Myths of the 1 Percent: What Puts People at the Top

Almost all of the growth in top American earners has come from just three economic sectors:

  1. professional services,
  2. finance and insurance, and
  3. health care,

groups that tend to benefit from regulatory barriers that shelter them from competition.

The groups that have contributed the most people to the 1 percent since 1980 are:

  • physicians;
  • executives,
  • managers,
  • sales supervisors, and
  • analysts working in the financial sectors; and
  • professional and legal service industry executives,
  • managers,
  • lawyers,
  • consultants and
  • sales representatives.

.. The United States also stands out in terms of how much money its elite professionals earn relative to the median worker. Workers at the 90th percentile of the income distribution for professionals make 3.5 times the earnings of the typical (median) worker in all occupations in the United States. Only Mexico and Israel, which have very high inequality, compensate professionals so disproportionately.

.. Problems cited by these analysts include subsidies for the financial sector’s risk-taking; overprotection of software and pharmaceutical patents; the escalation of land-use controls that drive up rents in desirable metropolitan areas; favoritism toward market incumbents via state occupational licensing regulations (for example, associations representing lawyers, doctors and dentists that block efforts allowing paraprofessionals to provide routine services at a lower price without their supervision).