Private business owners explain half of the top 1%'s income-share rise

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 3:09

   of research papers we built with this data. It's kind of the foundation for then the stories we tell in the book. So Owen, tell us a little bit about what you found about these everywhere. millionaires who are they uh and how important are they in our economy so everywhere millionaires are ordinary americans who've gotten extraordinarily wealthy from running private businesses there are over three million of them who have at least five million dollars in net worth their average wealth is 25 million dollars if you look at the rise of the top one percent it's about half of the rise in the top one percent of the past few decades are accounted for by these private business owners. And, you know, if you add up all of their wealth, it's an order of magnitude more wealth than the richest 400 people in America. So there's just a ton of attention on celebrity

2. 3:59

   billionaires. And what we're trying to do in the book is broaden the aperture to say there's way more abundant wealth that's closer to home. You don't have to be a moon man like Elon Musk or Jeff Bezos to be extraordinarily wealthy. Just look around and go to a local golf course, go to a nice vacation town and like a lake or something and say, who owns that $3 million vacation house? And often it's the type of people we're talking about.

3. 4:24

   My reaction when I hear that is that actually that is a good thing. You know, when I look at the concentration of wealth and concentration of power that has been accumulated by a billionaire their class, to me, that is a problem because it's like, I mean, why do you need a billion dollars? Why do you need five billion dollars? What more can that buy you in life? But if we're learning that actually the power is accruing to a larger group of people who don't have billions of dollars, but they have millions of dollars, yes, they live probably very, very nice lives. But it's at least, you know something that is maybe more akin to what people think about when they think of the american dream versus like literally controlling the universe to me right my reaction is like that is maybe a good thing uh what is your view of of what this actually means i'll give it to eric

4. 5:23

   yes so we do try and explore this question of whether the american dream is dead or alive and what is, you know, the existence of this class, their rise, their stories. And we tell a lot of stories to try and paint some nuanced pictures of the good, the bad, and the ugly among them. But, you know, the takeaway, the first piece, I think, is really that the American dream is more alive than you think, but it's not necessarily where you're looking. So we think this is a Pretty undertold story in terms of what the paths to wealth in America really are. You have this standard credentialed labor market story, go to school, sit still, get really good grades, go to a really good college, work for a big company, you know, move up the ranks there.

5. 6:06

   and that is a successful path up to you know the top five percent three percent but there's this totally different pathway that people take running a business where maybe they work in a trade they work in a less glamorous industry learning some skills learning some customers learning about problems that real people have in the world that need to be solved and then they go start a business later in their career and those businesses can become quite profitable and quite lucrative and And so then you have all these DECA and centimillionaires even in these unglamorous businesses that have built businesses over several decades that have achieved the American dream coming from relatively low income backgrounds.

6. 6:46

   In a lot of cases, the typical folks in the top 1% that are business owners didn't inherit their business. They either started or bought a business and grew it.