Cass R. Sunstein at Bloomberg:
From 2009 to 2012, the U.S. experienced a significant economic recovery, in which average real income growth jumped by 6 percent. That’s the good news. The bad news is that almost all of that increase — 95 percent – – was enjoyed by those in the top 1 percent of the income distribution.
To appreciate this remarkable finding, set out in an important paper by University of California economist Emmanuel Saez, we need to add some context. From 2007 to 2009, the recession produced a 17.4 percent decline in average real income — the largest drop since the Great Depression. Every income class was hit hard, but in percentage terms, those at the top of the economic ladder suffered the biggest decreases.
During the recovery — from 2009 to 2012 — members of the top 1 percent have enjoyed a big boost in their average income: 31.4 percent. As Saez shows, this figure almost wiped out the loss from the recession, returning the top 1 percent to essentially where it was in 2007.
By contrast, the remaining 99 percent saw measly growth of 0.4 percent, about a 30th of the 11.6 percent loss they experienced in the recession. By the end of 2012, the bottom 99 percent wasn’t close to where it was in 2007.