According to researchers at the Economic Policy Institute (EPI), a Washington, D.C.-based liberal think tank, the top 1 percent of American families took home approximately 26.3 times as much income as the bottom 99 percent in 2015— a 4 percent increase from 2013.
The report titled “The New Gilded Age: Income inequality in the U.S. by state, metropolitan area, and county,” is authored by Estelle Sommeiller, socio-economist at the Institute for Research in Economic and Social Sciences in France and Mark Price, an economist at the Keystone Research Center in Harrisburg, Pennsylvania, who warned about the alarming trends in income inequality spreading across the country.
Researchers used the latest government data to analyze how the top 1 percent and the bottom 99 percent in each state have fared from 1970 to 2015 by county and metropolitan area. This analysis reveals vast and widespread growth in income inequality in “every corner of the country,” said the report.
Growth in incomes of the bottom 99 percent has slightly improved since the last report. However, the gap between the top 1 percent and bottom 99 percent in the majority of states is severely widening.
Shares of income growth accruing to the top 1 percent during economic expansions, U.S. and by region
“Rising inequality affects virtually every part of the country, not just large urban areas or financial centers,” said Sommeiller. “It’s a persistent problem throughout the country—in big cities and small towns, in all 50 states. While the economy continues to recover, policymakers should make it a top priority to grow the incomes of working people while reigning in corporate profits.”
Key findings of the report include:
- To be in the top 1 percent nationally in 2015, a family needed an income of $421,926. 13 states plus the District of Columbia, 107 metro areas, and 317 counties had local top 1 percent income thresholds above that level.
- The highest thresholds to be in the top 1 percent in states were in Connecticut ($700,800), District of Columbia ($598,155), New Jersey ($588,575), Massachusetts ($582,774), New York ($550,174), and California ($514,694).
- From 2009 to 2015, the incomes of the top 1 percent grew faster than the incomes of the bottom 99 percent in 43 states and the District of Columbia. The top 1 percent captured half or more of all income growth in nine states.
- Jackson, Wyo.-Idaho was the most unequal metro area, followed by Naples-Immokalee-Marco Island, Fla., and Key West, Fla. The most unequal counties were Teton County, Wyo., New York County, N.Y., and La Salle County, Texas.
- Overall in the U.S., the top 1 percent took home 22.03 percent of all income in 2015. That share was just 1.9 percentage points below the 1928 peak of 23.9 percent, which preceded the Great Depression.
“While the degree of income inequality differs across the country, the underlying forces are clear. It’s the result of intentional policy decisions to shift bargaining power away from working people and towards the top 1 percent,” said Price. “To reverse this, we should enact policies that boost workers’ ability to bargain for higher wages, rein in the salaries of CEOs and the financial sector, and implement a progressive tax system.”
While the rich are getting richer and the poor are getting poorer in the United States, President Donald Trump took to Twitter last month to brag about the economy. Calling it the “greatest” on record, which we ask: What economy (financial economy or real economy) was he referring to?
“In many ways this is the greatest economy in the HISTORY of America and the best time EVER to look for a job!” he tweeted in June. He then reiterated his tweet in the White House Rose Garden a few days later, when he said this is the “strongest economy we’ve ever had.”
In many ways this is the greatest economy in the HISTORY of America and the best time EVER to look for a job!
— Donald J. Trump (@realDonaldTrump) June 4, 2018
President Trump’s debt-fueled tax reform package [stealth QE for corporations] was supposed to raise wages and spur hiring for the bottom 90 percent has instead funded a record stock buyback and dividend spree, benefiting investors and company executives over the American worker. In other words, President Trump has allowed income inequality in the U.S. to widen further.
Trump tax reform has not resulted in higher wages for American workers, but has actually allowed real average hourly compensation to decline after the tax reform was passed:
According to Bloomberg, PayScale’s index of real wages indicates a dramatic deterioration into 2Q18:
While EPI warns that the overall income inequality trend is intact and getting worse, we remain troubled why the Trump administration continues to push economic propaganda of the “greatest economy” on record. At some point, the American people are going to awaken from their MAGA daze and realize that economic gains were only made by the top 1 percent, that is when the disappointment phase will be ushered in. However, there is new talk about Trump tax cut 2, as if, more of the same will work…