The Real Wealth Gap: Between the Rich and Super-Rich |
| The Real Wealth Gap: Between the Rich and Super-Rich Posted: 13 Apr 2012 09:51 AM PDT Forget the 99 versus the one percent. Consider the economic battle raging between the one percent and the .0001 percent.
Scott Winship of Brookings has created a fascinating study and chart showing the distances between various high-income groups. Fittingly, he uses the Dubai's Burj Khlaifa hotel – the 160-story symbol of super- wealth — as the model. As it turns out, the Burj is much more fitting to today's income structure than the traditional wealth “pyramid.” If the one percent were on the top floor of the Burj, the top 2% would be 67 floors down (showing much much richer then one percent is compared to the two percent). The top 10-percenters are on the 35th floor, or 125 floors down from the one-percenters. The median household is all the way down on the 13th floor. If the top floor is represented by the 0.01%, the distances between groups grows even greater. When the 0.01% is the top floor, the one-percenters fall 150 stories, to the 10th floor. Which means that a guy making $600,000 is stuck in the economic equivalent of a shabby little room next to the elevator with no view, no butler and way too much street noise – while the 0.01% guy is living large in the penthouse suite with his complimentary bottle of Dom next to the rose-petal bath. You can see why some one-percenters feel poor and outraged.
But wait. Even the 0.01 percenters feel class envy in this new world of Birj-like stratification. If Mark Zuckerberg's projected pre-tax income of $5 billion this year represents the top floor, then the 0.01 percenters fall close to the lobby level, while billionaire Larry Ellison falls all the way to the 18th floor. Needless to say, Larry would not be happy. What does all this tell us? That the real driver of inequality is at the very top, with a few one-time income wonders (ie Zuckerberg) that make their money from exuberant market events. As Winship writes, this extreme inequality “could simply be tangential to the lives of most people. Will Americans be better off in 2013 if Zuckerberg does not exercise any more stock options? Did the rest of us benefit from 2007 to 2009 when the share of income received by the rich fell? If not, how do we know that we were hurt when the share they received was rising?” Do you think inequality matters?
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