Income inequality grows
Key Excerpts from Article on Website of New York Times
Posted: August 23rd, 2009
The rich have been getting richer for so long that the trend has come to seem almost permanent. They began to pull away from everyone else in the 1970s. By 2006, income was more concentrated at the top than it had been since the late 1920s. The recent news about resurgent Wall Street pay has seemed to suggest that not even the Great Recession could reverse the rise in income inequality. But economists say and data is beginning to show that a significant change may in fact be under way. The rich, as a group, are no longer getting richer. Over the last two years, they have become poorer. And many may not return to their old levels of wealth and income anytime soon. Last year, the number of Americans with a net worth of at least $30 million dropped 24 percent. Few economists expect the country to return to the relatively flat income distribution of the 1950s and 1960s. Indeed, they say that inequality is likely to remain significantly greater than it was for most of the 20th century. In 2007, the top one ten-thousandth of households took home 6 percent of the nations income, up from 0.9 percent in 1977. It was the highest such level since at least 1913, the first year for which the I.R.S. has data. The top 1 percent of earners took home 23.5 percent of income, up from 9 percent three decades earlier.
Note: Two researchers into income inequality, Emmanuel Saez and Thomas Piketty, recently released a detailed report showing that income inequality in 2007, just before the real estate bubble burst and the financial crisis unfolded, was the highest since 1917. To read their report, "Striking it Richer: The Evolution of Top Incomes in the United States," click here. For analysis of the report, click here.