Anger at the top 1% of earners has become a well-established theme across the country, but it's still good to report that the vilified ranks of the very rich include some scientists and technology professionals. That's according to a recent paper
by Jon Bakija of Williams College, Adam Cole of the U.S. Treasury Department, and Bradley T. Heim of Indiana University that analyzes income tax returns to determine the occupations and incomes of those enjoying the biggest paydays.
In 2005, the authors reveal, you'd have needed to make at least $94,000, measured in 2007 dollars and excluding capital gains, to squeak into the top 10% of earners, $129,00 to qualify for the top 5%, $295,000 for the top 1%, and $1,246,000 to count among the top 0.1%. This may, of course, present a distorted picture of the nation's income distribution because, as Republican Presidential candidate Mitt Romney's recently released tax return shows, excluding capital gains cuts out some very major incomes.
So where do science and tech types fit into this picture? At every level of affluence, the authors found. Using 2005 figures, and still excluding capital gains, they note that "computer, math, engineering and technical people" (excluding Wall Street "quants," or quantitative financial experts) constituted 4.6% of the top 1% and 2.9% of the top 0.1%. If capital gains are counted in, those figures are 4.2% and 3.1%, respectively.
In that same year, "professors and scientists" accounted for 1.8% of the top 1%, if capital gains were excluded. At this income level, they narrowly edge out "arts, media and sports" figures, who weighed in at 1.6%. In the top 0.1% that year, however, again excluding capital gains, the scientists and professors constituted only 0.9%, trailing far behind athletes, actors, and rock stars, who constituted 3%. With capital gains counted in, professors and scientists were 1.8% of the top 1% and 1.2% of the top 0.1%, again way behind the assorted sports and entertainment celebrities.
So who are these ultra-affluent geeks? The paper doesn't say. It does note, however, that "the incomes of managers, executives, financial professionals, and technical professionals who are in the top 0.1%...are...very sensitive to stock market fluctuations," suggesting that they own many shares in companies.
As to the professors and scientists, the paper gives no clue. In her recent book, How Economics Shapes Science,
however, economist Paula Stephan discusses the effect of "blockbuster" patents on the incomes of a small number of inventive faculty members. She estimates that in 2004, some 400 professors at about 50 U.S.institutions divided up $650 million in royalties from "megapatents" that each produce a million dollars a year or more. "Indeed, on more than half of the research-intensive compuses in the United States," she writes, "there are a handful of faculty who earn more than than their salaries each year from royalties"--and some, obviously, considerably more.