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By Catholic Online (NEWS CONSORTIUM)

9/11/2013 (1 year ago)

Catholic Online (www.catholic.org)

Bottom 99 percent only grew one percent economically

The rich ... got richer, while the rest of the 99 percent in the United States only grew by a measly one percent. The great divide between the very wealthy and the middle and lower classes only continues to grow, according to local statistics, and what this may mean for America's future is anyone's guess.

The richest 10 percent received more than half of all income last year, 50.4 percent specifically, which is the largest share since such record keeping began in 1917.

The richest 10 percent received more than half of all income last year, 50.4 percent specifically, which is the largest share since such record keeping began in 1917.

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

9/11/2013 (1 year ago)

Published in Business & Economics

Keywords: One percent, financial gains, Depression, Recession


LOS ANGELES, CA (Catholic online) - According to a university analysis of tax filings indicates, the incomes of the top one percent increased a substantial 19.6 percent last year. These gains accounted for 19.3 percent of total household income, breaking a 1927 record which lasted until the Great Depression of 1929.

In the meantime, the bottom 99 percent grew only by one percent. "Striking it Richer: The Evolution of Top Incomes in the United States" author Emmanuel Saez with the University of California, Berkeley, says its all par for the course. 

"In sum, top one percent incomes are close to full recovery while bottom 99 percent incomes have hardly started to recover," Saez says.

Based on Internal Revenue Service data, Saenz conducted his research in conjunction with the Paris School of Economics and Oxford University. His report found that the top one percent incomes were above $394,000 in 2012, top five percent were between $161,000 and $394,000, and top 10 percent were between $114,000 and $161,000.

This divide between the rich and poor has continued to steadily grow since the 1970s, which was a period of greater economic stability. However, during the 2007-2009 Great Recession, Saez says, the one-percenters saw their incomes slide 36.3 percent, while incomes of the 99 percenters fell 11.6 percent.

Through the years 2009 and 2011, ostensibly the first two years of recovery, the top one percent saw their incomes climb an average 31.4 percent, which accounted for 95 percent of the total gain. The bottom 99 percent saw growth of 0.4 percent.

The richest 10 percent received more than half of all income last year, 50.4 percent specifically, which is the largest share since such record keeping began in 1917.

It is unlikely that there will be a change in this financial picture anytime soon. According to Saenz, post recession changes are modest relative to the policy changes made during the Depression.  "Therefore, it seems unlikely that U.S. income concentration will fall much in the coming years, Saenz says.

Saenz won the John Bates Clark medal last year, which is awarded to the most promising economists under the age of 40. Past winners have includes Paul Krugman of Princeton University, Lawrence Summers and Steve Levitt, co-author of "Freakonomics."

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