(h/t to University of Oregon economics professor Marc Thoma over at his Economist’s View blog)
University of Ottawa labor economics professor Miles Corak reported on Sunday that one of the world’s top income inequality experts, UC Berkeley economics professor Emmanuel Saez, has “…updated his work with Thomas Piketty on the evolution of US Top Incomes to 2010.”
He quotes this from Saez’ update…
“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.”
So, just in case all those folks out there in the 1% need it spelled-out for them, this is what they will write in tomorrow’s headlines (assuming this story even gets reported in the U.S. MSM, since I’m learning about this on a Canadian blog): ”In 2010, average real income per family grew by 2.3%.”
Yes, it’ll be interesting to see how the MSM reports this. With them, it’s all about the context.
As for me, I’ll focus upon the balance of the Saez paragraph, above: ”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.”
Based upon every metric I’ve read and reported upon concerning this travesty over the last few years, I believe it’s now in the record book: U.S. income inequality is now (or, it’s about to be stated that it’s) officially worse than it’s been since since they first developed decent metrics to measure this statistic back in 1917.
Corak tells us…
Over 90% of the income gains in the first year of the recoveryAs Corak also notes: “Saez suggests that this ‘may … help explain why the dramatic growth in top incomes during the Clinton administration did not generate much public outcry while there has been a great level of attention to top incomes in the press and in the public debate since 2005.’”
went to the top 1%
University of Ottawa
Economics for Public Policy blog
March 4, 2012
…The 10 page update offers a clear picture of how income shares have varied over different business cycles, as well as the long-term trends since 1917. Top income shares fell dramatically after World War II, stayed flat, then began to rise in the early 1980s and have returned to their pre-War levels.
The top 10% in the US take now take home about 47% of all income, but this is driven by the top 1% who account for 20%.
The difference between the business cycle of the 1990s and the 2000s is that the incomes of the bottom 99% grew by 20% between 1993 and 2000, but only by 6.8% between 2002 and 2007.
Contextually speaking, for the year 2010, above and beyond the ongoing (and getting worse) income inequality travesty update reported above, it's important to remember that the U.S. Bureau of Labor Statistics’ Unadjusted Consumer Price Index (CPI-U) for 2010 increased 1.6%, while the 99%’s income only grew by 0.2%.
So, do the math. Then, remember the propaganda: “…average real income per family grew by 2.3% in 2010.”
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More about context…some people refer to this as “disaster porn,” other folks like to think of it as…ummmm…what’s that word, again? Reality…
In the wake of the best Employment Situation Report the Bureau of Labor Statistics has published since Obama took office, we’re also learning about how, in 2012, “The fewest number of young adults in the past 60 years have jobs.” (And, yes, I do understand the realities of the shift in the age demographics--and the aging of the Baby Boom generation--in our country that's well underway right now. But, that's primarily a copout. Just look at the current unemployment [BLS' U.3 and U.6 indices] rates for recent college grads, and pretty much everyone under 25 these days.)
It’s also been reported, at least in a few MSM outlets over the past few months, that the majority of jobs that are being created these days are lower-paying.
Even further compounding the severity of the concurrent, profound level of inequality between our country’s haves and have-nots, we’ve just discovered that the education gap is growing between the rich and the poor in the U.S., too.
Meanwhile, a disproportionate share of those jobs that are being created are being filled by temporary help, to the point where we’re now hearing echoes of what Stiglitz and Bernanke have been telling us over the past few weeks relating to how this “Surge in temp workers reflects a fundamental change in the American workplace.”
And, while we are outraged about the horrendous working conditions of outsourced manufacturers of U.S. goods by many in China, we’re also now reading how temporary workers here in the U.S. are being treated similarly (if not almost as poorly). (h/t to Kossack Azazello)
So, in diametric opposition to the conventional wisdom that has been preached to the 99% by the corporatocracy over the past few years, even the basic rules concerning growth in our Gross Domestic Product, and how that supposedly corresponds to upticks in employment, no longer apply in today’s twisted economic reality. (The one percent’s argument against this is that GDP still “corresponds” to employment/unemployment. It’s just that it takes much more growth in GDP to equal a one point drop in the U.3 Index jobless rate, than it used to. Now--considering the reality that record-breaking corporate profits are too frequently unmentioned in this status quo-scripted rebuttal--if that’s not a candy-coated way of supporting the one percent’s twisted philosophy about the new normal, I don’t know what is.)
When it comes to joblessness and employment, on many levels, what we’re witnessing right now may no longer be casually dismissed via old axioms, such as: “Unemployment is just a lagging indicator in a recovery.” And, in terms of how an “increase in the hiring of temporary workers is one of the first positive employment indicators in an economic recovery.” At least as it relates to what we’re witnessing in the U.S. workforce, today, it’s all but official. Those lines pertaining to economic orthodoxy are now widely considered to be little more than outdated, status quo memes.
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"You see in my line of work you got to keep repeating things over and over and over again for the truth to sink in .... to kinda catapult the propaganda."
George W. Bush
President Participates in Social Security Conversation in New York
Greece Athena Middle and High School
Athena Performing Arts Center
Greece, New York
June 23rd, 2005