I’m In The Top 1%?

Categories: Fact Check, Finances, Poverty
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Published on: 2014.09.30

All I've Got
Money
(Copyright © 2006 by Wil C. Fry. Some rights reserved.)

On Facebook, my sister linked to a cartoon series that insinuated we U.S.ians are the “top 1%”, after quoting Jesus from Matthew 19:23-24 (rich folks and a camel through the eye of a needle).

So I looked it up (the cartoon didn’t list any sources).

The first article I found (this one) says it’s true. Anyone making “around $34,000” a year is in the world’s richest one percent, it says. (The first time I visited the site, I was able to read the article; when I went back to get the link for citation, there was a paywall preventing me from reading it.)

CNN says it’s more complicated. In the Jan. 2012 article:

“It only takes $34,000 a year, after taxes, to be among the richest 1% in the world. That’s for each person living under the same roof, including children. (So a family of four, for example, needs to make $136,000.)”

So it’s not as cut-and-dried as it first seemed. I’m not in the world’s top one percent and never have been.

The most money I ever made living alone was about $26,000 (in 1998), and that was before taxes. I brought home less than $20,000 that year. And I lived in the cheapest apartment I could find (in the worst neighborhood in North Little Rock), drove a barely-moving vehicle, and worked seven days a week for months without a break. Many days, I ate Ramen noodles and nothing else in order to pay all my bills.

Living with my wife — before children — we never came close to that mark (which would have been $72,000 after taxes), and of course once you add two children, we’ve moved farther from the necessary amount. Thankfully, our standard of living is worlds away from how I lived in 1998. Compared to much of the world, our standard of living probably seems “rich”, despite our household being close to median for the U.S.

I’m not going to feel guilty about that, especially considering:

1) We can’t choose where we’re born or to whom we’re born
2) How hard my wife has worked to obtain the salary she makes

Wait! Doesn’t that sound like the argument that rich people use? It does, really. “Sure, I’m a millionaire, but I work hard for my money and the free market values me as being worth what I make.”

It does help put things in perspective, however. How much of our (still pretty high) income goes to pointless pursuits?

The problem in the U.S. isn’t so much that we can’t get our hands on enough money to live. Most of us can. Even people without jobs seem to squeak by without living in shanty towns or eating dirt soup. Some of them have the latest iPhone.

The problem in the U.S. is the widening gap between most of us and the richest of us. Many studies, including one by Harvard Business School say this trend is “unsustainable”.

A few congresspersons earlier this year said they’d live for a week as if they earned minimum wage. The ABC News story begins with this false statement:

“A trio of Democratic politicians are about to find out what it’s like to be poor.”

Um. Will their mortgage payments come due during that week? What about their mobile phone bills? (They said they’d be chronicling their experiences via social media throughout the week.) No, these people will not find out what it’s like to be minimum wage workers during one week of spending much less money. They might have fewer $5 cups of coffee, but they’ll still stand in line wearing patent leather shoes and name-brand suits. They’ll still be getting around town in the cars that their wealth bought them, and living in homes that minimum-wage earners call “mansions”.

Unlike many developing countries who are so poor that they make us look like we’re rich, we’re actually on track to leave less to our kids than our parents left us. Not “we” as in my family, but “we” as in the whole country. We have less dependable retirement options than our parents had. Our children will have more debt, less property, and about the same income as we do. And that’s assuming that there’s not another great recession any time soon (many economists predict there will be).

But the wealthiest U.S.ians are getting richer. Their incomes are rising at a startling rate.

Gravel Ridge Apartment
Gravel Ridge, Ark., where I lived for 10 months or so, right after my “richest”-ever year of work
(Copyright © 1998 by Wil C. Fry. Some rights reserved.)


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