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Inequality - Incomes of richest 1% in the USA surge

Geoff Riley

22nd February 2023

Both during and after the pandemic, there has been a dramatic upsurge in the share of income going to the richest one per cent of people in the USA according to new data. The top 1% share now far exceeds its previous peak of 1928. Income derived from wealth - including dividends from shares and the realisation of capital gains - have been at the forefront of the sharp climb in the percentage of household income flowing to the top one per cent.

Profit margins of non-financial businesses in the US have reached historic highs during the pandemic. This has fuelled dividend payments to households who own shares.

"From 2019 (the year before the COVID crisis hit) to 2021 (the year the economy recovered from the crisis), real average incomes per family have grown by 13.1%.1 This very large growth hides substantial inequality as bottom 99% real incomes grew by only 4.1% from 2019 to 2021 while the top 1% grew by 46.6%."


Striking it Richer:The Evolution of Top Incomes in the United States

Oxfam International recently revealed that the richest one per cent have gained nearly twice as much wealth as the rest of the world combined over the past two years.

The Piketty-Saez series, also known as the World Wealth and Income Database, is a dataset created by economists Thomas Piketty and Emmanuel Saez. It tracks the distribution of income and wealth in various countries over time and has become a widely used tool for analyzing trends in inequality.

The Piketty-Saez series includes data on pre-tax and post-tax income, as well as wealth, for various income groups. The data is adjusted for inflation and is expressed in terms of real dollars, allowing for comparisons across time and between countries.

The dataset is based on a combination of tax records, national accounts, and survey data, and covers a wide range of countries, including the United States, France, Canada, and Australia, among others.

The Piketty-Saez series has been used by researchers and policymakers to study the causes and consequences of rising inequality, as well as to inform debates about tax policy and social welfare programs.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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