Tuesday, February 11, 2014
In the table above, UC Berkeley's Emmanuel Saez and the Paris School of Economics' Thomas Piketty show that the top one percent made dramatic income gains following the 2007-2009 recession, in comparison to previous recessions. In fact, that group has accrued 95 percent of the income gains since the recovery started. Dylan Matthews comments in the Washington Post Wonkblog:
This table comes courtesy of UC Berkeley's Emmanuel Saez and the Paris School of Economics' Thomas Piketty, everyone's favorite inequality-tracking researchers (thanks to Annie Lowrey for pointing out the paper). They've added preliminary 2012 numbers to their dataset on growth in Americans' — and in particular rich Americans' — incomes, which gives us three years of data (2010, 2011, 2012) during the recovery, in addition to the full 2007-2009 span of the Great Recession. That lets us compare what happened to incomes in the recovery to what happened in past recoveries, and what happened during the recession to what happened in past recessions.
Shockingly — shockingly — what they found is that while only 49 percent of the decline in incomes during the recession was born by the top 1 percent (whose income share fell to 18.1 percent due to the recession), 95 percent of income gains since the recovery started have gone to them. This is a big change from past recessions and recoveries. Only 65 percent of the expansion under George W. Bush, and 45 percent of that under Bill Clinton, went to the top 1 percent. The rich bore a greater share of the 2001 recession's damage than of the Great Recession's, and the differential between the amount lost in the recession and gained in the recovery was much smaller last decade.
"Overall, these results suggest that the Great Recession has only depressed top income shares temporarily and will not undo any of the dramatic increase in top income shares that has taken place since the 1970s," Piketty and Saez conclude. "Indeed, the top decile income share in 2012 is equal to 50.4%, the highest ever since 1917 when the series start."