In 2012, the United States ranked worst in the developed world for the percentage of its workers in low-paying jobs. That's according to Organization for Economic Cooperation and Development data.
A new paper written by Emmanuel Saez of the University of California, Berkeley, and Gabriel Zucman of the London School of Economics, states that inequality in wealth is closing in on the record. The two men looked at the proportion of the nation's total wealth held by the bottom 90 percent of families compared with those at the top.
Shortly before the Great Depression in the late 1920s, the bottom 90 percent held a mere 16 percent of U.S. wealth. The top 0.1 percent controlled 25 percent of it just before the crash in 1929. From then until the early 1970s, the middle-class portion of total wealth rose steadily while wealth among upper-class families fell. Much of this was due to more home ownership, but it also was reflected in middle-class salaries outdistancing inflation.
In the past 30 years, the wealth of the top 0.1 percent has soared. Right now, that group comprises 160,000 families worth $73 million on average, which is about 22 percent of the nation's total wealth, slightly less than the peak 85 years ago. This nearly equals the wealth of the bottom 90 percent.
The following chart shows one of the reasons for this growing wealth, the unequal growth in income during economic expansions in the post-World War II era:
It used to be that the bottom 90 percent of the population measured by income share gained the most from growth during a recovery from recession.
Immediately after World War II, the wealthiest 10 percent of Americans gained about 20 percent of the growth in income, unequal but not outrageously so. Ever since then, however, the bottom 90 percent has seen the growth of its income steadily fall. Come the 1980s, inequality worsened, and the wealthiest 10 percent's share of income growth soared from just over 40 percent to 80 percent, the opposite of the situation after the war. As you can see in the chart, that situation has gotten even worse in the past decade and a half. The top 10 percent actually gained more than 100 percent of the growth after the Great Recession of 2007-2009, meaning the bottom 90 percent saw their average incomes shrink.
That chart ends in 2012, so the situation is slightly better now. But the nasty trend is clear and no policies are in the offing to reverse it.
