Recently, the Economic Policy Institute published “11 Telling Charts from 2011,” including the following one showing the share that different segments of the US Population took of the wealth gain from 1983-2009.
When we first looked at this chart, we started reading from the left and adding the numbers but did a double take by the time we added the Top 1%, Next 4%, Next 5%, and Next 10% – or the top 20%. Add their shares together and you get 101.7%. At first that just didn’t seem right, since our assumption was that when you add up all the shares one would get 100%. Naively, we had assumed that, while radically unequal, the gain in wealth for all quintiles would positive. A piece of folk philosophy in the United States is that the rich can gain huge gobs of money and power, so long as the poorest can also have some piece; and that those who rise do so on their own merits, but not by making the worst off even worse off. That, as it turns out, is also a premise of the most influential theory of justice in contemporary political philosophy, which states that the only permissible inequalities are those that make the worst off better off than they otherwise would be under pure equality.
The past twenty-five years have followed a different path from mainstream, common sense theories of justice. The worst have been made worse off. Meanwhile, the massive gains of the top 20% were only as large as they were because wealth was redistributed from the poor to the rich (with very moderate gains for the top 20-40%). The expropriated were expropriated some more.
These figures are even more important than the income inequality statistics with which everyone is now familiar, because those income statistics alone give the impression that, at the very least, nobody is being made worse off. In addition, wealth is a much better indicator of social and economic power than income, as it shapes individual bargaining power, determines who controls investment, and establishes the distinction between those who are economically secure enough not to have to work, and those who aren’t. Looking at the graph again, a key political point emerges, which we have made before: the problem is not with the 1% alone. The expropriators area larger class than that. After all, the next 4% took just as large a share of the total wealth increase, and overall, the top 20% are doing quite well. To reuse a chart we have used before, the top 20% control 85% of the total wealth in the United States, and if residential wealth were removed (at least, value of primary homes), that would undoubtedly rise much higher.
So the current political obsession with the 1% introduces a very problematic distortion into the actual dynamics of class, and the real distribution of wealth and power, in the current political economy. We are the 99% has a wonderful, quasi-universalist ring, but actually real distinctions under the rug, and implicitly dodges hard conversations about the real class composition of the United States. A real critique would have to reach beyond mere populism.
thecurrentmoment 
Very useful discussion and numbers, but I would read them somewhat differently. For example the 80-90% cohort, with 13% of wealth, comes closest to what one might call ‘fair’: 10% of population holds 13% of wealth. The 90-95% cohort has double its ‘fair share,’ an anomaly but a small one. After that the shares rise steeply, so that 96-99% get 6 times their ‘fair share’–but the infamous 1% are at 34 times ‘parity,’ a truly excessive distribution. If, however, you broke it down once more to show the .1%, I suspect you would locate the precise problem: the big grab is NOT the 20% or even the 1% per se, but the .1% who have monopolized the huge unearned incomes that compromise our very basis as a democratic society. So rather than drive a politically untenable wedge between the 80% and the so-called 20% (a quite heterogeneous group who are really for the most part just skilled wage-earners and not all that rich), why not concentrate on the steep end of the curve, which really does start around 1% and ascends vertically from that point? That’s where the plutocratic power resides, and yes, in a democracy 99 to 1 would make for good odds.
yes, this jumped out at me as well. “the top 20%” is really a statistical artifact of the SKY-ROCKETING wealth of a smaller segment. sort of lazy reading of the numbers here.
Totally share your dislike of the “99 percent” conception which certainly ignores the relative comfort of the (upper) middle classes and – more importantly – works only by avoiding any common denominator, such as “workers”, “exploited”, let alone any sort of “class”. You can be upper middle class and still be pissed off at missing out on the real elite’s exclusive party. “99 percent” isn’t an economic group, it’s a mere statistical category. It facilitates criticism without analysis; “those few baddies” versus “us, the majority” (“the people”/”das Volk”). This makes it analytically so hollow, and just a fleeting (probably) vehicle for populism; yet the kind of populism that – writing from Germany – leaves a sour aftertaste.
But I have to point out that your second graph doesn’t quite support the point: yes, the top 20% own 85% of assets, but the top 5% actually account for nearly three quarters of that. In spite of all the mindless horror of the “99%” discourse, what your graphs make very clear is actually quite how exceptional the success of a *fairly* small class (not 1%, but neither 20%) has succeeded in appropriating nearly all surplus of the past 25 years without being forced to even include the broader bourgeoisie – which is remarkable. The present era would appear a unique aberration from the laws of motion ever since the rise of the labour movement.
PS: Does anyone else shudder when the “Occupy” crowds chant to Jeffrey Sachs? http://www.youtube.com/watch?v=0UxtJTWahWM&feature=related
I take the point being made in the comments, the agreement mix with “buts,” BUT… I think his case is made fairly well. What you’re seeing with the top 20% is the fulfillment of the promise of trickle down. They’re getting “close to their fair share,” as Phil stated. However the point of the post, as I read it, is that only the top 20% is receiving any sort of substantial income gain. The top 80-90% get the windfall of the 90-100’s, but it doesn’t trickle much farther down than that. That ties them to the gains of the 1 and even the .1%. If harming the top 1% means those in the 80th percentile “suffer” losses, then they’re going to back the 1%, which makes it a pretty good line to draw.
The people from the 80th to 90th percentile, making up ten percent of the population, accumulated ten percent of the increase in wealth. So unless you want to make an enemy of this ten percent, you have no right to criticize the fact that one percent got 40 percent. Am I reading this right?
I’m normally in sympathy with your views on these matters, but this seems misguided. Assuming that the position of just one person at the bottom of the distribution has got worse, then at some point as you count down from the top you’ll reach a gain of over 100%. Is the idea that wherever that point is, everyone above that line is the enemy? If not, why is the fact that the line arises at about the 20th percentile significant? In fact, as other commentators have pointed out, thise in the 10-20th percentiles don’t seem to be doing that much better than their fair share. The real division, it seems to me, should be between those who have to work for their livings and those who don’t – that is, to state the obvious, how we should think about today’s “working class”. This working class is likely to include most people in the 10-20th percentiles.
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