National / International News

Making it to the 1 percent is more common than you think

Marketplace - American Public Media - Fri, 2014-05-02 12:09

The "1 percent" and the "99 percent" have become household phrases in the last few years. But in the course of moving discussions of income distribution percentiles beyond economic text books and in to the popular discourse of sound bites and protest signs, the nuances can get lost. Which brings us to some interesting new research about the 1 percent, discussed in a recent book called “Chasing the American Dream.” 

Back when the Occupy Wall Street movement was fond of chanting “We are the 99 percent” the book’s co-author, Mark Rank, got curious about some of the assumptions buried in that chant. Who exactly is the 99 percent? What’s their relationship to that remaining, increasingly notorious 1 percent?

The whole debate struck Rank as very us versus them. “There’s this image out there that those two groups do not cross over -- that they're static groups,” he says. 

Rank is a professor of social welfare at Washington University in St. Louis, and so he had the tools to see if this static image of the 1 percent versus everyone else was true. He and his co-author, Thomas Hirschl of Cornell, combed through four decades of survey data that followed the lives of thousands of Americans to see how much money they made each year.  And what they found surprised them.

The top-earners club isn’t quite the bastioned, unreachable world it's been painted out to be. “There actually is this really strong sense of fluidity in terms of folks entering the top income percentiles,” Rank says.  According to Rank and Hirschl’s research, one in five Americans are in the 2 percent at some point in their lives. And one in eight spend at least a year in the one percent.

So who are these visitors to the 1 percent? Some might be your neighbors.

Barrett Yeretsian, 34, lives in the southern California suburb of Glendale, CA in a totally non-descript condo — the same one he grew up in. Yeretsian says growing up, he was solidly middle class. His mom, a widow, owned an Armenian book store in Los Angeles, and money was sometimes tight. Scholarships and help from family got him through college at UCLA.

When he graduated, he turned down acceptance at two top law schools in favor of trying to make it in the music industry, as a song-writer and producer. After years almost making it, a few years ago, a song he wrote in his bedroom, became this smash hit, Jar of Hearts, after it debuted on the reality show “So You Think You Can Dance.”

 

Literally over night, “everything changed,” Yeretsian says. Including his income.  That year he catapulted in to the 1 percent. But, he says, tries not to live like he has. “Keep the overhead low. Enjoy life,” is his philosophy. (He was a philosophy major in college, and traces his non-lavish lifestyle back to reading Thoreau’s Walden.)

“Don't get me wrong, I go to Hawaii every year,” he says. And he’s bought several rental properties as investments. “Financially, I’m in a comfortable position. I think that's the big difference is you have that comfort.” 

Jason Laan is another recent arrival to the 1 percent, who made the leap after his iPhone app made it big. For him, the surprising thing about being at the top is that it doesn't always feel like the top. 

“The 1 percenters we think of spend $10,000 on a commode,” Laan says. “If you make $340,000” — the approximate household income needed to break into the 1 percent in the last few years — “you're not going to waste money on something like that.”

Laan says the year he made enough to qualify as a “1 percenter,” he asked his accountant about whether he should consider trying to take advantage of tax loop holes or off-shore accounts, to protect some of his money. His accountant laughed and told him he wasn't rich enough.

“You’re not connected enough to try to hide your assets in such a way,” Laan recalls his accountant saying. “You can’t afford the overhead.” 

Another thing about the latest research on the 1 percent from Rank and Hirschl: While one in eight Americans might visit the 1 percent for a year, only one in a hundred stay there for a decade or more.

How much you have to earn in order to make it into the "1 percent" by year.

Year Household
Income (USD) 1967 171,737 1968 191,151 1969 193,437 1970 191,119 1971 200,383 1972 217,578 1973 226,942 1974 222,524 1975 213,235 1976 234,114 1977 217,740 1978 229,473 1979 228,014 1980 222,287 1981 216,483 1982 211,998 1983 219,320 1984 235,775 1985 229,477 1986 240,388 1987 254,770 1988 277,464 1989 257,154 1990 257,815 1991 248,205 1992 262,715 1993 333,888 1994 308,292 1995 301,423 1996 320,269 1998 364,160 2000 440,253 2002 363,702 2004 362,315 2006 379,511 2008 376,608 2010 332,300

Source: Mark R. Rank, Thomas A. Hirschl, Is it just the One Percent, or is Affluence a Normal Life Course Event?, Cornell Univeristy

Making it to the 1 percent is more common than you think

Marketplace - American Public Media - Fri, 2014-05-02 12:09

The "1 percent" and the "99 percent" have become household phrases in the last few years. But in the course of moving discussions of income distribution percentiles beyond economic text books and in to the popular discourse of sound bites and protest signs, the nuances can get lost. Which brings us to some interesting new research about the “1 percent,” discussed in a recent book called “Chasing the American Dream.” 

Back when the Occupy Wall Street movement was fond of chanting “we are the 99 percent” the book’s co-author, Mark Rank, got curious about some of the assumptions buried in that chant. Who exactly isthe 99 percent? What’s their relationship to that remaining, increasingly notorious 1 percent?

The whole debate struck Rank as very us versus them. “There’s this image out there that those two groups do not cross over -- that they're static groups,” he says. 

Rank is a professor of social welfare at Washington University, and so he the tools to see if this static image of the 1 percent versus everyone else was true. He and his co-author, Thomas Hirschl of Cornell, combed through four decades of survey data that followed the lives of thousands of Americans to see how much money they made each year.  And what they found surprised them.

The top-earners club isn’t quite the bastioned, unreachable world it's been painted out to be. “There actually is this really strong sense of fluidity in terms of folks entering the top income percentiles,” Rank says.  According to Rank and Hirschl’s research, one in five Americans are in the 2 percent at some point in their lives. And one in eight spend at least a year in the one percent.

So who are these visitors to the one percent? Some might be your neighbors.

Barrett Yeretsian, 34, lives in the southern California suburb of Glendale, CA in a totally non-descript condo — the same one he grew up in. Yeretsian says growing up, he was solidly middle class. His mom, a widow, owned an Armenian book store in Los Angeles, and money was sometimes tight. Scholarships and help from family got him through college at UCLA.

When he graduated, he turned down acceptance at two top law schools in favor of trying to make it in the music industry, as a song-writer and producer. After years almost making it, a few years ago, a song he wrote in his bedroom, became this smash hit, Jar of Hearts, after it debuted on the reality show “So You Think You Can Dance.”

 

Literally over night, “everything changed,” Yeretsian says. Including his income.  That year he catapulted in to the 1 percent. But, he says, tries not to live like he has. “Keep the overhead low. Enjoy life,” is his philosophy. (He was a philosophy major in college, and traces his non-lavish lifestyle back to reading Thoreau’s Walden.)

“Don't get me wrong, I go to Hawaii every year,” he says. And he’s bought several rental properties as investments. “Financially, I’m in a comfortable position. I think that's the big difference is you have that comfort.” 

Jason Laan is another recent arrival to the 1 percent, who made the leap after his iphone app made it big. For him, the surprising thing about being at the top is that it doesn't always feel like the top. 

“The 1 percenters we think of spend $10,000 on a commode,” Laan says. “If you make $340,000” — the approximate household income needed to break into the 1 percent in the last few years — “you're not going to waste money on something like that.”

Laan says the year he made enough to qualify as a “1 percenter,” he asked his accountant about whether he should consider trying to take advantage of tax loop holes or off-shore accounts, to protect some of his money. His accountant laughed and told him he wasn't rich enough.

“You’re not connected enough to try to hide your assets in such a way,” Laan recalls his accountant saying. “You can’t afford the overhead.” 

Another thing about the latest research on the 1 percent from Rank and Hirschl: While one in eight Americans might visit the 1 percent for a year, only one in a hundred stay there for a decade or more.

How much you have to earn in order to make it into the "1 percent" by year.

Year Household
Income (USD) 1967 171,737 1968 191,151 1969 193,437 1970 191,119 1971 200,383 1972 217,578 1973 226,942 1974 222,524 1975 213,235 1976 234,114 1977 217,740 1978 229,473 1979 228,014 1980 222,287 1981 216,483 1982 211,998 1983 219,320 1984 235,775 1985 229,477 1986 240,388 1987 254,770 1988 277,464 1989 257,154 1990 257,815 1991 248,205 1992 262,715 1993 333,888 1994 308,292 1995 301,423 1996 320,269 1998 364,160 2000 440,253 2002 363,702 2004 362,315 2006 379,511 2008 376,608 2010 332,300

Source: Mark R. Rank, Thomas A. Hirschl, Is it just the One Percent, or is Affluence a Normal Life Course Event?, Cornell Univeristy

Positive April Jobs Report Blows Past Expectations

NPR News - Fri, 2014-05-02 12:08

The April jobs report shows a labor market on the mend. Employers added 288,000 jobs, and the unemployment rate fell to 6.3 percent, partly because of a decline in the size of the labor force.

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In South Sudan, Peace Sought In Bringing Two Leaders Together

NPR News - Fri, 2014-05-02 12:08

While on a one-day visit to South Sudan's capital, Secretary of State John Kerry said the country's recent conflict could devolve into genocide. He and regional leaders voiced support for a U.N.-sanctioned force to keep civilians safe.

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Out Of White House Meeting, Obama And Merkel Emerge United On Russia

NPR News - Fri, 2014-05-02 12:08

President Obama met with German Chancellor Angela Merkel at the White House Friday, in an effort to present a united front on the Ukrainian crisis. The pair held a joint press conference discussing the prospect of further sanctions on Russia.

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An End In Sight For Siege Of Homs, As Syrian Rebels Plot Retreat

NPR News - Fri, 2014-05-02 12:08

A deal is in the works to draw the long battle at Homs to a close. The deal would let the rebel fighters evacuate their stronghold in the Syrian city, at which point the Syrian government would enter.

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First American Case Of MERS Reported In Indiana

NPR News - Fri, 2014-05-02 12:08

The Centers for Disease Control and Prevention says the first case of Middle Eastern Respiratory Virus, or MERS, has been confirmed in the U.S. A health care worker in Indiana who recently returned from Saudi Arabia has been hospitalized and is critical condition.

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Amid New Details Of Botched Execution, A Timeline Of Final Hours

NPR News - Fri, 2014-05-02 12:08

Details of the botched execution of Oklahoma inmate Clayton Lockett reveal a procedure rife with problems. A timeline released by the state's Department of Corrections offers unsettling insight into the day of Lockett's death.

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On Auction Block: Draft Of 'Like A Rolling Stone,' And Some Doodles

NPR News - Fri, 2014-05-02 12:08

Sotheby's will be auctioning what it claims to be the only known surviving draft of the final lyrics for Bob Dylan's "Like a Rolling Stone," as part of the auction house's rock and pop music sale.

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Police given more time to quiz Adams

BBC - Fri, 2014-05-02 11:51
Police in Northern Ireland are given more time to question Sinn Fein leader Gerry Adams in connection with the 1972 murder of Jean McConville.

Google Maps 'renames Basingstoke'

BBC - Fri, 2014-05-02 11:47
Basingstoke is renamed by Google Maps as "Town Centre".

Gunmen storm Libyan security HQ

BBC - Fri, 2014-05-02 11:16
Gunmen in the Libyan city of Benghazi have raided a security headquarters, sparking clashes in which at least nine people died, officials say.

US House to open new Benghazi inquiry

BBC - Fri, 2014-05-02 11:00
The US House speaker says he will convene a special committee to investigate the White House response to the 2012 attack on the US consulate in Libya.

Teens arrested in school murder plot

BBC - Fri, 2014-05-02 10:54
Two schoolgirls are arrested on suspicion of conspiracy to commit murder following an incident at a school in Caerphilly county.

Urban Greengrocers Are Back, To Serve Big-Spending Locavores

NPR News - Fri, 2014-05-02 10:49

Small independent grocery stores are a growing trend in urban areas. They are like the shops where gran and gramps used to buy their produce, but they have been updated for the modern foodie.

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Don't Count On Travel Insurance To Cover Mental Health

NPR News - Fri, 2014-05-02 10:44

People buy travel insurance so they won't lose a lot of money if they become ill and can't travel. But for most policies, "ill" doesn't include mental illness. Some travelers discover that too late.

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House Will Consider Select Committee To Investigate Benghazi Attacks

NPR News - Fri, 2014-05-02 10:39

At the same time, Rep. Darrell Issa, the Republican chairman of the House oversight committee, issued a subpoena to force Secretary of State John Kerry to testify about the attacks.

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In the gym at 6am: How to do the 'impossible job'

BBC - Fri, 2014-05-02 10:24
How Tony Pulis led Crystal Palace from Premier League relegation-certainties to mid-table comfort in record-breaking fashion

'Many dead' in Ukraine offensive

BBC - Fri, 2014-05-02 10:21
Many rebels have been killed in a government offensive in east Ukraine, acting President Oleksandr Turchynov says, amid heavy clashes in the southern city of Odessa.

VIDEO: British troops arrive in Estonia

BBC - Fri, 2014-05-02 10:17
Britain has joined with other NATO countries to provide extra security for Latvia, Estonia and Lithuania - all in response to the crisis in Ukraine.
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