Wednesday, March 07, 2012
THEORY OF ECONOMIC EVOLUTION: SURVIVAL OF THE RICHEST
The Huffington Post Alexander Eichler
First Posted: 03/ 5/2012 11:31 am Updated: 03/ 5/2012 5:44 pm
Technically, the economy has been in recovery for two years. But it turns out the rich have been doing most of the recovering.
In 2010 -- the first full year since the end of the Great Recession -- virtually all of the income growth in America took place among the country's very wealthiest people, says an economist at the University of California, Berkeley. The top 1 percent of earners took in a full 93 percent of all the income gains that year, leaving the other 7 percent of gains to be sprinkled among the vast majority of society.
Those numbers come courtesy of Emmanuel Saez, the Berkeley economist who co-created a resource known as the World Top Incomes Database. Saez and his colleagues crunched the data on income growth from 2010, the most recent year available, and found that it was shockingly lopsided.
While much of the country is simply treading water, with a growing number of people either edging toward poverty or already there, the richest of the rich seem to be coping nicely.
Saez's findings suggest that even though the recession dealt a blow to the 1 percent, it did little to push the U.S. off the path it's been on for decades -- that of a vast and growing disparity between the richest and poorest citizens.
Income for most workers has barely risen in the last 30 years, but the top 1 percent of earners have seen their income almost triple in the same amount of time. Economists and other experts say that could be the result of any number of factors, including the decline of labor unions, the explosion in capital gains during the middle part of the aughts, and tax policies put in place in recent years that favor the wealthy.
In his State of the Union address this past January, President Obama called economic fairness "the defining issue of our time," perhaps mindful of the growing number of voters who say they can't even afford basic necessities like food.
The wealth gap has been cited as a major concern for the nationwide Occupy movement, and research has suggested that income inequality might be associated with the kind of underwhelming economic growth the country has experienced for the past two years.