Rising Income Inequality: Incredibly Good Deal for Super Rich

August 14, 2009

(ChattaBox)— Professor Emmanuel Saez of the University of California, Berkeley, recently updated a study of wealth distribution in the United States, finding Income inequality at levels not seen since the Gilded Age of the late 19th century, during a time when disreputable robber barons gobbled up all of the wealth in the country on the backs of the working poor and child labor.

The disparity in wealth distribution began in the 1990s, but increased dramatically during the Bush administration, with tax cuts for the rich. The study analyzes data through the year 2007. A few statistics stand out.

In 2007, the top .01 percent of American earners took home 6 percent of total U.S. wages, a figure that has nearly doubled since 2000. Additionally, the top decile of American earners, raked in 49.7 percent of total wages, a level that’s “higher than any other year since 1917 and even surpasses 1928, the peak of stock market bubble in the ‘roaring” 1920s.'”

“The top 1 percent of incomes captured half of the overall economic growth over the period 1993-2007,” wrote Saez. The policies of the Bush administration from 2002-2007 accelerated the slow growth of average incomes, while enabling the very rich to pull in a greater share of the country’s wealth.

According to the study, “…the bottom 99 percent of incomes grew at a solid pace of 2.7 percent per year from 1993-2000, these incomes grew only 1.3 percent per year from 2002-2007. As a result, in the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth.”

Saez notes that, the “…top incomes earners today are not “rentiers” deriving their incomes from past wealth but rather are “working rich,” such as the wealthy Wall Street traders and their multi-million dollar bonuses.

Saez expects the wealth concentration at the very top to fall slightly for the years 2008-2009, but to rebound back to previous levels, unless policy changes are implemented.

“Based on the US historical record, falls in income concentration due to recessions are temporary unless drastic policy changes, such as financial regulation or significantly more progressive taxation, are implemented and prevent income concentration from bouncing back, wrote Saez.

Source


Comments

3 Responses to “Rising Income Inequality: Incredibly Good Deal for Super Rich”

  1. Special Blog to All » Rising Income Inequality: Incredibly Good Deal for Super Rich … on August 15th, 2009 3:23 am

    […] the original post: Rising Income Inequality: Incredibly Good Deal for Super Rich … This entry is filed under Income. You can follow any responses to this entry through the RSS 2.0 […]

  2. tryplay on August 15th, 2009 9:49 am

    “Executives and other highly compensated employees now receive more than one-third of all pay in the U.S.” – The Wall St. Journal

    WANT TO DO SOMETHING ABOUT IT?

    Send a message to Obama, or your favorite super earner CEO that he should share a % of his pay.
    http://www.openyear.org/wp-content/themes/church_20/wordvote/wordvote.htm

  3. Hilary on August 29th, 2009 4:30 pm

    When the People have real control, income inequality doesn’t reach such extremes. When the People have real control, they will act in their own self interest to enact redistributive policies. How do we justify the privilege of the wealthy in relation to the everyman? Does a millionaire banker work harder than a single mother with two jobs? Sorry, but we’ve been duped into believing that economic uncertainty is actually freedom. We need LAWS that prevent the gross hoarding of private resources. If we’re afraid that this will result in all of the “qualified” bankers and CEOs moving away to do business somewhere else, we need to enact taxes and tariffs on companies that enable such moves. Free trade is a scourge and is at the root of growing income inequality in America.

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