Occupy Wall Street: Who Are The One Percent?

By Masao Suzuki |
October 16, 2011

From: Fight Back! News

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.