Richest 1 percent earn biggest share since ’20s
FILE - In this 1928 file photo, Actress Joan Crawford is seen dancing the Charleston in "Our Dancing Daughters" in Hollywood, Calif. A report released, September, 10, 2013, shows that the very wealthiest Americans earned more than 19 percent of the countrys household income in 2012, their biggest share since 1928. And the top 10 percent captured a record 48.2 percent of total earnings last year. (AP Photo/File)
The gulf between the richest 1 percent and the rest of America is the widest it’s been since the Roaring ’20s.
The very wealthiest Americans earned more than 19 percent of the country’s household income last year – their biggest share since 1928, the year before the stock market crash. And the top 10 percent captured a record 48.2 percent of total earnings last year.
U.S. income inequality has been growing for almost three decades. And it grew again last year, according to an analysis of Internal Revenue Service figures dating to 1913 by economists at the University of California at Berkeley, the Paris School of Economics and Oxford University.
One of them, Berkeley’s Emmanuel Saez, said the incomes of the richest Americans surged last year in part because they cashed in stock holdings to avoid higher capital gains taxes in January.
In 2012, the incomes of the top 1 percent rose nearly 20 percent compared with a 1 percent increase for the remaining 99 percent.
The richest Americans were hit hard by the financial crisis. Their incomes fell more than 36 percent in the Great Recession of 2007-09 as stock prices plummeted. Incomes for the bottom 99 percent fell just 11.6 percent, according to the analysis.
But since the recession officially ended in June 2009, the top 1 percent have enjoyed the benefits of rising corporate profits and stock prices: 95 percent of the income gains reported since 2009 have gone to the top 1 percent.
The gap between rich and poor narrowed after World War II as unions negotiated better pay and benefits and as the government enacted a minimum wage and other policies to help the poor and middle class. The top 1 percent’s share of income bottomed out at 7.7 percent in 1973 and has risen steadily since the early 1980s, according to the analysis.