Have All the Income Gains Gone to the Top 1 Percent?

Have All the Income Gains Gone to the Top 1 Percent? | Economics21
To read the full report, click here.

"Some on the political left have used analyses by French economists Thomas Piketty and Emmanuel Saez to argue that the "top 1 percent" have captured all of America's post--Great Recession economic gains. 

This claim has no basis in fact. 

Focusing only on the recovery leaves out vital context, too: higher-income households see the largest losses during recessions and largest gains during recoveries. 

Painting an accurate picture requires a time frame that includes both.

Saez releases new inequality estimates every year, along with a summary of inequality trends and levels. 

The claim that all gains have gone to the top 1 percent of U.S. households comes from his January 2015 summary, where he noted that 91 percent of the income growth in the U.S. between 2009 and 2012 went to the top 1 percent of tax units. 
But Saez's June 2015 summary updated his data through 2014 and reported that the top 1 percent had received 58 percent of income gains from 2009 to 2014.

...All told, in 2014, the top 1 percent was still poorer, by 18 percent, than it was in 2007, compared with a 9 percent decline for the bottom 90 percent. 

None of this is to deny that income inequality has risen in America in recent decades. 

But all the gains have not gone only to the top, and the rise in income concentration has been considerably less severe than widely acknowledged. 

Indeed, claims that only the very top earners benefit from economic growth--or that the rich are unaffected by recessions--are patently false. 

U.S. income data reveal that an economy that works for those at the top is also one that works for everyone."

This is an excerpt from the new Manhattan Institute report, "Reality Check: The Top 1 Percent Have Suffered Nearly Half of All Losses in This Business Cycle." To read the full report, click here.