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September 16th, 2013 at 11:22 am

Income flowing to the top 1% is at a record high

The economic recovery belongs to the rich. It seemed ominous in 2007 when the share of national income flowing to America’s top 1% of earners reached 18.3%: the highest since just before the crash of 1929. But whereas the Depression kicked off a long era of even income growth the rich have done much better this time round.

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New data assembled by Emmanuel Saez, of the University of California, Berkeley, and Thomas Piketty, of the Paris School of Economics, reveal that the top 1% enjoyed real income growth of 31% between 2009 and 2012, compared with growth of less than 1% for the bottom 99%. Income actually shrank for the bottom 90% of earners. After the Depression households across the income spectrum enjoyed income growth roughly commensurate with losses during the downturn. As a result the top 1% only captured about 28% of total income growth from 1933 to 1936. This time around 95% of the increase in American income since 2009 has gone to the top 1%. No wonder, then, that the share of national income flowing to the rich is at a record high of 19.3%, ahead of both 2007 and 1929.

Via The Economist

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