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.
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