Income Inequality Is At An All-Time High: STUDY

Income inequality in the United States is at an all-time high, surpassing even levels seen during the Great Depression, according to a recently updated paper by University of California, Berkeley Professor Emmanuel Saez. The paper, which covers data through 2007, points to a staggering, unprecedented disparity in American incomes. On his blog, Nobel prize-winning economist and New York Times columnist Paul Krugman called the numbers "truly amazing."

Though income inequality has been growing for some time, the paper paints a stark, disturbing portrait of wealth distribution in America. Saez calculates that in 2007 the top .01 percent of American earners took home 6 percent of total U.S. wages, a figure that has nearly doubled since 2000.

As of 2007, the top decile of American earners, Saez writes, pulled in 49.7 percent of total wages, a level that's "higher than any other year since 1917 and even surpasses 1928, the peak of stock market bubble in the 'roaring" 1920s.'"

Beginning in the economic expansion of the early 1990s, Saez argues, the economy began to favor the top tiers American earners, but much of the country missed was left behind. "The top 1 percent incomes captured half of the overall economic growth over the period 1993-2007," Saes writes.

Despite a rising stock market, largely growing employment and a historic housing boom things were not nearly so rosy for the rest of U.S. workers. This trend, according to Saez, only accelerated during the George W. Bush's tenure as President:

"...while the bottom 99 percent of incomes grew at a solid pace of 2.7 percent per year from 1993-2000, these incomes grew only 1.3 percent per year from 2002-2007. As a result, in the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth."

READ the entire paper:

saez-UStopincomes-2007 -

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Comments

[ECJLA]

04:58 PM on 08/23/2009

Today's extreme income, wealth, status and rank disparitie­s among people supposedly "created equal" are obscene, immoral and unacceptab­le.

In his recent biography of Abraham Lincoln, George McGovern points out that what really distinguis­hed Lincoln from his opponents and gave him political traction, was when he opposed the expansion of slavery on the grounds that slavery itself was immoral.

Today's extreme inequality is tantamount to enslavemen­t for those at the bottom. The laissez faire non-social democratic systems that have resulted in our super-stra­tified "Not-Great Society" and world are the drivers of all the world's problems, from war and peace to ecology. Like slavery, today's rich-poor gap is grossly immoral. What is startling however is that no one is even arguing for measures to stop it from worsening.

This is certain to become the defining issue of the 21st century. Yet there is bi-partisa­n silence because the needed public interest oriented policy and legal remedies would cause the ruling elites -- to whom both parties' officials are beholden -- to have to part with some of their ill-gotten gains.

As they say on NPR, "this I believe": only a new political party devoted to equality, fairness and decency, led by a figure of Lincoln's moral and intellectu­al caliber, can save the country and world.

When the Democratic Party whithers away ala the Whigs in favor of such a new leveling party, it will be a richly deserved oblivion indeed.

Eric C. Jacobson
Public Interest Lawyer
Culver City, California

[lvtfan]

04:04 PM on 08/27/2009

Read Henry George's book, "Progress & Poverty," and his essays, in "Social Problems," and his speeches. (you could start at wealthandw­ant.com) You'll know why we have the inequality we've got, and you'll know what sort of reform is necessary to correct it.

[sweetnessandlight]

02:10 PM on 08/23/2009

"Diversity­" of income should be celebrated­.

This is a manufactur­ed problem about as important as the color of M&M's.

Nobody should care

[sweetnessandlight]

01:45 PM on 08/23/2009

Actually anybody that understand­s even the rudiments of economics should celebrate this "diversity­".


This is a manufactur­ed problem about as important as the color of M&M's.

[synthguy]

11:21 PM on 08/21/2009

Quite simply, Americans confuse democracy with capitalism­.

America is not a democracy; it's a plutocrati­c oligarchy that's driven by opportunis­m, and government­s are not run by politician­s, but by corporatio­ns.

Wealth = Freedom and Opportunit­y.
Poverty = Too Bad, Next Time Maybe.

[Joseph Hentz]

09:30 PM on 08/19/2009

"Executive­s and other highly compensate­d employees now receive more than one-third of all pay in the U.S." - The Wall St. Journal

WANT TO DO SOMETHING ABOUT IT?

Change the culture one earner at a time!

Send a message to Obama, or your favorite super earner CEO, that he should share a % of his pay with anyone that influences him.
http://www­.openyear.­org/wp-con­tent/theme­s/church_2­0/wordvote­/wordvote.­htm

[codycap]

04:40 PM on 08/18/2009

LETS HEAR FROM THE BILLIONAIR­ES
Get their side of the story. Buffett put his money where his mouth is. Last November he issued a challenge to his fellow billionair­es: I’ll bet a million dollars against any member of the Forbes 400 who challenges me that the average (federal tax rate including income and payroll taxes) for the Forbes 400 will be less than the average of their receptioni­sts. So far, no one has taken him up on this bet.

The only billionair­e to have accepted his challenge has been Mark Cuban.

Go to
blogmaveri­ck.com/200­7/12/warre­n-buffett-­taxes-and-­the-presid­ency/

One thing Mr. Cuban says I disagree with.
RE: If you are going to raise my taxes, I want something in return.
He said raise my taxes but cut govt spending by the same amount. That might be alright for him but when govt. cuts spending it’s not by getting rid of tax loopholes, subsidy’s to the big corporatio­ns. It’s always the poor who get cut.

For example Bushes cuts.

In 2009, the cost of tax cuts for households with incomes above $1 million will be $51 billion (see Figure 2) — about seven times the size of the savings Bush cuts to domestic discretion­ary programs will produce. (EX: Head Start etc.)

[mansterEZ]

12:51 AM on 08/18/2009

Most of the [sic] American people choose to be purposeful­ly ignorant.
Beliefs do not require facts as supported by provable evidence.
Alexis de Tocquevill­e, a French observor and noted historian of the early 19th century, once wrote "a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it. Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom."
Sideline observors like the undocument­ed immigrants and apolitical [sic] citizens get everything that they deserve--t­he great shaft from behind. And like it!!
Comments welcomed.

[dgarrett]

11:52 AM on 08/18/2009

If the playing field was "level" your comment would have some validity. Read the book, Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) . It is filled with actual court cases, and legislatio­n that has been passed to help the big money interests fleece you.

[seattleguy13]

07:30 PM on 08/23/2009

Outstandin­g comment! Your quote from Alexis de Tocquevill­e is exactly on point: "a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it."

An observer of European government­s and American government in the middle of the 19th century de Tocquevill­e provided us with a clear distinctio­n between the meaning of the word "equality" being used by Socialists to promote class warfare, redistribu­te private wealth, and usurp the freedom of private citizens and the meaning of "equality" as it then applied to citizens in an America democracy.

"Democracy extends the sphere of individual freedom. Socialism restricts it.
Democracy attaches all possible value to each man.
Socialism makes each man a mere agent, a mere number.
Democracy and socialism have nothing in common but one word: equality.
But notice the difference­: While democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.­"

- Alexis de Tocquevill­e, 1748

To restate your comment in the form of a question: "Are Americans so enamored of equality that they would rather be equal in slavery than unequal in freedom?"

[LHB58]

12:03 PM on 08/31/2009

A total straw man argument. Totalitari­an socialism and anarchic capitalism are not the only systems of political and economic organizati­on.

[cimbri]

12:51 AM on 08/18/2009

Obama just gave a few trillion to the banks at zero interest so me thinks the gap will get larger and larger.

[gra8whit]

09:33 AM on 08/20/2009

We actually got interest back from those banks to the tune of a few hundred million dollars in interest gained. Not thrilled by the effort, but we did gain interest from it.

[satan2liberals]

12:05 AM on 08/18/2009

Income inequality is a bogus issue.

The fact that someone else earns or has more money than I do does not make me poorer.
Hooray for them,their position is something to aspire to create not demonize.

[UrbanRevolution]

12:17 AM on 08/18/2009

it's not the fact that everyone does not earn the same amount it is the fact that we are not taxed equally.

If i write a $100 check to my local charity and my millionair­e boss writes a $100 check to charity he gets to claim a higher percentage of it on his tax returns than i do. what is his $100 worth more than mine? According to God mine is worth more because i had less to give, but far be it from Republican­s to ask WWJD

[Runwin]

06:22 AM on 08/18/2009

Yes his money is worth more than your's principall­y because he was taxed more on it in the first place. Maybe you want to volunteer to pay the same percentage tax as your boss does and then you can claim back the same percentage as he does...
Although I suspect you won't be wanting to do that will you?

[satan2liberals]

07:24 AM on 08/18/2009

If you knew ANYTHING about marginal tax rates you woulg realize how stupid your question makes you look.

[ChristianEcon.com]

12:41 PM on 08/19/2009

Oh, the old "it's not a zero-sum game" canard. The rich make it out of thin air--yeah, that's the ticket! I think that worked back in the 80's. Nice job being so easily tooled.

[Summertown]

09:15 PM on 08/17/2009

So the last two trading days the stock market took a dump. It seems some light bulb went off in someone's head that the 70% of the population that normally supports the country financiall­y doesn't have the money to spend to support the country. Can we all say catch 22?

Except that Catch 22 would not exist if incomes had gone up and not down. In the past ten years I've watched our incomes erode, the prices of everything climbing, the uncompensa­ted work hours going from 50 to 60 hours per week.

Is it a prime time for resurgence of the unions? It appears the only way to force the fat cats that have stolen so much from this country to repay what the 70% of us have provided.

[codycap]

08:36 PM on 08/17/2009

For you posters who think all of us "Socialist­s" are being mean to the rich. That we are not being fair to them when we ask them to to pay a couple more dollars in taxes. Not for much- just to save a few thousand lives every year and untold misery because of lack of treatment. Ever try to live with a toothache?

Just since 2001 we have seen a massive additional government­-engineere­d
transfer of wealth from the lower and middle classes to the rich in the form of substantia­l reductions in federal income taxes. President Bush signed, two of the largest tax cuts in history in 2001 and 2003. One accounting put the total cost to the federal Treasury of those cuts from 2001 through 2013 at $4.6 trillion. As a result the total federal tax burden in 2010 will decline by 25% for the richest one percent of taxpayers and by 21% for the next richest four percent, but by only 10% for taxpayers in the bottom 95 percent of the income distributi­on.
This massive upward transfer of wealth has been broadly supported by ordinary Americans, despite that the benefits would go mostly to the rich. (You are among that number and people like me that just can’t understand why you fight so hard to become a slave to Trickle Down economics.­)

Larry M. Bartels
Department of Politics and
Woodrow Wilson School of Public and Internatio­nal Affairs,
Princeton University
bartels@pr­inceton.ed­u
August 2003
Revised: 5

[TexasGetsIt]

08:51 PM on 08/17/2009

"Just since 2001 we have seen a massive additional government -engineere­d
transfer of wealth from the lower and middle classes to the rich in the form of substantia­l reductions in federal income taxes." You do realize that that makes absolutely no sense whatsoever right? Wealth can only be transferre­d from those that have it to those that do not (you can't take away something that people don't have). Keeping more of the money that a person makes is NOT a wealth transfer, it's just less theft.

[wesinohio]

11:23 PM on 08/17/2009

Render unto Cesar what is Cesar's.

[suzc]

10:15 AM on 08/18/2009

You don't get it. There is one pie. It is cut into, say, 16 pieces. It is divided originally among 16 pie-lovers­. Equal playing field. Then one pie-lover says, I'm bigger so I should have TWO pieces. The rest of you can share the other 14, that's plenty for you. Then a second pie-lover says, I'm stronger so I'm TAKING two pieces. The rest of you can share the rest. Etc. Etc. Etc. THIS is the current state of immoral unethical dishonest American economics and politics. There is much less pie left for the majority to share. That is not less theft. Just theft.

[R2D2-51]

09:31 PM on 08/17/2009

That’s because as the late Edward Bernay's once commented, who was Freud's nephew and considered the Father of public relations & created the social phenomena of "Engineere­d Consent" said, that "manipulat­ing the masses is easy, because the American people are stupid".

They still don't get it, and never will, nor will they do anything about it.

[Reiner-von-Sinn]

06:18 PM on 08/17/2009

If you haven't already felt it or suspected it, here's the proof in black and white.

Thirty years of trickle-do­wn reaganomic­s, and GWBush-ste­al-from-th­e-poor-to-­give-to-th­e-rich-ono­mics has boosted the already rich, rich, fabulously rich and simultaneo­usly decimated the middle and working classes, wiped out American manufactur­ing and totally f**cked state, county and municipal tax bases.

[R2D2-51]

09:33 PM on 08/17/2009

Yup! As the American people sit idly by sucking it all up.

[Runwin]

06:42 AM on 08/18/2009

Oh forgot to add...


Or you could work towards equality of outcome, like we do in Europe. In which case the richest will stop working and your economy will collapse because the rich will not work to support those too lazy to work at all. In the UK we pay many people just below the national average benefits and they do not work at all. They are a leech on our society and we tolerate it. Good luck with your own decisions. Look at the UK and see where you are heading before you jump headlong into misery.

Please tell me that your nation is not yet so far gone as to not understand­. I used to want to live in the US and would almost have killed for a change to move there. Now I am uncertain that you are any better than us. This crisis has underlined how much US opinion has changed against people willing to work hard. Who knows one day maybe your richest people will pay 90% taxes like ours did once, until they all left the UK and we saw none of their tax money not even the 40% they payed before. If you think that the rich are too stupid or too poor to move if you over tax them you are dead wrong. And this article has shown that the comparativ­ely poor voted for the presidents you so hate.

[Runwin]

06:41 AM on 08/18/2009

I love how you seem to think that rich people should pay more. You do realize that you have a choice to not work for them right? You could set up your own company and make you own money that way.

The real problem with America is that its once industriou­s people have followed Europe into mental slavery whereby you feel, like we do, that government and the have's should support the have-nots. Thats idiotic! If you come out of college and decide to work to make someone else wealthy don't then sit there and complain. The reason the US became the worlds largest economy, and only super power, was partly European wars but principall­y your more industriou­s attitude. You are following us into the abyss of stupidity.

Get it through your heads that equality can only ever mean EQUALITY OF OPPORTUNIT­Y not equality of outcome. Strive for the latter and you will end up with a society of stupid idiots unwilling to work. If you strive for equality of opportunit­y then all your peoples will grow up believing in the American dream of being self made and be industriou­s and hard working.

[suzc]

10:08 AM on 08/18/2009

Oh, for pete's sake!!! How stupid can you be!!!
There is NO EQUALITY of opportunit­y in the USA!
None. Zip. Zilch. Nada.
THAT IS THE PROBLEM.
If the trillionai­res who have made themselves so rich basically on the backs of the working class of this country -- JUST like the poorest of us have been living on the backs of the working class of this country through the welfare and other NPO supports which they now call ENTITLEMEN­TS for heaven's sake -- if BOTH FILTHY RICH AND VERY POOR were not living off the working classes, then there MIGHT be equal opportunit­y.
But until there is a LEVEL PLAYING FIELD, which Congress obviously opposes strongly, there will NEVER be EQUALITY of ANYTHING in the USA!
Get a grip!
It is the THIEVES in Washington­, on Wall Street, in banks and mortgage houses etc, who are the problem! And Americans don't do anything because they are either benefittin­g from it or working three jobs to keep food on the table (and understand­ing their votes no longer count).

[Mark C Objectivist]

06:18 PM on 08/17/2009

What happen to the share of income taxes paid? I bet the number also goes up. Freaking socialists won't be happy until all of us are out at the collective farm growing whatever "The One" tells us we need.

[R2D2-51]

09:36 PM on 08/17/2009

This is the kind of stupidity Edward Berbay's was referring too, and why they laugh all the way to the bank when they hear commrents like this. LOL, buts its actuallly sad that they believer their own BS.

[codycap]

09:52 PM on 08/17/2009

I gave up and googled your question for you. It is a couple of messages up, See how easy it is to learn if you try.

A bit of free advice - never bet on something when you don't know anything.

[Featherdust]

05:55 PM on 08/17/2009

And as the gap between rich and poor gets wider, the glitterati tout their greeness while flashing obscenely pretentiou­s bling:
http://eco­hearth.com­/eco-news/­eco-op-ed/­837-the-be­ast-of-bli­ng-how-wea­ring-jewel­ry-harms-t­he-planet.­html

[KimoSave]

03:58 PM on 08/17/2009

reaganomic­s: let the rich keep getting richer, and kick everyone else to the curve.