More Evidence Shows Economic Rules are Rigged

From UFE's April 2008 E-News

The next time someone tells you they think our economy is fair, here’s new proof that it’s not.

New calculations of IRS data by Emmanuel Saez and Thomas Piketty show that over the past three decades income has skyrocketed by 240 percent for the wealthiest 1 percent, while for the bottom 90 percent it increased only 10 percent. In fact, just between 2005 and 2006, average income adjusted for inflation of the top 1 percent grew by $73,000 (or 7 percent), while the average income of the bottom 90 percent grew by just $20 (or 0.1 percent). (In 2006, the top 1 percent were those with incomes above $375,000, and the bottom 90 percent were those with incomes below $105,000.)

So, what does it tell us that incomes are growing faster for those at the top? Clearly the rules that govern income growth in our economy are rigged in favor of the already rich.

But it doesn’t have to be this way. The same data show that in the three decades after World War II, things were reversed: incomes for the top 1 percent grew only 25 percent, while for the bottom 90 percent they grew 92 percent.

Among the rules that changed between then and now are union-busting, trade liberalization, deregulation, and tilted tax policies. Time to change them back?

 

Read Sam Pizzigati’s take in the newsletter Too Much.

See the report from the Center on Budget and Policy Priorities on the data.

Find Emmanual Saez’ recent article here (PDF).

 

See the full E-News for April 2008

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