PERCENT carry the New York luxury real estate market on their backs, indirectly creating countless construction jobs, service industry jobs, spurring massive retail purchasing that employs thousands……not to mention the massive real estate taxes paid every year and the transactional taxes (City and State transfer taxes, mansion taxes, mortgage recording taxes…..).
So what is fair in the ONE PERCENT argument? This it a quandary the world faces to-day. I truly believe life is not fair, but for a whole host of reasons. I don’t think its fair that a doctor studies for almost 14 years, making a huge sacrifice and investment, only then to be ridiculed because they earn lots of money. I don’t think its fair that someone blessed with an uncanny ability to play with a ball earns ten times what this doctor earns. And I don’t think its fair that some porno-looking-broad has a reality show that affords her an income tripe that. I don’t think its fair that Lions eat Zebra’s. And I don’t think its fair that Zebra’s make chic rugs. I don’t think its fair when clients take up hours of my time without paying me a penny. I don’t think its fair that wealth is distributed so extremely un-evenly in some arenas. I think its unfair that many have absolutely nothing.
But at the end of the day, what does fair really matter? Health is really all that matters: unfortunately, good health costs a fortune too…..now that’s really unfair.