Income Gap Shrinks as Lawyers and Other Top Earners Take a Pay Hit
Law firm partners, CEOs, investment bankers and other highly paid individuals are earning less, helping shrink the income gap between top wage earners and those with more modest paychecks.
In 2007, the top 1 percent of U.S. families—those making more than around $400,000 a year—accounted for 23.5 percent of all personal income in the U.S., the Wall Street Journal (sub. req.) reports. That level was last seen in the 1920s.
Economists expect the percentage to drop, so that next year the top 1 percent will account for about 15 percent to 19 percent of income. The result may be less money for the federal government’s tax coffers, a drop in demand for luxury goods and fewer large charitable donations.
Among the big earners profiled in the story is Darren Tucker, a 36-year-old antitrust lawyer who was making $400,000 as of counsel at O’Melveny & Myers. Earlier this year, Tucker learned he wouldn’t have a shot at a partnership in the near future, in part because of a drop in business. Worried about layoffs, Tucker jumped to a job at the Federal Trade Commission, where he earns $153,000.
Tucker and his wife, Anne, had been spending about $100,000 a year on treatment for their two autistic children. Now the couple has moved one of the children into public schools, and Anne is looking for a job as a substitute teacher.
Topics: Career & Practice
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