By the way, if you took the data from the census and measured wealth instead of income, you would get a far more extreme differences in inequality. This makes sense of course, since wealthier people have more money in the stock market.
You are correct that the rich lost a lot during the stock market crash in 2008, but it similarly recovers quickly as the market rallied. Again, this is a natural effect of wealthier people having more money in the stock market.
That may be, but income statistics like the one cited here don't require anything novel: The IRS publishes everything you'd need to know.
Try dividing the number of $10M+ earners by the total number of taxable returns. You'll get a number surprisingly close to .01%.
Here's the link to the paper if you want the details. http://elsa.berkeley.edu/~saez/
A lot of middle class people's portfolios lost a huge amount of their value and the overall tumult let to a lot of job loss. The economy still hasn't recovered to where it was then.
If Saez used wealth rather than income, I suspect this stat would end up much less impressive for just the reason you mentioned. He's essentially just capturing the effects of the market rally.
http://www.washingtonpost.com/business/economy/fed-americans...
"The Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were in 1992."
Explain? Curious to know; if you have a blog link or article to check out I'd appreciate it.
From December 1, 2007 to December 1, 2008, the value of the S&P 500 was cut in half. Somehow I suspect if you compared tax returns from 2007 and 2008, you'd see that high income taxpayers lost huge.[2] That's how it looks to me when I eyeball it. Look at taxpayers with more than $10,000,000 in income vs $50,000-$75,000, for example. The former dropped $160 billion in AGI, while the obviously much larger latter group dropped only $15 billion. That's the mirror image of the kind of data that allows Saez to claim that 90% of income gains in 2009-10 went to the top 1%.
[1] http://www.davemanuel.com/median-household-income.php
[2] http://www.irs.gov/pub/irs-soi/07in12ms.xls http://www.irs.gov/pub/irs-soi/08in12ms.xls
Agitprop, I've never heard that word before. Are you Russian or Eastern European?
Yes I have. Pinkos, why not say that then?
I just want to thank the author for separating the 1% form the 0.01% The 1% is the upper middle class, the actual "American Dream" fulfillers, and they are getting a lot of heat that was deftly deflected away from the 0.1% and upper echelons of aristocracy, because most reporters are too lazy to think about logarithms.
Errr... how much income do you think makes you 1%? Hint: it's $150k/yr. That's not "upper middle class". I understand that there are a lot of people here that might make that, close to it, or more because software is very lucrative, but don't let that skew your perception of the world.
http://www.irs.gov/uac/SOI-Tax-Stats---Individual-Statistica...
Shocking that income gains during a stock market rally (typically a leading economic indicator) go to the investor class while employment income (a lagging indicator) continues to struggle.
This is agitprop. Isn't there anyone other than Saez folks like the author can cite? Saez could have put out a "study" to show that the rich took a real bloodbath during '07-'08 while the middle class barely felt a prick for just the same reason. But he didn't: he'd rather be a hack and win unending favorable references in Times thumb suckers.