"Welcome to the 1% Recovery"

Mike Konczal (New Deal 2.0):

As the 1% reap 93 percent of the income gains from the recovery, we’re rapidly returning to pre-New Deal levels of inequality.

There was a brief debate focused on the following question: would the gains of the economy continue to accrue to the top 1% once the recovery started, or would they have a weak post-recession showing in terms of raw income growth as well as income share of the economy? The top 1% had a rough Great Recession. They absorbed 50 percent of the income losses, and their share of income dropped from 23.5 percent to 18.1 percent. Was this a new state of affairs, or would the 1% bounce back in 2010?

We finally have the estimated data for 2010 by income percentile, and it turns out that the top 1% had a fantastic year. The data is in the World Top Income Database, as well as Emmanuel Saez’s updated “Striking it Richer: The Evolution of Top Incomes in the United States” (as well as the excel spreadsheet on his webpage). Timothy Noah has a first set of responses here. The takeaway quote from Saez is, “the top 1% captured 93% of the income gains in the first year of recovery.” MORE...