Danziger supports study's formula for gauging "the 1 percent"

April 23, 2012

Sheldon Danziger, director of the National Poverty Center and professor of public policy, was cited in a New York Times op-ed addressing the use of research in framing the public debate over income inequality in America.

A new study by economists Emmanuel Saez of the University of California, Berkeley and Thomas Piketty of the School of Economics in Paris looked at individuals' "market income"—total pre-tax income, not including any transfer payments from government, like unemployment or Social Security—to track the concentration of the nation's wealth.

Looking at tax returns from 1970-2010, Saez and Piketty found that the average pre-tax income for Americans outside the top 10 percent had declined, while the top 0.01 percent saw theirs rise nearly eight-fold. According to the author, "For those in the top 0.01 percent, market income rose from $2.14 million a year in 1970 to $16.27 million in 2010. The gains at the top from 1970 to 2010 stand in contrast to the post-war period from 1945 to 1970 when the share of income going to those at the top fell."

In support of the study's methodology and findings, Danziger was quoted as writing, "Only the I.R.S. data have large enough samples to focus on the very rich." Conversely, Danziger noted that the Census Bureau's Current Population Survey also provides data on individual income, but "is too small to examine the top 1 percent."