The Occupy Wall Street movement chants “We are the 99 percent, you are the 1 percent.” It’s a catchy refrain, and there are many excellent reasons to put the focus on Wall Street in the struggle for economic and political justice in the US. But even singling out one percent of the US means we are still talking about over 3 million people–are they Wall Street types? Where do they actually work?
Many high-income workers are indeed in finance, but it appears that finance workers are not the most numerous of the one percent: executives, managers and supervisors of non-finance industries take that prize as 31 percent of the top one percent by income, excluding capital gains. Medical workers come in second at 16 percent, and all finance professions come in third at 14 percent. This information comes from the report Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality (pdf) by Bakija, Cole, and Heim, based on tax data, self-reported occupation, and the industry of the employer.
Here’s how the 1 percent has developed over the years:
Shown above are the top five categories in presented in Table 2 (p. 51) of Bakija et al. Other categories each contributed about 4 percent or less of the total. Finance has in fact grown substantially–even in the years 1993 to 2005 its share of the top one percent of wage-earners has grown from 11 percent to 14 percent. But there’s a lot of other people in the top one percent.
Important caveats: I am talking about the top 1 percent by income, whereas the top 1 percent by wealth are often the focus of Occupy Wall Street. I don’t know how you would even start trying to identify the top 1 percent by wealth. Also, this is the top 1 percent of tax units, which gets a bit confused by couples filing jointly. The occupations shown above are those of the primary taxpayer in the couple.
Excluding capital gains from the analysis may change who the top one percent are. Fortunately, the paper does provide the same occupation data for the top 0.1 percent of the population both with and without capital gains (Table 1 on p. 50 and Table 3 on p. 52), so we can actually compare directly for the elite three hundred thousand:
There are some small differences, but note how the share for the financial professions are quite close–18.4 percent when capital gains are counted, and 18 percent even when excluded. Now that we’re only looking at the very top 0.1 percent, both executives, managers, and supervisors and all financial professions together account for about 60 percent of this group.
Finally, let’s take a quick look at this mix of professions since 1979, excluding capital gains again:
Finance has definitely grown to take a bigger share of the top 0.1 percent, from 11 percent in 1979 to 18 in 2005. But financial professions still are second-place, even at these lofty heights.
I’m uncertain about the relation between finance and inequality overall–that question has spawned a vast and technical literature in economics–but it seems that the people of finance are just one group at the very top. Wall Street stands as a symbol of US wealth and therefore of US inequality, its image sharpened by the scandals, excesses, and human suffering of the housing bubble. I strongly support Occupy Wall Street, but we’ll also have to look further and broader to understand who’s at the very top of the economic ladder, and what they are doing to keep themselves there.
Source code and csv files of the tables I used are available on github.