Over the last generation or two, Americans have probably come to expect reports that show an increasing concentration of wealth at the very top of the income scale. But this week was nevertheless jarring: we haven’t seen anything like the status quo since the government started keeping track.
As USA Today reported, “The top 1% of earners in the U.S. pulled in 19.3% of total household income in 2012, which is their biggest slice of total income in more than 100 years, according to a an analysis by economists at the University of California, Berkeley and the Paris School of Economics at Oxford University.” Researchers relied on data from the IRS.
Chad Stone and the Center on Budget and Policy Priorities put the trend in visual form.
We haven’t, Stone reported, seen income distribution like this “since the 1920s.”
Also note, we’re not just talking about the top 10% faring better than everyone else. As Paul Krugman explained this morning, “Of the gains made by the top 10 percent, almost none went to the 90-95 group; in fact, the great bulk went to the top 1 percent. The bulk of the gains of the top 1, in turn, went to the top 0.1; and the bulk of those gains went to the top 0.01. We really are talking about the flourishing of a tiny elite.”
In fairness, it’s worth emphasizing that some of this is the result of one-time factors. Annie Lowrey noted in the New York Times the other day that some of the rich likely cashed in some investments in 2012, before some higher taxes kicked in on the very wealthy on Jan. 1.
Still, the larger tend on income concentration is hard to miss.
As for the political angle to this, Democrats tend to see this as evidence of systemic economic changes and the need for a strong labor movement. Republicans tend to see this as a conversation that must not happen – to even notice the growing income inequalities is “class warfare” that’s better left for “quiet rooms” where few can engage in the debate. Some notable GOP figures have even condemned casual references to the middle class.
Indeed, the 2012 Republican Party platform called for … more tax cuts for the rich.