Naturally, in our elementary math curriculum we do not directly address income and wealth with students, but we do discuss things like dividing up pieces of a pie. They have strong opinions about eating pie, just as we adults have strong opinions about sharing pieces of the economic pie.
Since we can divide any pie into infinite numbers of pieces, I'd like to ask, Why one percent versus ninety-nine? Where is the line? How do we define (point fingers at, or enter) the top 1%?
The following example data is very rough and rounded to the nearest even number. It was outlined by a professional pie slicer. If you have ever cut an apple pie into sections, you know that the crust may break, the filling ooze out, or an apple segment get snatched away by your brother. So it is in economics - there is no perfect line.
If you expect to qualify for the 1% using your earned income, you need about $300,00-$400,000 per year. (The average American family has about $55,000 of income.) You are probably a doctor, lawyer, upper level manager or executive, car dealer, or successful business owner. You've worked hard for 20-40 years, been promoted and invested wisely so your investments produce income.
If you prefer to enter the 1% using your accumulated (or inherited) wealth, you need more than one million dollars. Take all that you own, subtract what you owe, and place yourself in the ranks according to the following scale:
- top 1.0% with $1.2 million
- top 0.5% with $2.0 million
- top 0.25% with $3.0 million
- top 0.10% with $5.0 million
- top 0.01% with $25 million
Eventually the percentages at the top get so small that they're unmeasurable. The LA Times said recently that the six family members who have inherited Sam Walton's estate now have about $90 billion between them - about as much of the whole pie as the bottom 30% of Americans. That doesn't make them bad people, by the way, nor does it mean you will never see them walking down a street in your neighborhood.
|House near San Diego, former home of the richest woman in the world|
For very detailed discussions accumulating wealth, see the Who Rules America website. I am indebted to them for some of the thoughts here, as well as Jack Bogle (formerly with Vanguard).