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

By Scott Winship of The Manhattan Institute. Excerpt:

"Saez uses a cost-of-living adjustment that overstates inflation. Using the best available measure, 54 percent of income growth went to the top 1 percent from 2009 to 2014. This means that the top 1 percent saw their incomes rise by 29 percent ($280,000), on average, and the bottom 90 percent saw a rise of 3 percent ($900).

While the top 1 percent of households received an outsize share of income growth during the recovery, they also suffered a disproportionate share of income losses during the Great Recession. From 2007 to 2009, real income declined in the U.S., with fully half the decline falling on the top 1 percent. The average income of the top 1 percent was 36 percent lower ($553,000, on average) in 2009 than in 2007. Among the bottom 90 percent, income was 12 percent lower ($4,300).

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. So far in this business cycle, there have thus been no income gains to divide between rich and poor (at least according to the Piketty-Saez data).

Meanwhile, an enormous share of the losses, 46 percent, has accrued to the top 1 percent. Even more stunning, the top 1 percent's income was essentially no higher in 2014 than in 2000--a fact that provides context to the income stagnation experienced by the U.S. middle class since 2000. To the extent that income growth has stalled, it has stalled for all Americans. The difference between what has happened at the top and elsewhere is that the top has seen large booms and busts while changes below have been more muted."