Thomas Piketty in his book "Capitalism in the Twenty-first Century" analyzes data about income and wealth inequality in the US and advanced industrial societies - Canada, Great Britain, Sweden, Germany and France. For his analysis he breaks the population down in deciles or groups of 10%: the bottom 10%, the next 10% and so on. His data, while imperfect, show that the top 10% are garnering much more than their share of income. Wealth, according to Piketty, is even more concentrated by the top 10% and even more so by the top 1%.
His figures for the United States show that in 2010 the richest 10% owned the majority of US wealth - 71%. As one goes up the wealth hierarchy, even much greater concentration is exhibited. According to Piketty in 2010 the top wealthiest 1% of Americans owned an astounding 35% of all US capital assets - equipment, stocks, bonds, treasury bills, factories and buildings, houses, land and the like.
While Piketty and his collaborators have done yeoman work in assembling a database of wealth and income information, there is uncertainty in these figures. The income figures although not perfect are more reliable because of federal income tax records. Wealth of the rich is more difficult to ascertain because there is no wealth index published and because the rich have found ways - for example, offshore banks - to hide their wealth.
Nevertheless, there is accurate and complete data for one group of organizations that can be used as a comparison - the endowment of US and Canada higher education institutions both public and private. This is data is available because all major Canadian and American universities and colleges yearly report their endowments and these figures are published by NACUBO, the National Association of College and University Business Officers.
What these figures show is quite remarkable, mirroring the concentration of wealth that Piketty claims. NACUBO reports on 828 endowments, but to simplify matters I calculated the concentration of endowment wealth in the top 800 because it easier when looking at groups of 10% and the top 1% to use totals that are divisible by ten and one hundred. Thus our list starts with Harvard whose 2013 endowment was $32 billion, 334 million and ends with number 800, Mount Ida College with $12.6 million.
Here are the results:
The endowment of these top 800 institutions is $438 billion.
The top 10% 80 richest institutions have a total endowment of $320 billion or 70% of the total.
The top 1% consisting of eight universities are in descending order: Harvard, Yale, University of Texas, Stanford, Princeton, M.I.T, Texas A&M System, University of Michigan. The total endowment of these richest eight universities is $139 billion or 30% of the total that is owned by the top 1%.
What this means concretely is that 720 institutions, the bottom 90%, control $138 billion in endowments which happens to be almost exactly equal to the share of the top 1%. In simple terms the 1% have as much as 90%. In fact, these figures reproduce quite closely the concentration for wealth for the country as a whole (see paragraph two above).
This is disturbing news if one expects higher education to act as a leveling force in North America. I will have more to say about that in a subsequent post.