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February 9, 2005
Making the Top 1%
J. Howard Crews, in a letter to the editor of the Union Tribune today, makes an error with regards to who constitutes the top 1% of income earners. I point it out because the data he criticizes I used in a post a few months back. Crews states:
I must dispute the information given by Jerry Grossman (Letters, Jan. 27) that those making $293,415 and above constitute the top 1 percent of U.S. wage earners. This low end is nowhere near being in the top 1 percent. One must make at least $1.2 million annually to be in the top percentile according to a report by the nonpartisan Congressional Budget Office published April 9, 2004.
This is incorrect. The report Crews cites actually shows a lower figure ($238,000 in Table 1C "Minimum Adjusted Income") as the level above which individuals enter the top 1% of wage earners.
The figures Crews uses are average income figures for those in the top 1% (again in Table 1C, "Average Income"). So his figure reflects taking the average income of everyone who makes it to at least that minimum level, from the guy that makes a penny over that cutoff up to Bill Gates who sells $1 Billion worth of stock.
Also, not sure why Crews used it but it looks like the $1.2 million average is from 1999. In 2000 this average income for the top 1% of earners jumped to $1.3 million, while in 2001 (the last year of data) it fell to $1.05 million.
Posted by Peter Mork at February 9, 2005 8:47 AM
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