One of the best things coming out of the 99 Percenters movement is an increasing public awareness of exactly who gets how much in our increasingly unequal nation. A number of interactive calculators have popped up on the internet and I’d recommend the Wall Street Journal’s “What Percent Are You?” site for a quick calculation of your household’s approximate position on our extremely unequal income ladder. The calculator advises that “an annual salary above $506,000 puts you in the top 1%, while you need to make less than $2,500 a year to be in the bottom 1%.”
Ignorance and misinformation about exactly where you are in the economic hierarchy can lead to poor decision-making in voting and policy-making. I’ve seen studies that show many Americans on the bottom half of the scale mistakenly think they are more affluent than they are, and are even more wrong about their likelihood to ever make it to the top echelons. As a result, they may actually oppose increasing tax rates on the top tier because they imagine they are in it or close to it, or destined for it. Similarly, I’ve seen studies that show many households at the upper echelons, perhaps because most of the people they hang out with also have second homes in Florida, don’t think they are rich. A recent New York Times story headlined “Everyone is Middle Class, Right”” summarizes a study that documents these erroneous impressions. Note the bar graphs that show how wrong people are about their status, on both the top half and bottom half.
Maybe if more wealthy folks knew exactly how many Americans ranked below them, they wouldn’t be so hostile to paying more for the social contract. And if more voters knew how far behind the top tier they are, the less they would empathize with that advantage. Knowledge, as they say, is power.
One last point. The Wall Street Journal’s “What Percent Are You? calculator is part of its regular feature, “The Wealth Report,” a blog by senior writer Robert Frank. Frank’s blogs are even-handed, often counter-intuitive and progressively edgy and funny, without being strident.