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Wednesday, March 14, 2007
Latest Data on Income Inequality
Via Brad DeLong, this from income trend expert and Berkeley professor Emmanuel Saez
The IRS has released yesterday the preliminary stats for year 2005 which I have used to extend my [and Thomas Piketty's] series [on the top income share by tax return unit] to 2005, posted at: http://elsa.berkeley.edu/~saez/TabFig2005prel.xls
2005 shows a very large increase in income concentration: the top 1% gains 14% in real terms from 2004 while the bottom 99% gains less than 1% (when including capital gains). The [previous] record peak of 2000 is surpassed even though 2005 is less of a high capital gains, high stock option year than 2000. By 2005, it looks like top incomes are showing strongly along all components: wages, business income, dividends, and capital gains.
The striking thing about 2003-2005 is the huge increase at the top with quasi-stagnation below the top 1%. In the late Clinton years, the top gained enormously but at least the bottom was also making progress...
I downloaded the data and combined it with the Census Bureau's and put together this illustration. While the bottom 80% of income earners in the U.S. saw their shares of income decline, the top 0.01% saw their share quadruple.
 (click to enlarge)
Posted by Craig Jennings
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