“Gains from Economic Recovery Still Limited to Top One Percent,” says Justin Wolfers
“By this measure, the concentration of income among the richest Americans remains at levels last seen nearly a century ago,” says Justin Wolfers in his January 27, New York Times Upshot column, “Gains From Economic Recovery Still Limited to Top One Percent.” That measure, based on data from the Internal Revenue Service, reflects the “share of total income going to the top 1 percent” in 2013, he added.
A century ago, the U.S. was about a decade and a half away from the largest economic crisis in U.S. history and a few more years removed from President Franklin D. Roosevelt’s New Deal policies that dramatically expanded the social safety net through higher taxes on the wealthiest Americans.
Fast forward to today, Wolfers has noted that the 2013 data may be more puzzling than they initially seem. He pointed out that the question on everyone’s mind now is “why robust employment growth over recent years – much of it concentrated in middle-class occupations – has not translated into larger income gains for the broader population.”
Ultimately, Wolfers suggests that patience may be advised, noting that more recent upticks in employment could be contributing to a “more broadly shared growth” that will be reflected in next year’s report on family income for 2014.
--By Nick Pfost (MPP '15)
Justin Wolfers is a professor of public policy and economics at the University of Michigan and a senior fellow with the Peterson Institute for International Economics.