No Surprise: The Rich Are Getting Richer, Study Says
Who's recovering from the recession—the rich, or the poor?
According to a new paper by Emmanuel Saez, a Berkeley professor of economics and director of the Center for Equitable Growth, it's the wealthiest individuals who have benefited most from the recovery, even though they lost heavily during the recession. In 2010, the most recent year in which distributional income statistics have been made available by the Internal Revenue Service, the income of the wealthiest 1 percent of Americans grew by 11.6 percent while the income of the rest of the nation averaged an increase of just 0.2 percent.
Saez obliquely noted the connection between those asymmetric income trends and the Occupy movement, which rose to prominence in the past year.
“The top 1 percent captured 93 percent of the income gains in the first year of recovery,” he wrote. “Such an uneven recovery can help explain the recent public demonstrations against inequality. It is likely that this uneven recovery has continued in 2011 as the stock market has continued to recover.”
Saez fingers the undermining of progressive tax policy, powerful unions, and solid health and retirement benefits as factors in growing economic inequality during recent decades, in addition to technological and social changes. He also predicts a shift toward even higher wealth concentration if the trend continues unchecked.
“The evidence suggests that top incomes earners today are not 'rentiers' deriving their incomes from past wealth but rather are 'working rich,' highly paid employees or new entrepreneurs who have not yet accumulated fortunes comparable to those accumulated during the Gilded Age,” Saez wrote. “Such a pattern might not last for very long. The drastic cuts of the federal tax on large estates could certainly accelerate the path toward the reconstitution of the great wealth concentration that existed in the U.S. economy before the Great Depression.”
The research calls to mind Bloomberg's recent, ingenuous coverage of the alleged financial woes of Wall Street executives who received decreased bonuses this year. One source for the article said that he was cutting back on annual ski trips and reading supermarket flyers to find better deals on groceries. Another lamented his difficulty paying private-school tuition and a summer rental property, among other expenses.
The data, though, suggests that the richest individuals may not be out of luck yet.
Jon Christian is a reporter with Campus Progress. Follow him on Twitter @Jon_Christian.