Emmanuel Saez is the Berkley scholar who’s well known for his study of inequality — his work is arguably the intellectual backbone behind Occupy Wall Street, and the whole concepts of the 99% vs. the 1%.
Anyway, he has a new paper called Striking it Richer: The Evolution of Top Incomes in the United States (Updated with 2009 and 2010 estimates).
The basic gist: After losing big during the Great Recession, the top 1% have dominated income gains in the Great Recovery.
From the report:
During the Great Recession, from 2007 to 2009, average real income per family declined dramatically by 17.4% (Table 1),1 the largest two year drop since the Great Depression. Average real income for the top percentile fell even faster (36.3 per cent decline, Table 1), which lead to a decrease in the top percentile income share from 23.5 to 18.1 per cent (Figure 2). Average real income for the bottom 99% also fell sharply by 11.6%, also by far the largest two year decline since the Great Depression. This drop of 11.6% more than erases the 6.8% income gain from 2002 to 2007 for the bottom 99%.
The sharp fall in top incomes is explained primarily by the collapse of realised capital gains due to the stock-market crash. Aggregate realised capital gains fell from $895 billion in 2007 to $236 billion in 2009. Indeed, including realised capital gains, the top decile income share dropped from 49.7% in 2007 to 46.5% in 2009 while excluding realised capital gains, the top decile income share remained virtually constant from 45.7% in 2007 to 45.5% in 2009.
In 2010, average real income per family grew by 2.3% but the gains were very uneven. Top 1% incomes grew by 11.6% while bottom 99% incomes grew only by 0.2%. Hence, the top 1% captured 93% of the income gains in the first year of recovery. 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. National Accounts statistics show that corporate profits and dividends distributed have grown strongly in 2011 while wage and salary accruals have only grown only modestly. Unemployment and non-employment have remained high in 2011.
This table shows what happened to the 99% and 1% during the last recessions and recoveries.
Photo: Emmmanuel Saez
In the end, the point is basically: The dynamics of inequality remained basically the before, during, and after the great recession.
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