A new analysis from the University of California, Berkeley’s Emmanuel Saez shows that income inequality at the national level has grown during the economic recovery, with only the wealthiest seeing significant income gains. The data can be downloaded as a Microsoft Excel file here. Here are some highlights:
- Income gains were uneven. Between 2009 and 2012, the last full year for which data are available, the average inflation-adjusted family income grew by 6.0 percent. However, incomes grew by 31.4 percent for the top 1 percent of families and only 0.4 percent for the bottom 99 percent.
- These uneven gains come after severe drops during the Great Recession. According to Saez, the average inflation-adjusted income per family declined by 17.4 percent between 2007 and 2009, the largest two-year drop since the Great Depression. The top 1 percent saw even greater losses of income, with a decline of 36.3 percent.
- For high-income earners, the impact of the Great Recession was temporary. Even though the top 1 percent of families saw far more severe drops in average income during the recession than did other families, this was only temporary. As Saez writes, “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. Indeed, the top decile income share in 2012 is equal to 50.4%, the highest ever since 1917 when the series start.”
These new data show a trend we highlighted last week in our annual Labor Day report: Large groups of workers are not yet seeing a recovery. Here in California, wages remain depressed relative to their pre-recession levels for all but high-wage earners, and wage inequality continues to rise even as the labor market has grown for more than three years.
— Luke Reidenbach