usa inequality

SOYMB produces more on the phantasm of the American Dream.

Americans feel significantly more alienated in 2005, according to a Harris Interactive poll, with three-quarters of US adults saying they feel the "rich get richer and the poor get poorer," up from 68% in 2004.

From 1993 to 2007 average real incomes per family grew at a 2.2% annual rate (implying a growth of 35% over the fourteen year period). However, if one excludes the top 1%, average real income growth falls to 1.3% per year (implying a growth of 20% over the thirteen year period). Top 1% incomes grew at a much faster rate of 5.9% per year (implying a 122% growth over the fourteen year period).This implies that top 1% incomes captured half of the overall economic growth over the period 1993-2007.Professor Emmanuel Saez of the University of California, Berkeley, has produced several studies on inequality in America and says, in the economic expansion of 2002-2007, the top 1% captured two thirds of income growth.The share of wage and salary income has increased sharply from the 1920s to the present, and especially since the 1970s. Therefore, a significant fraction of the surge in top incomes since 1970 is due to an explosion of top wages and salaries. Indeed, Saez says estimates based purely on wages and salaries show that the share of total wages and salaries earned by the top 1% wage income earners has jumped from 5.1% in 1970 to 12.4% in 2007.

In 2007, the top decile includes all families with market income above $109,600. The overall pattern of the top decile share over the century is U-shaped. The share of the top decile is around 45% from the mid-1920s to 1940. It declines substantially to just above 32.5% in four years during World War II and stays fairly stable around 33% until the 1970s. After decades of stability in the post-war period, the top decile share has increased dramatically over the last twenty-five years and has now regained its pre-war level. Indeed, the top decile share in 2007 is equal to 49.7%, a level higher than any other year since 1917 and even surpasses 1928, the peak of stock market bubble in the “roaring” 1920s.

A paper published by the Center for American Progress in Washington in 2006 showed that the chances of Americans remaining in the same bracket as their parents was higher than in every other developed country barring the UK (with which the US was almost level-pegging). Over the last generation, an American child born in the bottom-fifth income group had just a 1% chance of becoming rich - - defined as the top 5% of American earners - - whereas someone born rich had a 22% chance of remaining rich as an adult.