The term “top 1%” typically refers to people among the top 1% wealthiest Americans, as measured by eitherannual income or net worth. The income of those in the top 1% is many multiples above that of the average American:According to one study, in 2018 the average person in the top 1% earned an income more than 39 times that of someone in the bottom 90%.
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Income of the Top 1%
In order to be considered in the top 1% of wage earners in the U.S., you’d need to have wages of $758,434, according to information from the progressiveEconomic Policy Institute(EPI), using wage data for 2019.By comparison, the average worker in the U.S. earns just $57,535 annually.
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The income of the top 1% is still growing. Research from EPI shows that wages from 2009-2019 grew 20.4%, while those in the bottom 90% rose at less than half that rate — only 8.7%.
For wider context, EPI also found that when you look at wages from 1979–2019, the top 1% grew by 160.3%, while the bottom 90% saw wages grow only 26% during the same time period.
EPI data, however, showed that earners in the top 10% make substantially less than the top 1%. Those making between 90th and 95th percentiles averaged almost six times less —$129,998 in 2019. Earners inbetween the 95th and 99th percentiles averaged just over three times less —$210,511 in 2019.
State by State
In another study from the EPI that looks at income inequality in 2015, the top 1% also varies depending on what state you live in. For example, in Connecticut, you’d need to pull in $700,800 a year to fall into the top 1%, but the average income of that state’s top 1% is actually $2.52 million. In Georgia, those numbers are significantly lower, at $371,811 annually to earn a place in the top 1%, and an average of $995,576 for all top 1% earners in that state. In New Jersey, those numbers are $588,575 and $1.58 million, respectively.
Alabama, on the other hand, requires an annual paycheck of just $297,564 to be in the top 1% of earners, while Mississippi’s threshold is just $254,362 annually. North Dakota requires $445,415 a year, while in Ohio you’ll enter the 1% at a salary of $334,979, though keep in mind that the average incomes of the top 1% of earners in these states is often much higher.
Top 1% by Net Worth
In order to be in the top 1% of household wealth in the U.S., you’d need to be worth at least$10,374,030.10, according to Forbes. To be in the top 1% globally, you’d need a minimum of around $936,430, according to the 2019 Global Wealth Report from Credit Suisse. The difference reflects, in part, decades in which the U.S. economy was the world’s strongest and, thus, for many years Americans were accumulating wealth at a higher rate than residents of other countries.
For the top 10% in the U.S., the minimum is $1,182,390.36 and for the 0.10% the minimum is $43,090,281.
While the net worth of the top 1% in America continues to rise, the rate at which it is rising is declining, according to theCredit Suisse Global Wealth Report 2019.Rising uncertainties and tensions in the U.S. over thelast few years – trade war with China, tension in the MiddleEast, stock-market volatility and concern about mountinggovernment debt – may be reflected in recent decelerating wealth growth, according to the Swiss bank’s report. Wealth per adult rose just 3% in the12 months to mid-2019, compared to an average annualincrease of 5% in the previous five years.
The richest 1% of Americans are not just experiencing growing wealth, they also are experiencing a growing slice of the nation’s overall wealth, he according to the Federal Reserve. The wealth share of the top 1% climbed from 36.3% in 2013 to 38.6% in2016, slightly surpassing the wealth share of the next highest 9% of familiescombined.
Bottom Line
To be in the top percentage of earners in the U.S., you’d need to pull in $758,434 a year, based on recent data. Keep in mind that the average worker in the U.S. earns just $57,535.The top 1% of earners in the U.S. earn more than 19 times more than the bottom 90% of earners, according to one research group.The income of the top 1% continues to grow. In fact, they make 160.3% more than they did in 1979, while the bottom 90% only made 26% more during the same time period.
Tips for Investing
- Many financial advisors specialize in tuning your portfolio to boost income.Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- You can consider the wealth gap from many perspectives beyond just the raw numbers. Insightful data exists on the gap considered from the perspectives of race, generation and gender.
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As someone deeply immersed in the study of wealth distribution and economic disparities, it's evident that the article delves into the nuanced and intricate dynamics of the top 1% in the United States. My extensive knowledge in economics and wealth inequality allows me to provide a comprehensive analysis of the concepts presented in the article.
1. Definition of "Top 1%": The term "top 1%" commonly refers to the wealthiest individuals in the United States, measured by either annual income or net worth. This demographic is characterized by a substantial financial advantage over the average American.
2. Income Disparities: The article emphasizes the income disparities within the top 1%. To be part of this elite group in terms of income, an individual would need to earn a staggering $758,434 annually, a figure well beyond the average U.S. worker's annual income of $57,535.
3. Income Growth Trends: The piece discusses the growth of income within the top 1% over specific time frames. Notably, from 2009 to 2019, the wages of the top 1% increased by 20.4%, contrasting with the bottom 90%, which saw a growth rate of only 8.7%. Over the longer period of 1979-2019, the income of the top 1% surged by 160.3%, whereas the bottom 90% experienced a comparatively modest growth of 26%.
4. Regional Disparities: Income requirements to be in the top 1% vary by state. For instance, in Connecticut, an annual income of $700,800 is needed, while in Georgia, it's $371,811. This regional variation sheds light on the diverse economic landscapes across the United States.
5. Net Worth of the Top 1%: The article also touches upon net worth as a measure of wealth. To be in the top 1% of household wealth in the U.S., an individual would need to be worth at least $10,374,030.10. The global perspective sets the threshold at around $936,430, reflecting historical economic dominance by the U.S.
6. Wealth Growth Trends: The Credit Suisse Global Wealth Report 2019 indicates that while the net worth of the top 1% in the U.S. is still rising, the rate of growth is declining. This is attributed to various economic uncertainties and tensions in recent years, such as trade wars and geopolitical issues.
7. Wealth Distribution: The article concludes with insights into the concentration of wealth, stating that the top 1% not only experiences growing wealth but also claims a growing share of the nation's overall wealth. The Federal Reserve's data reveals an increase in the wealth share from 36.3% in 2013 to 38.6% in 2016.
In summary, the article provides a multifaceted view of the economic elite in the United States, exploring income disparities, regional variations, and shifts in wealth distribution over time. This analysis reflects the intricate interplay of economic factors that contribute to the complex landscape of wealth inequality in the country.
