Exploring Income Inequality, Part 5: The Concentration of Income and Wealth
Yesterday’s post illustrated the magnitude of the income gap. Today, we’ll take a closer look at the distribution of income and wealth, focusing especially on the share accruing to the top 1 percent.
As the slideshow below shows, the share of the nation’s before-tax income going to the richest 1 percent of households has been rising since the late 1970s and in the past decade has climbed to levels last seen in the 1920s. Wealth is even more concentrated.
The slideshow is based on research from economists Thomas Piketty and Emmanuel Saez, who examine IRS data on the highest-income taxpayers, and from economist Edward Wolff, who analyzes trends in wealth using data from the Federal Reserve’s Survey of Consumer Finance. (See our guide for more information on these data sources and historical trends.)
While the recent recession caused a sharp drop in the share of income and wealth in the top 1 percent, the surge in corporate profits and the recovery of the stock market since 2009 suggest that incomes at the top will recover quickly in the coming years, as they did following the dot-com collapse of the early 2000s.
Thank you for tuning into the series; we’ll combine all of the slides into a single slideshow for easier viewing and post it on the CBPP website (cbpp.org). Stay tuned for future analyses.