How Much Better Are the Super-Rich Doing Than 99% of Americans?
What does a "winner-take-all" economy look like? This:
Between 1979 and 2007, income for nine of 10 Americans rose a total of five percent, or an average of 0.2 percent annually, according to the Economic Policy Institute. All of that growth came from 1997 to 2000, while income for this group fell thereafter, the think-tank notes.
Over that same period, income for the top 1 percent of U.S. households (which on average earn $960,000 a year in today's dollars) went up 224 percent, or an average of 8 percent annually. Nice! But not as nice as what the top 0.1 of households ($1.7 million in annual earnings) got -- their income during that time grew 390 percent. Their share of the nation's earnings also more than quadrupled.
What's driving that widening income disparity? Two related trends, explains The New Republic's Timothy Noah:
Trend One: People at middle incomes have lost ground to people at higher incomes. As I explained in a Slate series last year, there were multiple causes for this. Inadequate K-12 education and the decline of private-sector labor unions were major reasons; trade was for most of the period irrelevant, though it became more relevant as trade with China and Mexico increased during the aughts; immigration had a negligible effect; race and gender had no effect at all; and government policy had an enormous impact (though weirdly mostly not through tax policy, which intuition would suggest would be the principal driver). If you don't like income inequality then don't vote Republican.Wealth zooms to the topTrend Two is the huge increase in income share for the top 1 percent. This appears to be far less complex in its causation. The principal reasons were almost certainly dramatic changes in the way Wall Street did business and runaway pay increases for top executives in non-financial industries.
Income consists of payments like wages, salary, dividends and capital gains on investments. So how has the distribution of wealth, or net worth -- which also includes things like the value of a person's home, what folks have in the bank, stock ownership and retirement funds -- changed in recent decades? EPI has a good chart on that, too:
Between 1983 and 2009, the wealthiest 5 percent of Americans saw their piece of the pie grow from roughly 56 percent to 64 percent. Over that period, the share of wealth held by the bottom 80 percent fell from 19 percent to 13 percent.
Note that these trends persist in good times and bad. Wealth is being redistributed upward no matter who occupies the Oval Office. It's not only the U.S. economy that has mutated over the last 30 years into a feeding trough for the wealthiest Americans, in other words -- it's also our politics.
If the numbers above were medical symptoms, the patient would be heading straight to the OR. The diagnosis is clear: Economically, this nation is a far less equal place than it used to be.