by Barry Burch Jr.
A lot can happen in 100 years, but sadly, the reverse is true for income. How are those pockets? A little light, right? Well, it’s not just you. A recently released study has concluded that the wealth gap between the top 1% and the bottom 99% in the U.S. is just as wide as it was back when Woodrow Wilson was president.
As reported by the Los Angeles Times, a study based on Internal Revenue Service statistics examined by economists at UC Berkeley, the Paris School of Economics and Oxford University, showed revealing information with regard to why income disparities are so large. Between 1993 and 2012, the real incomes of the 1% grew 86.1%, while the remaining 99% grew 6.6%.
And what qualifies as the top 1%, you might inquire . . . $394,001 per year or better in 2012.
While the top 1% percent certainly lost the most money during the Great Recession, they also recovered faster. According to the paper, from 2009 to 2012, as the U.S. economy improved, so did the incomes of the top 1%, and by as much as 31%, even; while the incomes of the 99% grew 0.4%.
Economist Emmanuel Saez of UC Berkeley wrote, “This implies that the top 1% incomes captured just over two-thirds of the overall economic growth of real incomes per family over the period 1993-2012.”
The income gap has been widening considerably since the 1970s. The same was not true following the 1929 stock market crash; however, which preceded the Great Depression, and the eventual World War II. For decades, incomes were significantly closer together in comparison with what they are today.
Saez draws the connection between the trend and what he believes to be its life-lines. The expert of economics says that beyond technology and job outsourcing, the power of progressive tax policies have been reduced, as well as the “changing social norms regarding pay inequality.”