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The New Gilded Age

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The latest Economic Policy Institute report on the New Gilded Age is out and it is a go-to resource on income inequality. From the executive summary:

In 2015, the top 1 percent of families in the U.S. earned, on average, 26.3 times as much income as the bottom 99 percent—an increase from 2013, when they earned 25.3 times as much.

Eight states plus the District of Columbia had gaps wider than the national gap. In the most unequal—New York, Florida, and Connecticut—the top 1 percent earned average incomes more than 35 times those of the bottom 99 percent.

Forty-five of 916 metropolitan areas had gaps wider than the national gap. In the 17 most unequal metropolitan areas, the average income of the top 1 percent was at least 35 times greater than the average income of the bottom 99 percent. Most unequal was the Jackson metropolitan area, which spans Wyoming and Idaho; there the top 1 percent in 2015 earned on average 132.0 times the average income of the bottom 99 percent of families. The next 16 metropolitan areas with the largest top-to-bottom ratios were Naples-Immokalee-Marco Island, Florida (90.1); Key West, Florida (81.3); Sebastian-Vero Beach, Florida (67.2); Bridgeport-Stamford-Norwalk, Connecticut (62.2); Miami-Fort Lauderdale-West Palm Beach, Florida (55.4); Port St. Lucie, Florida (45.5); Glenwood Springs, Colorado (45.0); Hailey, Idaho (44.9); Gardnerville Ranchos, Nevada (44.3); Summit Park, Utah (43.5); North Port-Sarasota-Bradenton, Florida (43.1); New York-Newark-Jersey City, New York-New Jersey-Pennsylvania (39.4); Cape Coral-Fort Myers, Florida (38.8); Fayetteville-Springdale-Rogers, Arkansas-Missouri (37.2); Midland, Texas (35.7); and Steamboat Springs, Colorado (35.3).

Of 3,061 counties, 139 had gaps wider than the national gap. The average income of the top 1 percent was at least 35 times greater than the average income of the bottom 99 percent in 50 counties. In Teton County, Wyoming (which is one of two counties in the Jackson metropolitan area), the top 1 percent in 2015 earned on average 142.2 times the average income of the bottom 99 percent of families.

There is a wide spread in what it means to be in the top 1 percent by state, metro area, and county.

To be in the top 1 percent nationally in 2015, a family needed an income of $421,926. Thirteen states plus the District of Columbia, 107 metro areas, and 317 counties had local top 1 percent income thresholds above that level.

For states (including the District of Columbia), the highest thresholds 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).

Thresholds above $1 million could be found in five metro areas (Jackson, Wyoming-Idaho; Bridgeport-Stamford-Norwalk, Connecticut; Summit Park, Utah; San Jose-Sunnyvale-Santa Clara, California; Naples-Immokalee-Marco Island, Florida) and 17 counties.

Looking at the residence of families with incomes above the 2015 national threshold of $421,926 for entering the top 1 percent, we find:

Of all the income received by the national top 1 percent in 2015, half accrued to families in five states: California, New York, Texas, Florida, and Illinois. These five states accounted for about 40 percent of all income in the U.S. (the sum of all incomes including the bottom 99 percent and top 1 percent).

We find the largest concentrations of national top 1 percent income in New York, Connecticut, Florida, Massachusetts, District of Columbia, California, New Jersey, Nevada, Wyoming, and Illinois.

We find the largest concentrations (relative to each metropolitan area’s share of all income) of national top 1 percent income in the following 10 metropolitan areas: Jackson, Wyoming-Idaho; Naples-Immokalee-Marco Island, Florida; Bridgeport-Stamford-Norwalk, Connecticut; Key West, Florida; Summit Park, Utah; Sebastian-Vero Beach, Florida; San Jose-Sunnyvale-Santa Clara, California; Miami-Fort Lauderdale-West Palm Beach, Florida; Hailey, Idaho; and San Francisco-Oakland-Hayward, California.

At the county level, we find the largest concentrations (relative to each county’s share of all income) of national top 1 percent income in Teton County, Wyoming; New York County, New York; Collier County, Florida; Pitkin County, Colorado; Fairfield County, Connecticut; Monroe County, Florida; Westchester County, New York; Palm Beach County, Florida; Marin County, California; San Mateo County, California.

Examining the growth of income over the past century, we find growth was broadly shared from 1945 to 1973 and highly unequal from 1973 to 2007, with the latter pattern persisting in the recovery from the Great Recession since 2009:

Faster income growth for the bottom 99 percent of families between 1945 and 1973 meant that the top 1 percent captured just 4.9 percent of all income growth over that period.

The pattern in the distribution of income growth reversed itself from 1973 to 2007, with over half (58.7 percent) of all income growth concentrated in the hands of the top 1 percent of families.

So far during the recovery from the Great Recession, the top 1 percent of families have captured 41.8 percent of all income growth. The distribution of income growth has improved since our last report, when we found that the top 1 percent had captured 85.1 percent of income growth between 2009 and 2013.

From our 2016 report to this one, cumulative income growth during the recovery for the top 1 percent increased from 17.4 percent (looking at changes from 2009 to 2013) to 33.9 percent (2009 to 2015)—almost doubling. Among the bottom 99 percent, cumulative growth increased from 0.7 percent to 10.3 percent—growing to nearly 15 times what it was. The bigger relative improvement in growth for the bottom 99 percent (reflecting a strengthening economy) is why the top 1 percent captured a smaller share of income growth from 2009 to 2015 than from 2009 to 2013. Nevertheless, the average income of the top 1 percent still grew faster than the average income of the bottom 99 percent, thus the top-to-bottom ratio continued to increase.

There’s a lot more information as well. It’s definitely worth your time.

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