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Wisconsin IDEA
Insight • Data • Economics • Analysis
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What Defines the Top 1% of Income?
Income Earners Making $462,926 or More Make Up the Top 1% within Wisconsin
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Over the last several decades, a common frustration with the U.S. economy is that much of the benefit of economic growth flows to individuals at the highest income levels. While evidence of rising income inequality across the U.S. and Wisconsin is solid, there remains a lack of understanding about how changing income thresholds determine high incomes. If the concerns are true and much of the economic growth is going to the top one percent, what defines the top one percent? Another way to consider this question is to ask how much income is needed to be in the top one percent.
Using data compiled by Mark Frank at Sam Houston State University, we can track the income threshold for the top one percent in Wisconsin and the U.S. from 1917 to 2020. After adjusting for inflation, an income of $110,892 was required to be in the top one percent in 1917 in the U.S., while the threshold for Wisconsin was noticeably lower at $77,339. Over time, these threshold levels have consistently increased. By 2020, the threshold had risen to $541,277 for the U.S. (an increase of 388.1%) and $462,926 for Wisconsin (an increase of 498.6%).
In 1917, 17.7% of total income flowed to the top one percent at the national level, and 14.2% of Wisconsin’s income flowed to the top one percent. By 2020, the share of income flowing to the top one percent nationally increased to 23.6%, and in Wisconsin, it increased to 17.2%. There are two reasons for this increase. First, as the economy grows, overall income increases, and consequently, the thresholds for high income rise as well. Second, there is evidence that a growing share of total income is going to the top one percent.
Whether the highest income households (IRS tax filers) are disproportionately benefiting from economic growth is subject to interpretation. The trend of increasing income thresholds and a larger share of income flowing to the top one percent underscores the ongoing concerns about income inequality. But is a disappropriate share economic growth is going to those in the highest incomes is subject to interpretation.
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Econ Quiz: Post-Graduation Career Paths
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The expansion of the state’s broadband fiber optic network, the continued growth in the number of wind farms, and the ongoing need to maintain our electrical grid means that there are good career paths for graduates who are interested in occupations related to our electrical and information infrastructure.
The expansion of broadband fiber across the state means that internet service providers are actively seeking to train and hire technicians to install, troubleshoot, repair, and maintain fiber optic cable. The Bureau of Labor Statistics (BLS) lists $59,180 as the average telecommunications line installer wage in Wisconsin, with the top 10% of wage earners in this occupation earning at least $79,750 annually.
Electrical line installers and repairers, who are typically employed by utilities, earn an average of $98,640 in Wisconsin, with the top 10% of wage earners in this category earning at least $114,900 annually. Linemen typically begin their career training as apprentices, working their way up to journeyman status. According to the BLS, the lowest 10% of wage earners in this occupation earn about $34.41 per hour, or roughly $71,580 annually.
Wind farms are popping up across the state. The average wind turbine service technician earns $70,230 annually in Wisconsin, with the top 10% of earners bringing in at least $83,560 annually.
That brings us to today’s question. Roughly 3,150 Wisconsin residents are employed in these occupations. Rank each from lowest to highest in terms of people employed in each occupation.
A. Fiber optic installers and repairers
B. Utility linemen
C. Wind turbine service technicians
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Wisconsin’s First Connecting Entrepreneurial Communities Conference
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Between May 30-31, over two hundred rural economic developers, community leaders, and entrepreneurs descended upon Platteville, WI, a small town in southwestern Wisconsin, population of 11,840, for Wisconsin’s first Connecting Entrepreneurial Communities (CEC) Conference. Known as a conference “about small towns, for small towns,” the CEC conference offers programming, discussion, and networking for stakeholders in Wisconsin’s rural business development. Other Midwestern states such as Michigan, Minnesota, Missouri, and Nebraska hold the CEC Conference on an annual basis as part of their rural economic development strategy. Last year the Wisconsin Economic Development Corporation awarded Extension a grant to bring the CEC Conference to Wisconsin as well.
For Wisconsin’s first conference, Extension invited four rural communities in Wisconsin to apply to host the event. To qualify to host the conference, communities needed to have a population below 15,000, a vibrant small business ecosystem, proximate hotel space to accommodate 200+ conference attendees, and community members willing to do extensive preparations for the conference. A statewide steering committee comprised of members from Extension, Office of Rural Prosperity, Institute for Business and Entrepreneurship, and Wisconsin Community Action Program selected Platteville as the 2024 host, impressed by the enthusiasm of its team, the number of local organizations willing to contribute to the conference, and its location in an area of the state with great economic development potential, the Driftless Region.
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How Ready are Owners for Business Succession and Transition?
Wednesday, July 31, 2024 | 12:00 pm - 1:00 pm (CST)
Business Succession and Transition (BST) is the process of preparing for and transferring business leadership and ownership. This is a critical issue for baby boomer retirements as 55 plus owners hold approximately 50 percent of businesses in Minnesota and the United States.
This webinar will share findings from a recent survey of small businesses in Minnesota that explored business owner awareness, attitudes, aspirations, and preparedness for transferring their business when the time comes. Join us for a free virtual webinar as we discuss the importance of business succession and transition planning and highlight what community economic development practitioners can do to support small businesses with guest presenters, Michael Darger.
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Business Owners of Color in Wisconsin: Trends & Outcomes
In recent years Wisconsin has seen massive spikes in business ownership among nonwhite entrepreneurs yet the state continues to have an overall low number of businesses owned by people of color. These findings are among those compiled in a new report “Business Owners of Color in Wisconsin: Representation, Profitability, and Growth”. This webinar focuses on the trends and outcomes for business owners of color in Wisconsin.
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(Capital Times - 6/15/2024)
(Wisconsin Newspaper Association - 5/28/2024)
(Public News Service - 5/10/2024)
(Ashland Daily Press - 4/1/2024)
(SolarCell USA - 3/28/2024)
(WSAW-TV - 3/27/2024)
(The Daily Cardinal - 3/21/2024)
(Wisconsin Public Radio - 3/1/2024)
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Equal Employment Opportunity & Affirmative Action Statements
An EEO/AA employer, the University of Wisconsin-Madison Division of Extension provides equal opportunities in employment and programming, including Title VI, Title IX, the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act requirements. Please make requests for reasonable accommodations to ensure equal access to our educational programs as early as possible preceding the scheduled program, service, or activity.
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