People who are in the top one percent in income receive far more than one percent of the attention
in the media.
Even aside from miscellaneous celebrity bimbos, the top one percent attract all sorts of hand-wringing
and finger-pointing.
A recent column by Anna Quindlen in Newsweek (or is that Newsweak?)
laments that “the share of the nation’s income going to the top 1 percent is at its
highest level since 1928.”
Who are those top one percent?
For those who would like to join them, the question is: How can you do that?
The second question is easy to answer.
Virtually anyone who owns a home in San Francisco, no matter how modest that person’s income
may be, can join the top one percent instantly just by selling their house.
But that’s only good for one year, you may say.
What if they don’t have another house to sell next year?
Well, they won’t be in the top one percent again next year, will they?
But that’s not unusual.
Americans in the top one percent, like Americans in most income brackets, are not there permanently,
despite being talked about and written about as if they are an enduring “class”—especially
by those who have overdosed on the magic formula of “race, class and gender,” which has
replaced thought in many intellectual circles.
At the highest income levels, people are especially likely to be transient at that level.
Recent data from the Internal Revenue Service show that more than half the people who were
in the top one percent in 1996 were no longer there in 2005.
Among the top one-hundredth of one percent, three-quarters of them were no longer there
at the end of the decade.
These are not permanent classes but mostly people at current income levels reached by
spikes in income that don’t last.
These income spikes can occur for all sorts of reasons.
In addition to selling homes in inflated housing markets like San Francisco, people can get
sudden increases in income from inheritances, or from a gamble that pays off, whether in
the stock market, the real estate market, or Las Vegas.
Some people’s income in a particular year may be several times what it has ever been
before or will ever be again.
Among corporate CEOs, those who cash in stock options that they have accumulated over the
years get a big spike in income the year that they cash them in.
This lets critics quote inflated incomes of the top-paid CEOs for that year.
Some of these incomes are almost as large as those of big-time entertainers—who are
never accused of “greed,” by the way.
Just as there may be spikes in income in a given year, so there are troughs in income,
which can be just as misleading in the hands of those who are ready to grab a statistic
and run with it.
Many people who are genuinely affluent, or even rich, can have business losses or an
off year in their profession, so that their income in a given year may be very low, or
even negative, without their being poor in any meaningful sense.
This may help explain such things as hundreds of thousands of people with incomes below
$20,000 a year living in homes that cost $300,000 and up.
Many low-income people also have swimming pools or other luxuries that they could not
afford if their incomes were permanently at their current level.
There is no reason for people to give up such luxuries because of a bad year, when they
have been making a lot more money in previous years and can expect to be making a lot more
money in future years.
Most Americans in the top fifth, the bottom fifth, or any of the fifths in between, do
not stay there for a whole decade, much less for life.
And most certainly do not remain permanently in the top one percent or the top one-hundredth
of one percent.
Most income statistics do not follow given individuals from year to year, the way Internal
Revenue Service statistics do.
But those other statistics can create the misleading illusion that they do by comparing
income brackets from year to year, even though people are moving in and out of those brackets
all the time.
That especially includes the top one percent, who have become the focus of so much angst
and so much rhetoric.