Who Are The 'One Percent' Protesters So Despise?

Occupy Wall Street one percentThe One Percent is the villain of the moment, but it's a mostly faceless one. We can imagine Bernie Madoff, Rupert Murdoch, those guys from Enron, and a smattering of Goldman Sachs execs sitting around a mahogany table smoking cigars and ashing on your mortgage papers. But really, it's hard to know who the protesters are talking about, and it's hard to understand their crimes. As Matt Taibbi writes in Rolling Stone magazine, manipulating the markets, the government, and the regulatory structure "simply can't be seen by the public or put on TV."

So who are the One Percent, and where did they come from?

In 1915, statistician Willford I. King noted with concern that the richest 1 percent of Americans took home 15 percent of the nation's income. As Timothy Noah writes in his series on inequality for Slate, the country soon introduced the modern income tax, lest disparities became so vast that America became an aristocracy like Britain.

Income distribution became profoundly more equal during the "Great Compression" of the '40s, '50s, and '60s. But today, the top 1 percent take home a record 24 percent of the nation's income, almost triple the percentage in 1976. The top 0.1 percent take home 7.7 percent. Noah has dubbed the last three decades the "Great Divergence."

The Occupy Wall Street protesters have set up camp in the heart of Manhattan's financial district, making the target of their ire both figuratively, and often literally, the corporate executives, fast-fingered financiers, and "quants" who dwell in those dizzying skyscrapers. Many 99 percenters believe, and shout, and scrawl on signs, that those giants of the 1 percent have rigged the system in their favor, at the expense of almost all of their fellow countrymen.

How else, after all, could more than 80 percent of the massive wealth increase between 1980 and 2005, and almost every penny of the 20 percent growth of the 2000s, have found its way into their hands?

How else could America have tumbled into income inequality more gaping than in Guyana, Nicaragua and Venezuela? And how could it continue to rise, while those banana republics are becoming more equal?

But in fact, the largest portion of the 1 percent don't work in finance at all.

Averaging $1.5 Million Per Year

The top 1 percent, as calculated by the Washington Post's Wonkblog, are those who took home at least $516,633 last year, and had a net worth in 2007 of at least $8,323,000. An average member of that 1 percent will earn $1,530,773 in income this year.

According to a paper by Jon Bakija, Adam Cole and Bradley T. Heim, almost one third of 1 percenters are executives, managers, and supervisors not in the financial sector. Another 15.7 percent of members of that 1 percent work in the medical field, followed by laborers of finance, who make up 13.9 percent of the top 1 percent.

Those in the computer, engineering and technical sectors make up a comfortable 4.6 percent of that top fraction of earners, followed by the retired and deceased. (Elvis is the highest earning person not alive.)

Only (only?) 29 of the 100 richest people in America, as compiled by Forbes magazine, earned their staggering wealth through finance. Many of our country's richest became that way through creating something of great value to a lot of people, like Facebook, Patron tequila, Google, Mars bars, and anything made by Apple.

Then There's The Ultra-Rich

But while Occupy Wall Street might be inaccurate in painting all of the 1 percent with a single brush, the protestors are right when they target corporate executives, managers, supervisors and financial professionals as the greatest beneficiaries of America's growing income inequality.

That group makes up the majority of the top 0.1 percent -- the ultra-rich -- and account for 70 percent of the increase in the share of national earnings going into the hands of that narrow elite.

As Noah notes, finance saw its share of corporate profits rise from less than 10 percent in 1979 to over 40 percent in the past decade. He concludes that the upward distribution of income is the result of the decline of organized labor, a dysfunctional educational system, and, yes, the abusive exercise of power of the ultra-rich.

Americans have never been happy with this situation. The deafening quiet of most Americans on the subject until now is because most didn't realize that this was the situation.

Country A, B Or C?

In a recent study, a sample of Americans were presented with three imaginary countries, and asked which one they would prefer to live in. Country A had completely equal distribution of income: The top 20 percent possessed 20 percent of the nation's wealth. In Country B, the top 20 percent owned 35 percent of the wealth, and in Country C, the top 20 percent had 80 percent of the wealth.

Ninety-two percent of Americans chose Country B, with political affiliation making almost no difference. More people chose Country A (which does not exist) than Country C.

Country B is Sweden. Country C is the United States.

Whoever the One Percent is, most Americans think society would be better-off if they took home a little less.

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