The Top 1% of Income Earners in America
Americans who earn more than $360K per year are overwhelming men.
16% of Top 1% of earners are women.
How many people are in the 1% of income earners in the U.S.?
Most assessments count household income rather than individual income. We’ll start with individual income.
For a single earner, the cutoff to be in the top 1% is $358,000.
According to Inequality.org, citing Piketty, Saez and Zucman (2016), for top earners, women are underrepresented at all the highest income levels. Just 11% of the top 0.1% of earners are women, followed by 16% of the top 1% and 27% of the top 10%.
As for household income, the picture gets complicated. The United States has 325 million people—in 160 million households, as viewed by the Internal Revenue Service. That means 1.6 million households fall into the 1 percent category.
For a US household to qualify for the top 1%, it needs to have a combined income of nearly $600,000 in 2021. ($598,000 in 2021, up from $434,454 in 2017. For the majority of top 1% households, that income will come from the husband, or the husband and wife combined.
According to The Washington Post, ‘Women earn enough to qualify for 1% status in just one of every 22 top-earning households. … The gap hasn’t narrowed for at least 20 years.”
In most ‘elite’ top-earning households, wives are not in the labor force.
In ‘elite’ households in which the husband is the primary breadwinner, fully 70% of wives are not in the labor force. When the situation is reversed, and the wife’s income puts the household in the top 1%, husbands stay home just 22% of the time. The Washington Post quotes Prof Jill Yavorsky of UNC-Charlotte (in an analysis in the American Sociological Review), that “The majority of US income gains over the past 30 years have gone to top 1 percent households … [and this] rising income inequality in the United States is largely a man’s game.” WaPo reports that ‘Men still dominate many of the highest-income professions, including finance, hedge funds and top-tier law firms.’
Yavorsky continues, “'When we talk about 'the elites’ or ‘the 1 percent’, we’re likely talking about men, not women, exercising this power in the political sphere and the economic sphere.”
“
When we talk about ‘the elites’ or ‘the 1 percent’, we’re likely talking about men, not women, exercising this power in the political sphere and the economic sphere.
”
For a man to be in the top 1% of all male income earners, he needs to make $428,500 (up from $371,000 in 2018). For a woman to be in the top 1% of all female earners, she needs to make $263,600 (up from $235,000 in 2018).
[Note: The sources and methodology on the income percentile calculators are from: *Sarah Flood, Miriam King, Renae Rodgers, Steven Ruggles, and J. Robert Warren. Integrated Public Use Microdata Series, Current Population Survey: Version 6.0 [dataset]. Minneapolis, MN: IPUMS, 2018. https://doi.org/10.18128/D030.V6.0 Updated: *Sarah Flood, Miriam King, Renae Rodgers, Steven Ruggles and J. Robert Warren. Integrated Public Use Microdata Series, Curhttps:/Sarah Flood, Miriam King, Renae Rodgers, Steven Ruggles, J. Robert Warren and Michael Westberry. Integrated Public Use Microdata Series, Current Population Survey: Version 9.0 [dataset]. Minneapolis, MN: IPUMS, 2021. https://doi.org/10.18128/D030.V9.0]
Professor Jill Yavorsky at University of North Carolina, along with co-authors Lisa Keister of Duke, Yue Qian of University of British Columbia and Michael Nau of Ohio State released a study of gender patterns and income from 20 years of Surveys of Consumer Finances. Yavorsky, et al find that 7 in 10 with income in the top 1% have stay-at-home spouses. This support at home allows a high-earning career that requires long hours, travel, weekend work, a flexible schedule and the always-on culture of start-ups, finance, tech and other fields dominated by men at the top.
According to Quartz at Work:
This power dynamic between the couple matters, she explains, not only as one more measure of the gender pay gap, and the effects of long working hours and a demanding work culture on women’s roles in the workforce, but because of the extremely disproportionate social, political, and cultural clout of the 1%.
Indirect evidence suggests that the way wealthy couples view policies, and spend on political or philanthropic donations, may vary along gender lines, but “if you’re a stay-at-home spouse, or a non-breadwinning spouse, you likely do not have the same kind of power and influence within a household,” Yavorsky says.
Yavorsky’s research finds the bar for entry into the top 1% of households is a combined $845,000 in 2016 dollars. This group earns or receives 24% of all US income and sports an average household income of $2.3 million. As a group, the main breadwinners were married men in hetero-marriages, with women being the main breadwinners in just 5% of the top 1% households. In most of the top 1%, a wife’s income was irrelevant to whether or not the household landed in the top 1%; her husband’s income was sufficient to be one-percenters.
In most of the top 1%, a wife’s income was irrelevant to whether or not the household landed in the top 1%; her husband’s income was sufficient to be one-percenters.
The study identifies the two routes that overlap to create an extremely lucrative career: namely advanced education and entrepreneurship. Men benefit from each and both of these, and more than women do. Women’s advanced degrees do not translate into the types of earnings their grad school and professional school male peers enjoy, say in banking or law, medicine or engineering, often due to glass ceiling issues and other choices made throughout a career (e.g., relocating for a career, fewer opportunities for women in the top-drawer law firms, differing incomes for various medical specialties, etc.). Women face tremendous obstacles staring businesses, as well, such as difficulty attracting venture capital funding, getting bank loans, and other issues.
Yakorsky et al argue that diversity within the 1% would be a benefit to all of society, given the “extremely disproportionate social, political, and cultural clout of the 1%.” Prof Yakorsky, in a separate interview with CNBC in 2019, stated that, “If women’s income is inconsequential in these households, then men are dominating the economy, [and] it’s primarily men’s interests being reflected in this influence, which, as other research indicates, can differ from women’s interests.”
The US lags behind a number of other countries (Spain, Australia, Italy, NZ, Canada, the UK) in share of income earned by women. Also, men earn more than women in every US industry, in every racial group (the gender gap is most pronounced among Asian-Americans), and is especially pronounced in the highest paying fields, such as finance.
What will it take to get women in the Power Percentage of being half the top income earners in America?