The One Percent

Annual Review of Sociology

Vol. 40:347-367 (Volume publication date July 2014)
First published online as a Review in Advance on April 3, 2014
https://doi.org/10.1146/annurev-soc-070513-075314

Lisa A. Keister

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Abstract

Recent protest movements brought attention to the one percent, a segment of the population that is critical to understanding inequality and social mobility but that attracts relatively little research attention. In this article, I survey current research on the one percent in the United States. I distinguish income from wealth and show that both are very concentrated but that the concentration of wealth, particularly financial wealth, is extremely high. I describe the demographic traits and finances of households who are in the one percent and discuss how these have changed in the past decade. I review literature that explains rising top incomes, and I propose that future research will usefully concentrate more on top wealth owners and on the demographic and life course processes that underlie income and wealth concentration. I conclude by speculating about why Americans are so tolerant of resource concentration.

Keywords

the one percent, income inequality, wealth inequality, social stratification, social mobility, economic sociology

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Figure 1  The one percent by income and wealth. Source: Author's estimates based on the 2001–2010 Surveys of Consumer Finances (http://www.federalreserve.gov/econresdata/scf/scfindex.htm). Bars indicate the percentage of total household income, net worth, or financial assets owned.

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Figure Locations

...Figures 1 and 2 use the SCF to summarize what we know about income and wealth concentration. Figure 1...

... use the SCF to summarize what we know about income and wealth concentration. Figure 1 shows the percentage of total income going to various segments of the distribution, ...

...Consistent with other estimates (Kennickell 2009b, Wolff 2010), Figure 1 shows that in 2010, ...

...and the next 9% received over 27% of total income in that year. Figure 1 also illustrates that the top one percent has consistently received nearly 20% of total household income, ...

...As Figure 1 shows, the top one percent of wealth owners has held more than one-third of total net worth since 2001 (Kennickell 2000, 2003; Kopczuk & Saez 2004; Kopczuk et al. 2010)....

...Ownership of financial wealth is even more concentrated than ownership of net worth. Figure 1 shows that the top one percent has consistently owned 35% of financial assets since 2001....

...there was only a slight increase in the percentage of financial assets owned by the wealthiest households in the years preceding the recent financial crisis and recession. Figure 1 shows that between 2004 and 2007, ...

...As Figure 1 shows, the share of wealth owned by the top one percent has been extremely high in recent years, ...

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Figure 2  What does it take to be rich? Source: Author's estimates based on the 2001–2010 Surveys of Consumer Finances (http://www.federalreserve.gov/econresdata/scf/scfindex.htm).

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Figure Locations

...Figures 1 and 2 use the SCF to summarize what we know about income and wealth concentration. Figure 1...

...and other sources. Figure 2 shows median household income; the thresholds defining the top of theincome and wealth (net worth and financial assets) distributions; and the Gini coefficients for income, ...

...the 2007–2009 recession had a somewhat equalizing effect as the percentage of total income going to top earners in 2010 returned to 2004 levels. Figure 2 shows that median household income fell nearly 8% as a result of the recession, ...

...Particularly notable is that the share of total net worth held by the top one percent increased between 2007 and 2010. Figure 2 shows that median net worth increased modestly between 2001 and 2004, ...

...Estimates for median financial asset values and thresholds for distributional segments shown in Figure 2 underscore the extent of financial asset ownership concentration and its relative constancy since the early 2000s....

...but it was relatively stable between 2000 and 2010 (Domhoff 2013a, McCall & Percheski 2010). Figure 2 includes estimated Gini coefficients for total income, ...

...As Figure 2 illustrates, the Gini coefficient for income was 0.56 in 2001, ...

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  • Tables

Table 1  Who are the one percent?

Sociodemographic characteristicIncomeNet Worth
 Top 1%Next 9%Next 90%Top 1%Next 9%Next 90%
Male97.895.370.495.887.871.2
Age55.051.950.360.260.149.5
Race/ethnicitya
 White, non-Hispanic90.984.969.292.590.068.6
 African American0.23.915.00.52.215.1
 Hispanic1.83.211.61.21.711.8
 Other7.18.04.35.96.14.5
Married, with childrenb53.348.629.640.233.431.3
Married, no childrenb39.942.324.850.345.224.4
Educationc
 Less than high school1.70.914.70.12.114.6
 High school2.310.133.28.211.033.1
 Some college3.912.625.15.314.624.9
 College30.434.317.738.031.018.0
 Graduate school61.842.19.248.441.39.4
Occupation
 Managerial/professional84.370.822.872.955.724.4
 Technical/sales8.611.922.96.48.823.2
 Not working6.79.234.219.530.431.9
Number of households2,8754,22125,3143,2534,08125,076

Source: Author's estimates from the 2010 Survey of Consumer Finances. Top 1%, next 9%, and next 90% are defined by total household income (for income sources), by total nonfinancial assets (for nonfinancial assets), and by financial assets (for financial assets). All values are percentages except age and number of households.

aRace/ethnicity is for the respondent.

bMarried includes living with a partner.

cEducation is the highest level completed.

Table 2  The finances of the one percent

 2001200420072010
 Top 1%Next 9%Next 90%Top 1%Next 9%Next 90%Top 1%Next 9%Next 90%Top 1%Next 9%Next 90%
Income (for top income earners)a
 Wage/salary income45.367.877.447.171.675.338.566.773.350.372.170.0
 Business24.215.84.728.014.84.628.618.16.231.815.26.1
 Interest/dividend5.66.52.58.44.31.77.64.51.77.94.81.6
 Capital gains23.35.91.013.72.80.222.95.60.77.90.9−0.6
 Other income1.73.814.42.76.618.22.35.218.12.17.022.9
Number of households3,1103,43815,6623,5053,29515,7953,4033,60315,0792,8754,22125,314
Assets (for top net worth owners)b
Nonfinancial assets
 Primary residence8.421.547.910.827.054.210.026.255.59.324.853.1
 Other real estate11.311.55.814.013.96.310.614.97.113.413.17.1
 Business equity32.615.14.834.514.24.341.317.13.636.714.14.2
 Vehicles0.61.87.40.61.76.80.71.66.20.71.77.2
 Other nonfinancial assets1.40.80.51.21.00.70.90.60.60.70.80.6
Financial assets
 Transaction accounts4.44.95.43.75.35.02.94.04.24.75.64.7
 Certificates of deposit0.31.32.10.51.71.60.71.41.90.71.91.7
 Bonds4.21.70.24.51.50.22.91.50.13.81.20.1
 Stocks16.49.23.010.97.01.810.66.71.69.05.51.4
 Pooled investment funds4.97.43.16.76.72.78.56.31.89.16.61.5
 Retirement accounts5.816.113.75.815.213.06.115.013.77.619.615.0
 Other financial assets9.78.56.16.74.83.54.94.73.64.55.03.3
Number of households3,2853,74915,1763,5683,57915,4483,4184,09814,5693,2534,08125,076

Source: Author's estimates from the Survey of Consumer Finances. Top 1%, next 9%, and next 90% are defined by total household income (for income sources) and by net worth (for assets). Percentages do not sum to 100 due to rounding error. Pooled investment funds exclude money market mutual funds but include stock mutual funds, tax-free bond mutual funds, government bond mutual funds, and a combination of other mutual funds, such as hedge funds. Retirement accounts include IRAs and Keogh accounts.

aIncome by source, as a percentage of total household income.

bPercentage of total household assets accounted for by various assets.

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