What jobs do the 1% have? by Bajika, Cole, and Heim
BCH and the US government did all the work here. My only contribution was to highlight
professions I didn’t expect to see like pilot, farmer, government, teacher
some “standard narratives”:
the one about “lawyers and doctors”
(I don’t know why these two get grouped together, since one works in abstractions and the other works in gore…but whatever, that is a narrative)
the one about “study hard and you’ll get ahead” (scientists, professors, computer, maths)
and “real estate developers”
Obviously the top 1.5M earners aren’t important to the exclusion of the other 311M Estadounidenses, the 145M employed Estadounidenses, or everyone else.
Equally obvious is that
(some lawyerly deeds are more lucrative than others … same for doctors.)
Still, if you’re
choosing a career
thinking about social justice
trying to understand how the world works
then you might want to find out about rich people. It might be better to do so with, you know, actual facts, rather than for example listening to a bunch of programmers b*tch about how much money lawyers and doctors make.
Back to Bajika Cole & Heim. Why is it that this basic information wasn’t known? BCH, Pikkety Saez, and a few others who have bothered to parse data to answer simple questions seem to get fairly good citations. Are economics researchers so bent on complicated research that they won’t “arb” citations by doing something a non-PhD could do?
It is well known that the share of US income going to the top percentiles has increased dramatically over 1986–2006. Piketty and Saez found that the top ¹⁄1000’s share of pre-tax income (ex cap gains) in the United States that was received by the top ¹⁄1000 rose from 2.2% to 8.0%.
But we don’t know what these people typically do for a living. Kaplan and Rauh (2010) looked through publicly-available information on top executives of publicly-traded firms, financial professionals, law partners, and professional athletes and celebrities. Despite making various extrapolations beyond what is directly available in publicly-available data sources, they were only able to identify the occupations of 17% of the top ¹⁄1000 of income earners.
We tabulated individual income tax return data from the U.S.Treasury Department on what share of top income earners work in each type of occupation. Through this method we are able to account for the occupations of almost all top earners – for example, for over 99% of primary taxpayers in the top ¹⁄1000.
(I liberally edited without  or ….)
They also looked at spouses of the well-paid, computed income shares, computed growth rates, and broke down the incomes into
1% ex ½% (rank 1,500,000–750,000)
½% ex 0.1% (rank 750,000–150,000)
0.1% (rank 150,000–1)
. All of this is at the end of the PDF, after the bibliography.
Anyway let’s give BCH a hand for providing us with useful information.
and many other consejos by successful people who lazily bridge between their personal road to success and what they’re telling to an indistinct “you”. They actually mean “I think I worked hard and I think I was kind and that’s why I think I deserve the good things that happened to me”, rather than “I know enough about you to advise you and this advice actually fits you”.
But the founder of Wikipedia has chosen advice related to (a) making money and (b) other people trying to get you to give it to them. Maybe it’s his experience with diverse Wikipedians that helps him think outside the rich-person bubble?
In my experience, costs are easier to control than revenues.
Wales’ advice to young people is also similar to advice my great-grandfather gave to my grandfather about work and money.
And it’s similar to my favourite equation from economics, which I summarise as:
I know many of you tumblr readers are young and some of you are interested in hearing advice from older people. If you read Wales’, let me know what you think?
I cringe whenever an old person asks a young person "What do you want to do in life?"As if the answer could ever be simple. I’m sure I can’t remember everything I ever thought I might want to do but failed to. (And I’d guess it’s the same for most people.) Each of the above represents a potential alternative history now, and at the time, a superposition.
(As I tried to submit this to @pastabagel, I saw an ad by an institute of higher learning suggesting that I further my career by giving them money. A nice coincidence made possible by the fact that ads for higher degrees are more ubiquitous than weight-loss ads.)
(Beware: some of the images beyond “Read More” are violent.)
the tradeoff between work, leisure, and wealth. That idea as well is symplectic. And many other such tradeoffs ∃. Symplecticity is the theoretical basis of all budget constraints. It’s another way of talking about all the tradeoffs that make choice meaningful and also unavoidable (even not-choosing is a choice). You can strain and strive as much as you want, all you will do is slide amongst alternatives and never do everything.
and just substitute in names of various other things that you want—then the “metric signature”, due to time flowing over and beyond us like a river always, is − in so many of the pursuits one might like to do, such as
living so you get to Heaven after this life (ok, I said I wouldn’t bring in any probability distributions but I had to cheat on this one. It’s an interesting measure theory question, isn’t it? If there is even a finite chance of getting an infinite payoff, then unless the utility function becomes flat above a certain payoff, then the only logical thing to do is make 100% sure you get the infinite payoff. OK, /rant)
Sure, sometimes one lucks out and there is a positive association between two things, like learning mathematics and being a quant—but the magnitude might be less than you expect. (Pure maths alone is insufficient and unnecessary to finance.)
In terms of the 10,000-hours-to-expertise paradigm—despite some complementarities (+)—there are only so many 10,000-hour blocks in your life. And the Type A personality who squeezes out the most 10,000-hour blocks, gets the most toys or becomes the world’s best cyclist or visits all the countries, learns the most languages, or whatever, still miss out on something.
Leaving aside that the human encyclopedia and Tony Hawk also will turn back to dust, just even evaluating only the finite path[0,1] → life , that busy body necessarily misses out on
In English it sounds so obvious to be trivial: you can’t do everything, because nothing is also something and if you’re doing something you can’t be doing nothing.
But the mathematical language, in addition to sounding more exotic and smartypants, adds something real, at least for me—which is the sense of those − signs attaching me to everything. Every time I do something, I’ve lost some other opportunity. Every person I become, I drift further away from the possibilities of who else I might have been. Every commitment loses a freedom and every freedom wastes a commitment. Every nothing wastes a something and every something forgoes a nothing. Everything is receding, decaying, entropying, with or without me, until eventually the waters will cover my head and I never surface again.
When shepherds no longer roamed freely through the hills
and it became efficient for homes to be built in a rotary array around some kind of centre,
then pubs (public houses = free houses) became the meeting place
This is one of the most influential things I’ve heard, period. Think about how much longer you have to walk and how much lonelier life became once you don’t cut across another person’s land.
My pessimistic image of the culture that I live in is
city people all in their separate flats, with their separate computers, or separate televisions, on separate couches, alone in the space they’ve paid for with the career they fought to dominate
going out to a restaurant, pub, or coffee shop to experience the unexpected bumpings into people
so everything costs money. It costs money to have friends, costs money to hang out, costs money to flirt, costs money to meet people, costs a lot of money to meet rich people, costs money to put yourself in a place where people will happen to encounter you—unless you do it over the internet—and then people wonder why nobody makes friends after college…
suburban people the same, except also having their own pools instead of sharing a community pool
having their own medium-sized lawns — big enough to keep the neighbours from peeping in the window, or seeing you on the porch and say hello — instead of sharing a large park cutting all the medium lawns down to small lawns (not that they individually choose this — the decision is made by real estate developers)
country people even more isolated because land tracts are so huge
This is no 1970’s Brooklyn or 1950’s Appalachia, with people sitting on their porches and knowing each other and generally being outside and around each other at the same time.
When I think about more "primitive" cultures, I imagine if I’d been part of them then my identity would be so tied up in my relationships to other people—what I was born into, tight & maintained family relations, never redefining myself or my history, never escaping childhood, but with a sense of self and belonging and continuity from youth to parenthood to old age. Imagine if you slept this close together:
(and of course, relatives and friends would hear or even—gasp—see you having sex—but which is more normal, to hide it or display it?)
^ Apparently the Holocene (little ice age) is the reason NW European culture with its individualism and small family norms—which propagated the world over thanks (I guess) to guns, germs, and steel—changed that NW European culture from a practice of public sex (in the manor—like a barn, sleeping to private.
Would people be kinkier? Or maybe it would depend on the initial conditions (if sex-copying is like an Ising spin then perhaps the first mover (wink wink) decides whether the culture becomes kinky or not)….
Can you imagine flirting, teasing, when you’re young, and then seeing the one you wanted to be with have sex with the one you competed with? I can’t fathom what would happen next. Would it be easier to move on? Harder? Would things just be so different that I can’t even conceive it? (yuk yuk)
…And I won’t even go into the sexual norms of Babylon or Sparta …
I can’t say which culture I would prefer to live in, because my preferences are a function of the way I was raised. Economists usually leave aside where utility hypersurfaces come from and just treat them as good (or at least, unimpeachable—or, at the very least, immalleable).
But from a deep-past, anthropological perspective like this, it’s easy to see, “Yeah, maybe I just think monogamy is good because, duh, I live in a monogamous culture”. More broadly, I live in a culture of monogamy, where crushes and attraction are repressed, where physical attraction should not be confused with “real love”, where you probably have never met your spouse yet when you’re 16, where what the family thinks of him/her is less important than what you think, where equality among the sexes is valued, where young people don’t date anymore, they just party and eventually have sex with their friends (except for certain religions where that subculture exerts a dominating influence or sometimes the subculture itself has been magnetised toward the prevailing culture), where ambition is good, where people want to be footballers, where monetary compensation is negotiated in secret and kept secret, where compensation is based on measurable individual achievement rather than arguable perceptions of morality, where shame and guilt are not uncommonly attached to sex, where people opine about who should have sex with whom and why and when and where and how, where people break up because they finish school and get a job in a different city, where classically sexual relationships are supposed to happen with one person over a lifetime but serial monogamy seems to be taking over, where people puff themselves up to impress strangers or newly-met friends-of-friends, especially when they’re afraid or ashamed of themselves on the inside.
I mean of course there are various arguments you could make (at least I’ve heard some) as to why monogamy is good, or why love as it’s conceived by us is the right way to conceive it, or why everybody having sex in public would be weird, or gross, and people in my culture argue back and forth both directions about these things—but at least for me, I really can’t extricate myself enough from the expectations and the learned behaviours and the way things have always worked for me and my expectations of others and … so on.
Things I take for granted. Anyway, back to private property…
One of my least favourite aspects of modern capitalist life is the segregated non-interaction of private persons with each other and each other’s property.
Everyone lives in their own place—or cramp in with flatmates—they can at least be a network of friends, since the formula for friendship requires proximity and random encounters. That is, if you don’t work opposite hours….
Everyone rides the tube to work while not speaking to each other. Or goes running alone, listening to their own iPod’s, dreaming of a career success or thinness/sexiness and people liking them-which idea was implanted by yet another commercial interest….
Or outside major cities, everyone drives in their own car and listens to the radio by themselves. At least drivers who talk on their mobile phones are enjoying some person-to-person interaction.
Rich suburban people all have their own pool. (And if a neighbour drowns in it, it’s your fault—so better put up a fence.)
Things are too entangled, too complex, for me to state a preference. Although, I guess by staying where I am, I’m tacitly putting up with and agreeing to the norms I was raised by. Maybe I am being too pessimistic, or maybe someday I will seek out something new … or try to get together with people who want to make something new….
I would link this up to some other thoughts I’ve had about charity and need. In a clear sense, somebody who accepts charity (say thanking you for giving something that’s actually rather crappy but they won’t tell you that since they want to be polite) does something back for the giver; if we had an fMRI we could measure the utility upticks in the donor and if we knew all of the neurochemistry we could say which dopamines are flowing where.
That’s undeniably true but the first time someone pointed it out to me, it clashed with my simple and straightforward view that the rich giver is the one doing the good act and the poor receiver should be grateful. But human interactions are more complicated than that, clearly. And something similar could maybe be said of the ever-escalating wealth and comfort of our age—or at least how my culture chooses to make use of that wealth.
When people are poor they lean on each other, and maybe in reaching the goal of standing fine alone something else is therefore symplectically lost. We should call up some of the boomerang millennials and ask how their failure to fly out of the nest really turned out—if being a loser didn’t have its upsides in terms of strengthening familial relationships. And then I’ll ask myself what it is I’m aiming for.
We’re taught that the children of Tiger Moms go to Yale and then Harvard Law and then become McKinsey consultants and then go on to head large corporations or i-banking or essentially win at life and rule the world in myriad ways;
But I wouldn’t be completely making sh_t up. Those messages, or something like them, ∃ in the culture I come from and maybe in the culture you come from as well. Peter Thiel described a tournament to get into an Ivy League school, followed by a harder tournament to get into Stanford Law, followed by a harder tournament on Wall Street, … and left out of his story the 99.99% of us who didn’t even make it to the first tournament.
What about the supermajority? I’m pretty sure a hundred weak people can lift more weight than the strongest man on Earth. And I’m even more sure that the 50 smartest people on the planet can’t run Wall Street by themselves—let alone all the shops, shipyards, data centres, and engineering the runways of the airstrips to a millimetre of precision, that make up the economy.
So what about the rest of us? How much sense does it make to see the world in Thiel’s terms—the best versus the rest?
Well basic economics 101 tells us that a modern economy is made up of many specialised actors. The people who bend the tubes to make neon lights don’t know much about sewing shoes or sourcing the material for shoes, and none of those people know—or should know—how to do Ruby on Rails or Haskell.
Some people who research expertise also have developed a theory of 10,000 hours. If you practise something for 10^4 hours—so five years of work experience or ten years as a very, very consistent hobby—then you become awesome at it. A related theory is that if I have been doing something for a year or two and Peter Thiel tries to compete with me on it, I will still win regardless that he’s a chess master and a Stanford Law graduate and handsome and so on.
In other words, ∃ an equally or more compelling narrative than the A Player narrative: about everybody being different and that being okay and in fact more efficient.
Viewing education as a signalling mechanism to rank a one-dimensional hierarchy of best to worst people is one possibility—and one that BCG possibly uses to its advantage in applying profitable friction to the large companies who for some reason decide that some A+++ 24-year-olds know how to run their business better than they do. (Ooh, I really wanted to work in ‘fiction’ and ‘friction’ somehow. Too bad I was never a good enough student or I could have worked it.) But the dominant messages I hear from people who went into highly-paid frictional professions—accounting, law, consulting, finance—are that they want their kids to “find their own path”—i.e., do something with a tangible contribution to the society. Not necessarily fundraising for Laotian villagers, but something profitable that measurably increases the wealth of their community.
So the “everyone is a special individual” message doesn’t just come from warmhearted Kindergarten teachers wearing seashell necklaces. If specialisation, difference, and diversity are more important than uniformly learning
the same parts of history,
the same mathematics,
and being compared to each other on a fabricated 7-dimensional scale (grades)
to see if we can get to be included in the golden inner circle of whatever mysterious ritual the white-shoe white-collar firms perform to add an order of magnitude more value to their customers per employee,
— then the hard-nosed economists are also telling us the same message. Maybe it is not about me being better than you and worse than Peter Thiel, but rather a high-dimensional poset network of symplectic skills and attributes, mostly not substitutable by smart people over dumb people and yet all worth pursuing as they complementarily add size to the world GDP.