Inequality Update

In case you missed it: the US is a wildly unequal society, and it’s getting worse by the hour.

No surprise at all, but nonetheless some of the data can be quite eye-opening. Allow me to point you to David Cay Johnston and some of his analysis.

• Incomes have grown between 2009 and 2011. Great. But 149% of that growth has gone to the top ten percent of all income earners. Yes. More than all the increase has gone to a small minority. You knew that right?
• How? Because income for the rest actually went down.
• According to the Internal Revenue Service data you needed an income of above $110,651 to achieve top ten percent status. $366,623 gets you into the top one percent.
• And it’s worth getting into that top one percent: 81% of all the extra income earned since 2009 has gone to that lucky group.
• Even better if you can squeeze into the top of the top. The top one percent of the top one percent – bear with me here – managed to make off with 39% of all the income gains nationwide. That’s 15,837 households if you’re counting. Out of 158,400,000 households.

Now Johnston gets cruel:

• If you are in the bottom 90% the average adjusted gross income – AGI to tax geeks – was $30,437. That’s going in the wrong direction, and is the lowest, when adjusted for inflation, since 1966. Read that again. Now weep.
• To put this in context: allowing for inflation the AGI of the bottom 90% of tax paying Americans had risen precisely $59 since 1966. $59. Now weep again.
• Let’s give this even more context: the increase in average AGI for the top 10% rose by $138,793, or 84%, over the same period. Do I need to say it again? Weep!

One last trick: if we make that $59 gain the majority managed to eke out equivalent to a one inch line, the gain the lucky 10% received is a line extending 163 feet. And the line the even luckier top 1%? Well, their line goes on and on. For nearly five whole miles.

OK enough weeping.

Clearly something is amiss in the land of opportunity.

The game is rigged.

Is that a problem?

You bet it is.

Addendum:

The chain of analysis on which Johnston depends has its origins in the work by Thomas Piketty and Emmanuel Saez. You can find an example here.