Just under a year ago, I posted this: “Saez' 2010 Inequality Update: Incomes of 1% Grew 11.6%, Incomes of 99% "Grew" 0.2%.” We’re now learning that, arguably, the world’s top income inequality expert, UC Berkeley economics professor Emmanuel Saez, has updated his work with Thomas Piketty on the evolution of U.S. income inequality through 2011, the first two years of our so-called "economic recovery."
Here’s an excerpt from Naked Capitalism Publisher Yves Smith’s thoughts on this, from earlier today…
Yes, Virginia, the Rich Continue to Get Richer: the Top 1% Got 121% of Income Gains Since 2009
Yves Smith
Naked Capitalism
Wednesday, February 13th, 2013 5:11AM
Yes, sports fans, you read that headline correctly. The top 1% has captured all of the income gains since 2009 and then some, roaring ahead while the rest of the population slipped behind. A new paper by Emmanuel Saez (along with his frequent co-author Thomas Piketty, a long-standing cataloguer of income inequality) estimates that the income gains to the top 1% from 2009 to 2011 were 121% of all income increases. How did that happen? Incomes to the bottom 99% fell by 0.4%...
Bold type is diarist’s emphasis. (And, maybe you should read those emphasized sentences again?)
A small excerpt from the Saez’ and Piketty’s, et al, update…
…The labor market has been creating much more inequality over the last thirty years, with the very top earners capturing a large fraction of macroeconomic productivity gains. A number of factors may help explain this increase in inequality, not only underlying technological changes but also the retreat of institutions developed during the New Deal and World War II – such as progressive tax policies, powerful unions, corporate provision of health and retirement benefits, and changing social norms regarding pay inequality. We need to decide as a society whether this increase in income inequality is efficient and acceptable and, if not, what mix of institutional and tax reforms should be developed to counter it…
And, last but not least, here’s part of
my post from less than a year ago…
(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 recovery
went to the top 1%
Miles Corak
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.
As 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.’”
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.”
# # #
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…
”Recovery?” “Reality?” “Shared Sacrifice?”
Those words might make for good sound bites but, apparently, for the majority of us in the 99%, they're not part of our “new normal.”
And, on that note, please checkout Meteor Blades’ latest post on raising the minimum wage. It’s really not much to ask of our overlords – who won’t even give us the steam off of their piss these days -- but it is a start.
More porridge?
