I Am the One Percent (and You Probably Are Too)
I am the “one percent.” You probably are too.
When the Occupy Wall Street movement was sweeping Boston, I was confident that I was not part of the “one percent” of income taxpayers in America that the protesters were railing against each day. As a research associate at Harvard Business School, my salary puts me in the median household income range in the U.S. Though I study corporations and Wall Street firms, I don’t work for them. The outraged protesters downtown had my sympathy. They were right, I felt, to draw attention to the growing economic gap between the rich and everybody else in the U.S.
What I didn’t consider during the protests was a broader notion of the “one percent” — one that included the rest of the world.
Recently, I checked out an organization called Giving What We Can, which is dedicated to eliminating poverty in the developing world. Members pledge to donate at least 10% of their income towards that cause. Using their “How Rich Am I” tool, I found out that my income after taxes puts me in the top 1.5% of the world’s population (the calculation adjusts for purchasing-power parity). That means my income is 19 times that of the average person. Both those figures shocked me.
According to Giving What We Can, most Americans are part of the world’s richest 20% and control more than 80% of the world’s income. Giving What We Can is one of several organizations that promote “effective altruism.”
In a recent TED talk, philosopher Peter Singer talked about the moral obligation that individuals have to help others through effective giving (an organization Give Well identifies the most effective charities). Singer offers the examples of billionaires Bill and Melinda Gates, who saved an estimated 5.8 million lives through their philanthropy, the Bill and Melinda Gates Foundation.
But what about the rest of us? Singer doesn’t let anyone off the hook when it comes to giving.
One organization Singer cites is 80,000 Hours. The founders estimate that we typically spend 80,000 hours working. The charity aims to help people pick careers that can have the greatest positive social impact. Basically, it wants to put those 80,000 hours to the best possible use for the world. Most people assume that working for nonprofits or charities is the way to have the greatest impact. 80,000 Hours, however, encourages people with the right skills to consider high-paying jobs in industries like finance. The more you make, the organization argues, the more you can give.
That’s what “effective altruists” argue. Often, the impact of giving to an effective charity is far greater than working directly for that organization. Singer offers examples of Ivy League grads going off to Wall Street and donating most of their earnings to charities.
That’s all very well, you might say, but what about the social ills caused by Wall Street? It’s hard to forget the ramifications that we’re all still reeling from post-financial crisis. How can anyone possibly measure or account for the possible negative social impact of working a job on Wall Street? The New Economics Foundation, an independent UK-based think tank, tried. It estimated that “leading City bankers,” while collecting salaries of between £500,000 and £10 million, destroy £7 of social value for every pound in value they generate. Meanwhile, childcare workers, for every £1 they’re paid, generate between £7 and £9.50 worth of benefits to society.
That sounds bad. But what if those bankers were contributing to effective charities?
The Anti Malaria Foundation estimates that you can save one life for just under $2,300. Imagine if Goldman Sachs chief executive Lloyd Blankfein, who took away $68.5 million the year before the financial crisis, reduced his living expenses by half and donated the rest of his income to charity. How would that change the estimation of social value destroyed or created? Is it possible to come to a final tally when you look at lives saved from malaria, for example, versus havoc wreaked through the collapse of the global financial system?
I’m not sure that positive social impacts can be measured purely in terms of the number of mosquito nets your contributions buy. I have a hard time believing that our ethical responsibilities are best enacted through financial contributions. How you choose to spend your time should matter. Who’s to say that these talented graduates on Wall Street couldn’t generate greater social impact by focusing on social innovations rather than trading derivatives all day?
The idea of “effective altruism” — to make all you can and give all you can — is certainly intriguing. I appreciate that Singer offers a radical departure from our conventional ideas about what it means to “do good.” He insists that our moral obligations extend far beyond our neighbors, city, or even country. So what does it mean to be in the “one percent” of income earners in the world? I think that’s a powerful question we should all ask ourselves.