US Income Gap Widened in 2015 07/01 06:12
WASHINGTON (AP) -- Financial inequality became even wider in the United
States last year, with average income for the top 1 percent of households
surging 7.7 percent to $1.36 million.
Income for the richest sliver rose twice as fast as it did for the remaining
99 percent of households, according to an updated analysis of tax data by
Emmanuel Saez, an economics professor at the University of California, Berkeley.
Still, the incomes of households outside the top 1 percent appear finally to
be recovering from the Great Recession, which officially ended seven years ago.
After accounting for inflation, their average income rose 3.9 percent last year
to $48,768 --- the strongest annual gain since 1998. Contrast that with the
period from 2008 to 2011, when the economy remained in a rut and
inflation-adjusted income for the bottom 99 percent of households was falling.
"It is indeed the best growth year for the bottom 90 percent and bottom 99
percent since the late 1990s," Saez said. "At the same time, top incomes grow
even faster, leading to a further widening of inequality, which continues an
Income inequality has been a rallying cry of the 2016 election, with more
Americans turning fearful and angry about a shrinking middle class. Donald
Trump has pledged to restore prosperity by ripping up trade deals and using
tariffs to return manufacturing jobs from overseas. Hillary Clinton has backed
a debt-free college option and higher minimum wages to help the middle class.
Much of the debate has been fueled by research conducted over the years by
Saez and his collaborator Thomas Piketty.
The IRS data reviewed by Saez shows that income growth last year was
greatest among the super-wealthy --- the top 0.1 percent of households. Their
incomes climbed nearly 9 percent to an average of $6.75 million.
The tax data helps capture income inequality more fully than government
surveys, which often fail to include the tiny fraction of ultra-rich Americans
who play professional sports, star in Hollywood blockbusters, manage global
corporations or trade successfully in the financial markets.