Monday September 1, 2014
| Last update: Saturday at 11:55 PM
Occupy Wall Street

Who are the one percent?

First of four articles
Analysis by Masao Suzuki |
October 16, 2011
Read more articles in
Occupy Boston march, Oct. 10.
Occupy Boston march, Oct. 10. (Fight Back! News/Staff)

Across the country, the movement sparked by Occupy Wall Street has caught fire. This movement, identified by the slogan, “We are the 99%” targets the 1% of rich and powerful who are running the country for their interests and profit, at the expense of the rest of us who face high unemployment, lower wages, soaring tuition costs, home foreclosures and lack of affordable health insurance. In addition, servants of Wall Street are pushing to dismantle Social Security and Medicare and to raise taxes on the poor while cutting taxes even more on the rich. They say that they have no money, but are sending bombers and troops to more and more countries, so that military spending is now the single largest expense of the federal government, costing more than $800 billion a year.

So who are the 1%? The movement has targeted Wall Street, and indeed, before the recession and financial crisis, the financial industry was making 40% of profits of big corporations. But while the pain inflicted by Wall Street on the housing market (while getting bailed out itself) is historic, corporations across the board have shifted jobs to other countries (cutting some 4 million jobs in the United States while creating 3 million in other countries) and amassed some $2 trillion dollars in profits that they are not spending.

While there are millions of small businesses that are owned and operated by a single person, these small businesses only do about 5% of all sales in the economy. On the other hand, corporations make up only 10% of all businesses but do more than three-quarters of all sales. An even smaller group of less than 1000 big corporations with sales of more than $2.5 billion each make up half of all sales in the economy. The domination of the economy by a small number of giant for-profit corporations is what is called “monopoly capitalism.“

The most common yardstick of one’s position in the economy is income. The U.S. Census Bureau, the government agency in charge of collecting statistics, does not report much on people with very high incomes. They do say that households making more than $250,000 in income make up 2.1% of all households, but this is a much broader group than the top 1%.The Internal Revenue Service did report that the wealthiest 1% of taxpayers had an Adjusted Gross Income of $380,000 in 2010. So one way to define the top 1% would be those making more than $400,000.

But there are problems with using income to define the top 1%. For example, many professional football players make more than $400,000 a year. But on average, they only play three and a half seasons, so their high incomes are temporary. In addition, studies show that the average pro football player only lives 52 years, some 25 years less than the average American male. So they are making a sacrifice that the real rich and powerful don’t make. In contrast, oil billionaire John Rockefeller lived to be 98 and billionaire investor Warren Buffett is still going strong at 81. Last, and perhaps most importantly, last year the football owners locked out the players in a dispute over pay and working conditions, showing the power of the wealthy individuals who own the teams over their highly paid employees.

A better measure of economic power is wealth. Wealth can be more long-lasting than income, and can be passed from parents to children, unlike income. Finally, wealth gives economic power and control, as opposed to income, which allows one to buy more, but doesn’t give one economic power. Those whose wealth controls the big corporations who dominate the economy are the “monopoly capitalists.”

According to the IRS estimates based on estate taxes, there were about 2.2 million people, or about 1% of the adult population, whose net worth was $1.5 million or more in 2004. Net worth is a measure of wealth that takes a person’s total assets (home, real estate, stock, bonds, businesses, retirement savings, etc.) and subtracts all debts (mortgages, credit card, etc.). This top 1% owned almost $3.3 trillion in stocks, or more than half of the $6 trillion in stock owned by households that year. This means that the top 1% controlled the big corporations that dominate the economy.

An earlier study by economist Edward Wolff, based on statistics from the Federal Reserve Bank’s “Survey of Consumer Finances,” showed that the top 1% owned 47% of the net financial wealth (stocks, bonds, and businesses but not cars and home equity) in 1998. Wolff found that the concentration of wealth was increasing during the 1980s and 1990s, hand in hand with the increasing concentration of income as the rich got richer and the poor got poorer.

The rich not only control the corporations, but also the government. Over 40% of congress people, a majority of senators (54 out of 100), and three of the last four presidents were millionaires (and the only one who wasn’t, Bill Clinton, is a millionaire now), far more than the 4 to 5% of households with net worth of more than a million dollars estimated by Wolff. In addition, campaign contributions from the rich and corporate elite, combined with the influence of lobbyists who work for them, make sure that only those who serve the elite can be elected to high political office.

The electoral system as a whole is stacked against working people. Both major parties, the Republicans and the Democrats, are parties of the rich. The Occupy Wall Street movement, by breaking away from the confines of our two-party political system and appealing directly to the people, offers real hope for a mass movement that can beat back the right-wing and corporate attacks on our jobs, homes, schools and social programs.

Read Part II: Who are the 99? The Working Class
Read more Fight Back! coverage of Occupy Wall street and follow @fightbacknews for live updates from #OccupyWallStreet protests around the country.

5 comments

 
piscine marque zodiac wrote 2 years 9 weeks ago

Arrigato

Family farms and smaller businesses include the backbone in our communities.

 
Chris Q wrote 2 years 12 weeks ago

to nefsigh

Caring for people who need assistance is not the job of government. It is nowhere in our Constitution. This is a job for family, friends, neighbors and the church. It is done with love and heart. Most importantly, it is voluntary. Government has worked to destroy these institutions, weakening the family, church, neighborhoods. They are stealing from Peter to pay Paul, and taking credit for "redistributing" their stolen money as though it was their very own. Politicians buy votes by giveaway programs to the point where no one will work anymore. Currently, workforce participation rates are 58%, the lowest in 30 years. Here's a link to a nice explanation of this principle.http://www.youtube.com/watch?v=3h8O7V-WxWQ&feature=youtube_gdata_player

 
nefsigh wrote 2 years 12 weeks ago

Your comment

While you make valid points, you go off the rails (IMO) when you assume that others who do not work, do so out of their own selfishness. That is not the case. A great many of those who "live off others" are the elderly, who receive Medicaid, Medicare, Social Security, perhaps supplemental housing assistance and the like. Surely you do not expect these folks to get out there and pick up trash for their meager benefits, do you? Children also take up a lot of the "social welfare" programming. Again, would you want children working to "earn' their food and medical care, instead of using that time for other things--such as childhood and education? Our vets are another group that use federal tax benefits, and while many do go back to work, we have all become very aware of the latent damage done to these folks by war and many cannot hold a job in the traditional sense. Surely you do not want them dropped from the rolls simply because they look "fit" on the outside, do you?
your comment: ":Government is not here to take from some and give to others. It should be removing obstacles to freedom and innovation. Inner strength and values, pride and self respect are all necessary for a strong country. We need to restore ourselves, our neighborhoods and our communities to self reliance. " Is valid. With the caveat that government is also here to do those things that we cannot do or afford to do ourselves-whether that is making sure everyone ahs health insurance (although single payer would be better) and to make sure the infrastructure of the country is maintained, refurbish or rebuilt as needed. Last time I checked, I couldn't afford to build a dam by myself.

We also need to hold those in business accountable for what they do-whether they manufacture products; grow food or run outlet stores. unfortunately, we saw back in the lat 1800s/early 1900's how "irresponsible " economies were when it came to the pay, health and welfare of their workers and their communities. hence we have labor laws, EPA rules and unions. Returning to a time when all these entities were powerless or nonexistent will NOT bring America back, it will merely push millions upon millions more Americans into the poverty level, and once that happens, the revolution we have all heard about may indeed come about, Creating and protecting the haves from the halve nuts will only serve to exacerbate the situation. But at least in your missive (except the ending) showed you still have some hope, and that is good. Cheers. Respond if you wish.

 
Chris Q wrote 2 years 22 weeks ago

1%

Where are any facts or logic in this diatribe? Economics is simple. Make more than you spend and you will be economically free. Make or do something of value and someone will pay you for it and you can feed yourself and your family. Our problem today is that a large percentage of people are not working, but living off others who are working. The system will soon crumble as those who are dragging a heavier and heavier load for those who choose not to work will be crushed under their load. Government is not here to take from some and give to others. It should be removing obstacles to freedom and innovation. Inner strength and values, pride and self respect are all necessary for a strong country. We need to restore ourselves, our neighborhoods and our communities to self reliance. THERE IS NO FREE LUNCH, and NOBODY OWES US ANYTHING!

 
By Swag Means Necessary wrote 2 years 45 weeks ago

Terrific article!

Really excellent analysis of the economic and class roots of the 1% in the occupy wall street movement.