This is interesting. What the graph shows is the relative income of the top 1% of 400 earners in the US (that’s the tall green bar, all the way to the right) compared to the other 99.99% of us (that’s the tiny green bars all the way at the bottom – scroll down, and down, and down….).
Click on the image to see a larger version of same. Visit the source, this page at rationalrevolution.net, and scroll to near the bottom to see more info about the data. (The entire page is well worth reading, with a lot of information about income and who pays taxes).
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I believe the green bar all the way to the right is the top 400, not the top %1. And in this case, I’m not really sure what the graph is supposed to be showing. The top %1 is, what, a million people? So, yes, if you look at the average of the top million versus the average of the top 400, you get a much much smaller number.
Whoops! Quite right. Thanks for the correction.
Clive Cook made a similar observation in the September The Atlantic Monthly. Referring to a 1971 book by Dutch economist Jan Penn, Crook describes observing a parade of everyone in the economy walking past, their heights relative to their earnings with the lowest earners in front. The parade starts with the lowest 10th percentile standing 7 inches tall. Not until 45 minutes in do the paraders look the observers in the eye(mean income). The rest of the parade lasts 6 minutes, ending with individuals(99.995%) standing 933 feet tall.
http://www.theatlantic.com/doc/prem/200609/crook-inequality
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It’s worth noting that income inequality is a pre-requisite for wealth mobility.
In other words–if incomes do not vary much, inherited wealth and status are more important; societies where it is possible to :rise to the top from the bottom” must have very unequal incomes. (Note, unequal incomes are necessary, not sufficient, for mobility in wealth.)