You've probably been laboring under the misapprehension that the rich are doing just fine. And I admit it, I have promulgated that view over and over again here at DOTE. But it's not true. I've been misleading you. Some of the rich don't feel very rich at all, especially when they compare themselves to people who are much richer than they are.
We have a lot of problems in the United States—many people can't afford to buy food or pay their energy bills, 77% of them live paycheck to paycheck, and 75% of them may not be able to raise $2000 in an emergency—but the rich not feeling rich enough is surely something we need to worry a lot about right now.
Catherine Rampell at the New York Times' Economix blog updates us on this tragic situation.
The Tax Policy Center has updated its figures on the income distribution in America, which we’d previously written about in a post about why most rich people don’t feel very rich. They have now crunched income levels for every single percentile, and the numbers refer to 2011 rather than 2010. So I’ve updated my chart on this subject.
The graph below shows how much income is earned by a household at any given percentile in the income distribution, based on these new numbers for 2011:
Catherine explains the problem below. I've combined text from her original article (linked-in above) and this recent update.
But there seems to be a broader fissure underlying this discussion: why don’t people at the 90th percentile of the income distribution feel particularly rich?
The answer is simple: because any Americans who are richer than this cohort are so much richer...
Incomes grow much, much faster at the top end of the income distribution than in the middle or at the bottom end [graph above]. That is, the disparity in income between one percentile and a consecutive percentile is bigger among the very rich.
For example, the difference in income between a household at the 50th percentile and a household at the 51st percentile is $1,237 ($42,327 versus $43,564). But the difference in incomes between a household at the 98th percentile and the 99th percentile is $146,118 ($360,435 jumps up to $506,553).
The gaps become even wider at the extreme top of the income ladder: A family at the 99.5th percentile makes $815,868; its neighbor at the 99.9th percentile makes more than double that, at $2,075,574 a year.
In fact much of the rise in inequality over the last few decades has been because of the increasing inequality isolated among the very top members of the income distribution, as America’s wealthiest have pulled further and further away from their slightly less wealthy peers.
This is outrageous. It's just not fair. Imagine being in their shoes. Suppose you're living in Midtown Manhatten, where the mean household income is $434,824, or you're living in Buell Mansion-Cherry Hills Park in Cherry Hills Village south of Denver, where the median income is $582,129. Your annual income is right at the 98th percentile—$360,435. But your next door neighbor's income is twice that much. And your house is just as big as his, but he's got double the income to keep it up with! He installs a new jacuzzi every year. Your jacuzzi is a few years old and fading fast. And don't even start talking about swimming pools, tennis courts and weight rooms.
And that's merely income. You know how it is—money just flies out the window! Where does it all go? What about personal wealth? Yahoo's Business Insider told it the way it is in You Won't Feel Rich Until You Have $7,500,000.
Everyone has a number. It's a monetary value; if you reach it, you'll feel like you are rich and can retire. This is lovingly referred to as F.U. money.
But that number has been creeping higher and higher. Nowadays, just being a millionaire doesn't seem to cut it.
According to The New York Times, people in the top 10% of earners don't feel like they're making a lot. They only consider themselves to be middle to upper-middle class citizens...
Fidelity Investments conducted a study on wealth, and the results seem to agree. Just being a millionaire isn't enough.
After surveying 1,000 households with an average of $3.5 million investable assets, 42% said they didn't feel rich. So, how much money would it take for them to feel secure? The response: about $7,500,000...
"Wealth is relative, and to some extent the more you have the more you realize how much more you need," said Sanjiv Mirchandani, president of National Financial, a Fidelity subsidiary in response to the survey.
So we ask, what's your number?
What's my F.U money? Do you mean my fuck you number? The comfortably well-off or filthy rich have already said fuck you to 90% of Americans. So I guess you must mean the magic number where I get to say, were I in their position, fuck you to the rest, the very wealthiest among us.
Pick a number from among the integers. Any number will do.
What I don't get are the teabaggers who will screech like scalded cats at any suggestion that this situation is unhealthy or undesirable.
Posted by: Loveandlight | 05/27/2011 at 10:52 AM