US income inequality worsened in 2014: Study
Income inequality in the United States worsened in 2014, as the wealthiest Americans posted big pay increases while the incomes of the bottom 99 percent of US families remained nearly stagnant, according to a new study.
The incomes of the richest 1 percent of Americans soared to an average of 10.8 percent to $1.3 million last year, according to data compiled by economist Emmanuel Saez, a professor at the University of California in Berkeley.
The wealthiest 1 percent also captured 21.2 percent of all income in 2014, up from 20.1 percent the previous year, said the report, which was released by the Washington Center for Equitable Growth.
The top 10 percent of income earners also increased their share of the country’s wealth last year, receiving 49.9 percent of total income, up from 48.9 percent in 2013.
Meanwhile, the incomes for the bottom 99 percent of American families rose just 3.3 percent last year to $47,213.
Saez warned that the inequality trend is not likely to slow down.
“Based on the US historical record, falls in income concentration due to economic downturns are temporary unless drastic regulation and tax policy changes are implemented and prevent income concentration from bouncing back,” he said.
“Such policy changes took place after the Great Depression during the New Deal and permanently reduced income concentration until the 1970s,” he added.
Most Americans still have a long way to go to recapture the huge income losses they suffered during the 2008-2009 Great Recession.
Saez calculated that the average incomes for the bottom 99 percent dropped 11.6 percent to $45,269 in those two years.
The report comes at a time when income inequality is of increasing concern in the United States.
The most senior corporate officers in the United States made over 300 times as much as the average worker last year, according to a report released last month.
US chief executive officers (CEO) earned 303 times more than a "typical" worker in 2014, according to the Economic Policy Institute, a left-leaning think tank based in Washington, DC.
AHT/HRJ
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