By Jheanelle Chambers, Intern
While many middle-class Americans are still struggling in a down economy, the 1% is doing quite well.
The Center on Budget and Policy Priorities has an eye-popping chart (right) showing that in 2009, despite the weak economy, the top 1% of households captured $1.32 trillion in gross income while the bottom 50% earned $1.06 trillion.
Economist Chuck Marr explains further at Off the Charts:
The long-term trend in the United States has been towards much greater income concentration at the top. But the trend isn’t perfectly smooth: high-income people tend to benefit more from economic expansions than other income groups but tend to get hit harder by recessions. The swings are particularly pronounced in financial booms and busts...
At the height of the previous expansion, in 2007, the top 1 percent had 87 percent more total [adjusted gross income] than the bottom 50 percent. But even the 2009 gap of “only” 25 percent — the difference between the $1.32 trillion earned by the top 1 percent and the $1.06 trillion earned by the bottom 50 percent — is pretty staggering.
The news gets even better for the 1% in 2010, as the Center on Budget and Policy Priorities’ Chad Stone explains in another Off the Charts post. After seeing a dip in income in 2009, the 1% was well on the road to recovery a year later, Stone writes, citing new data compiled by economists Thomas Piketty and Emmanuel Saez:
The Piketty-Saez data paint a clear picture of faster income growth and rising income concentration at the top over the past few decades. The dot-com collapse proved to be nothing more than a speed bump, and the financial crisis and Great Recession may turn out to have had similarly transitory effects.
With Tax Day approaching next week, maybe it’s time to call on lawmakers to take a page from the 1930s and 1940s and enact tax policies to slow down the growing income gap between the 1% and the rest of us that is so common today even in the worst of economic conditions.
Jheanelle Chambers served as a 2012 intern with the Pennsylvania Budget and Policy Center.