Friday, 10 September 2010

How America shares the wealth

The Economic Policy Institute, yet another of those Washington think-tanks but this time with a substantial financial contribution from the trade union movement, has recently published a revealing analysis of how modern day America shares its wealth. 
According to the Congressional Budget Office, between 1979 and the start of the current recession in 2007, the pre-tax incomes of the upper 1% grew 214%, while the incomes of the middle-fifth and lowest-fifth grew, respectively, 25% and 4%. As the Chart shows, this extremely unbalanced growth implies that 38.7% of all of the income growth accrued to the upper 1% over the 1979-2007 period: a greater share than the 36.3% share received by the entire bottom 90% of the population.
 The Institute found that those in the top 10% of the income scale received 63.7% of all the income growth generated over the 1979-2007 period. In contrast, the bottom 20% of all earners saw such a small share of income growth – just 0.4% – that it barely shows up on the included pie chart.
Note: “Upper-middle fifth” (60-80%) refers to those in the income scale who make more than 60% of earners but less than the top fifth.  “Lower-middle fifth” refers to those who fall in the lower 20-40% range of the income scale.
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