Having Done the Math…99% vs. 1%

The Occupy Wall Street (OWS) protest movement has embraced the concept that most of the nation’s wealth is concentrated among 1 percent of the population, and vice-versa. Using their logic, you are either a member of the 99 percent who collectively possess very little wealth, or, you belong to the wealthy 1 percent.

Critical thinking could challenge that 99 percent-1 percent premise, to at least inquire about its validity.  But that is such a broad-based concept with wide ranging implications, that challenging it requires someone to “do the math”…a lot of math.   

My brother, Phil, is a retired research scientist who has worked for Texas Instruments, Lockheed, and the State of California during his career. He understood what doing the math on such a large and important postulation entailed, and he took the time and did the work to arrive at an answer.

His thought-provoking treatise on this can be found at http://philwendt.com/?page_id=506.

The bottom line is that the major break point for income disparity in the same sense that OWS would have you understand it is not at the 99 percent-1 percent level. It is not even at the 95 percent-5 percent level. Over a 40-year study period, the dividing line is actually between the fourth and fifth quintiles, or at the 80 percent-20 percent level.

The fact that 40 years of data hew to a trend line for increasing income disparity is significant in my opinion. What OWS is complaining about is not a new or recent phenomenon, but one which has been developing inexorably for decades.

Is this a bad thing? Personally, I don’t believe it is. 

There are many reasons for income disparity and for that disparity to have followed the trend it has. But most probably, to my mind’s eye, is the fact that families strive to improve their economic situation, and to accumulate wealth during their working lifetime. 

As a result, over the past 40 years, my household has migrated UP through various levels of income and wealth accumulation. At the beginning of that period we were in the bottom quintile, and today we are much further along on our way toward the 80 percent-20 percent divide as our income peaks just prior to retirement.

To their credit or dismay, OWS offers no real solution to their main issue of income disparity. Camping in city parks across the nation and “tackling” or embracing random and disparate causes may bring a sort of Kumbayah catharsis to some of the disaffected occupying troops, but there are no legislative or programmatic initiatives coalescing among Occupy factions in various state capitals and financial or political power centers.

Having started out with a flawed premise (99 percent-1 percent), I don’t see where OWS protesters are going from here, especially from the political or economic perspectives.

The author can be contacted at chriswendt117@gmail.com