The great majority of Americans might find the post-recession expansion disappointing, but not the top earners.
The following table reveals that our economic system is operating much differently than in the recent past. The rightmost column shows that the top 1% captured 68% of all the new income generated over the period 1993 to 2012, but a full 95% of all the real income growth during the 2009-2012 recovery from the Great Recession. In contrast, the top 1% only captured 45% of the income growth during the Clinton expansion and 68% during the Bush expansion.
Of that weren’t enough, the next chart offers another perspective on how well top income earners are doing. In the words of the New York Times article that included it:
…the top 10% of earners took more than half of the country’s total income in 2012, the highest level recorded since the government began collecting the relevant data a century ago… The top 1% took more than one-fifth of the income earned by Americans, one of the highest levels on record since 1913 when the government instituted an income tax.
We have a big economy. Slow growth isn’t such a big deal if you are in the top 1% and 22.5% of the total national income is yours and you can capture 95% of any increase. As for the rest of us…
One question rarely raised by those reporting on income trends: What policies are responsible for these trends?
Cross-posted at Reports from the Economic Front.
Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.
Comments 12
Welcome to an Economy for the 1% » Sociological Images | FindMeO — September 15, 2013
[...] Read this article: Welcome to an Economy for the 1% » Sociological Images [...]
Agrajag — September 16, 2013
Thank you for sharing these. It's vitally important that people know about, and talk about this. Unfortunately, I don't see any signs of things improving, any and all policies that could help to flatten the landscape even slightly are quickly stamped "socialist" and dies a quick death.
Most Americans I've talked to about this issue, thinks it's grossly unfair that all income-growth goes to the rich.
Yet most of them are also strongly opposed to doing anything whatsoever to change that.
Village Idiot — September 16, 2013
Hmm, it seems the comment I just spent 45 minutes writing was posted and then after I edited some spelling mistakes it vanished. WTF?
EconGuy — September 17, 2013
The U.S. spends something like $100 billion per year in corporate welfare, and that doesn't even count business tax credits, redistributive regulatory interventions (e.g., ethanol mandates), and credit programs like insurance, direct loans, and loan guarantees. These subsidize the rich and promote malinvestment. End them all. (NB: much of the gains of the rich are from the increased returns to high human capital from an increasingly global market. A great band or athlete creates much more value to an audience of 4 billion than 200 million, say. This isn't the problem. It's the redistribution through the political process to the rich that should concern us.)
Then redesign and coordinate assistance programs so the implicit marginal tax rates don't trap people in dependence (while preserving a safety net). See Casey Mulligan's The Redistribution Recession.
Many other reforms--tax, immigration, entitlement, housing, education, health care, etc.--would benefit rich and poor alike. I'm interested in better lives for regular folks, not punishing the rich as an end in itself.
Illage Vidiot — September 18, 2013
wrong thread, ooops. never mind.
Welcome to an Economy for the 1% — September 18, 2013
[...] post originally appeared on Sociological Images, a Pacific Standard partner [...]
How well is the 1% doing? | Fashioning Sociology — September 18, 2013
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Capitalism and it’s discontents | A Global Organic Mindset — January 23, 2014
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