TWO AMERICAS, THE RICH AND EVERYONE ELSE

In a recent article in the NYTimes reported that the fruitsof economic expansion are going to the rich.  In fact, according to an analysis by Pavlina R. Tcherneva an economist at Bard College there has been a disturbing trend since world war 2 that has seen increasing fraction of income growth going to the top 10% and especially to the 1%. 

Professor Tcherneva has been able to show this with two charts, the first showing the portion of increased income during each post-recession recovery that went to the top 10% of richest Americans.

The chart above demonstrates in a simple format the way the economy has been skewed during recoveries toward the more wealthy Americans.  For example, in the recovery of 1949 to 1953, 20 percent went to the top 10% of wage earners.  In the 2001-2007, the share of this upper income decile grew to 89% with only 2% of left for the 90% of Americans.  In the most recent recovery, the upper 10% has grown to 116% which means that the 90% of less wealthy Americans actually saw, during the recovery, their income drop by 16%.

The second chart provides the same information broken down into the top 1% and the remaining 99%.  Not surprisingly, it shows even greater concentration of income going to the top 1%.

All of this demonstrates that while the recovery from the Great Recession of 2008 officially ended in 2009, for the majority of Americans, it continued.  We really do have two Americas, the those at the top and everyone else.