Fact Re-distribution: The Myth of Meritocracy

In a letter to the editor of the Washington Post on October 17, 2010, “The myth of meritocracy,” Philip Allen asserts, without facts, that “Wealth in America is more often accumulated by the already wealthy, privilege by the entitled, and impoverishment by the already poor.” “... risk-taking diligents who ‘make it’ are far outnumbered by the fortunate and privileged who start ‘ready-made.’” While I cannot speak to privilege and impoverishment, I can speak to the accumulation of wealth by the "risk-taking diligents" and support my argument with facts.

The “wealthy” I assume are the top income earners: the people who either own small businesses in America or receive employment from those businesses. The small businesses they own are recognizable in every town: gas stations, laundries, retail franchises, and other boutique family businesses. According to 10 Secrets that Millionaires Keep, by Daren Fonda of Smart Money, the financially successful, defined as those who have a net worth of $1M, are 90% more wealthy than other US households, earn on average $366,000 per year, and are in the top 1% of taxpayers. Their number has doubled since 2002, with half of them earning their wealth in their lifetime from small business, one-third from large corporations, and less than 3 percent through inheritance. Most come from families, which would not be classified as wealthy, and have enjoyed their financial success for less than 15 years. Their median grade-point average in college was 2.9, with an average SAT score of 1,190. Fifty-nine percent attended a state college or university.

What is a “wealthy” person’s secret to success? In their words, it is hard work, discipline, education, and treating others with respect. This seems to be borne out by the Year 2000 Census data. Of the 39 million people representing the bottom 20% of income earners only 8 million heads of household worked. Of the 64 million people representing the top 20% of income earners 19 million worked.

Other than their wealth, the “wealthy” seem to be a lot like the average American, except they have taken extraordinary risks, worked smarter and harder, and converted the opportunities presented to them into greater financial success.

Mr. Allen is entitled to his opinion; he is not entitled to his own facts.