Class war: the rich are winning
August 14th, 2009Income inequality in the United States is at an all-time high, surpassing even levels seen during the Great Depression.
A recently updated paper by U. C. Berkeley Professor Emmanuel Saez covers data through 2007 and shows a staggering, unprecedented disparity in American incomes.
In a brief column titled “Even more gilded” Paul Krugman calls the latest inequality numbers “truly amazing.”
Saez’s paper is available on the web: Striking it Richer: The Evolution of Top Incomes in the United States. This is the concluding passage:
The labor market has been creating much more inequality over the last thirty years, with the very top earners capturing a large fraction of macroeconomic productivity gains. A number of factors may help explain this increase in inequality, not only underlying technological changes but also the retreat of institutions developed during the New Deal and World War II – such as progressive tax policies, powerful unions, corporate provision of health and retirement benefits, and changing social norms regarding pay inequality. We need to decide as a society whether this increase in income inequality is efficient and acceptable and, if not, what mix of institutional reforms should be developed to counter it.
A stunning portion of growth has been captured by the very rich over the past 15 years, regardless of which party occupied the presidency or held sway in Congress. Between half and two thirds has gone to the top 1% .