Only the richest get richer in this recovery

New research shows most families got dinged financially from 2009 to 2011, with one notable exception: The top 1%.

By Aimee Picchi Feb 13, 2013 3:02PM

Businessman with cigar --Juice Images , SuperStock The economy is still recovering from the recession, and it's come a long way since 2008, when the housing market was dire and the stock market took a nosedive. 


But new economic research indicates that the recovery hasn't benefited the average American family -- unless your family is part of the country's new elite. Only the top 1% saw average real income growth between 2009 to 2011, according to a Berkeley economist. (By the way, to break into to the top 1%, you'll need an annual income of at least $366,623, according to the World Top Incomes Database.) 


For the rest of us in the 99% bracket, family incomes slipped by 0.4% from 2009 to 2011, according to Emmanuel Saez, the University of California, Berkeley, economist whose earlier research documented a three-decade run-up in income for America's top 1%.


The recovery is treating the top 1% much better, however. That group saw incomes gain 11.2% during the first two years of the recovery, according to Saez, who was named a MacArthur Fellow in 2010 for his research into income and tax policy. 


But doesn't a rising tide lift all boats? Saez says it's not happening in this recovery. "In 2012, top 1% income will likely surge, due to booming stock prices, as well as re-timing of income to avoid the higher 2013 top tax rates," he wrote in the January report. "Bottom 99% will likely grow much more modestly than top 1% incomes from 2011 to 2012."


Astoundingly, Saez writes that his new research shows that the top 1% grabbed 121% of the income gains in the first two years of the recovery. How does that work? In essence, it means that the gains of the top 1% came at the expense of the remaining 99%.


The research may give a boost to President Obama's proposals outlined in his State of the Union speech on Tuesday. Taking a progressive stance, his address included ideas such as raising the minimum wage to $9 an hour. 


That might not be enough to appease Saez, who last year told The New York Times he advocates much higher top marginal tax rates on the rich -- up to as much as 90%.


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Tags: Economy
44Comments
Feb 14, 2013 12:21AM
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When the richest Americans pull their resources and pay for the elected officials campaigns who gets the favors?  When 'our' supreme court decided Corporations were people, whose been getting the favors?  The American middle class is disappearing because the richest Americans are taking what the middle class earned. The richest Americans, i.e., corporations and heavy investors like Mitt Romney who hide their money in overseas accounts to keep from paying taxes are in fact running the show on capital hill. "Our" representatives are members of this elite group of millionaires or very desperately trying to join them.  I work everyday.  I'm so called middle class, I earn 80,000 a year but  I am a dying breed in America.  My son works for less than half what I make when he is lucky enough to find some work.  My benefits have gone south for years.  I've lost vacation time. Retirement money. I've had to pay more and more for my health coverage out of my pocket and lost coverage.  The playing field is tilted to the rich.  The banks are borrowing the peoples money for 0 percent interest from the federal reserve.  They loan the same money at 2 to over 20 percent interest then pay themselves bonuses for making a profit.  America and its people need to stop the bleeding.  America and its great middle class need to rise up and take back our country.

 

 

 

 

 

 

 

 

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Feb 13, 2013 6:58PM
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The rich get richer, while at the same time they are always crying that they need even more.

Feb 13, 2013 8:20PM
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Anybody that can spell economics knows the demise of the middle class is without a doubt due to free trade and outsourcing.  The elected officials haven't the least interest in talking about it.  They aren't stupid about what is going on. And last night SOTU who was sitting next to the first lady? The CEO of the king of outsourcing.  The company that has amassed $138 billion in cash from the luxury of outsourcing wages, benefits, and worker regulations.  And Obama preaches about the minimum wage and American manufactruing. The new negotiations referred to as a Territorial Tax should come as no surprise.  The Obama administration is negotiating to end taxing overseas profits such that these Internationals can keep their money freely in the Cayman islands.  The exact vehicle used to demonize Romney. I am beginning to think Obama is another Peron or Marcos.  He and his buddies are ripping the American Citizen silly and the masses keep cheering him on.
Feb 13, 2013 5:23PM
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Long term capital gains above a certain income level need to be treated like regular income. Otherwise, wealth consolidation at the top will only accelerate.
Feb 13, 2013 6:03PM
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"New Research"?  It's been well established that the incomes of the top 1% have and are continuing to rise well above the rate of inflation while the Middle Class lags.  Yet we have Middle Class fools who fall for the "redistribution" screams of the far-right as if the money is being diverted down!
Feb 14, 2013 7:54AM
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And where are all the jobs they were to create with all their tax cuts for over a decade???? LMFAO at the USA for being so stupid to believe that the rich create jobs... Consumers do idiots ...
Feb 13, 2013 6:43PM
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Didn't anyone EXPECT the Rich to get richer during the Recovery..??

 

Historically it just about happens every sequence..

Feb 13, 2013 6:44PM
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When I went to school they didn`t teach anything in high school or college about the stock

market.I`ve made a to the last 15 years.Jobs will come and go, but the market is great

if you know the ropes.You don`t get rich working for someone else.At least not for a while.

The market is like winning at the horse races, if you`re smart.

Feb 13, 2013 8:51PM
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no big suprise here....But I see very little the Prezzz can do, heck is the 1% as well.

Geezzeee...look at his net worth before office, then after office....duhhhhhhhhhhhhhh

 

Feb 14, 2013 7:23PM
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In the 1980s, the executives' compensation were 40 times that of the median salary in the states. Now, it's hundreds times that of the median salary. The 1% is giving themselves all the monies while keeping the 99% salaries to zero increase or even cutting them back or outsource the jobs to elsewhere. All the savings a corporation gets goes into the pockets of the few high executives! There should be a legislation that limits an exec compensation to say 50 times that of the median income of his/her company on top of the minimum wage law. There won't be such a disparity and more people would be successful and make more money which would help the economy and create jobs.

We should not be blaming corporations since companies are made up of many workers but a few overpaid execs that gets all the dough, even if they're wrong. Those execs are the ones getting all the benefits and golden parachutes. It is those execs that drive the companies and commanding the workers.

Feb 15, 2013 2:10AM
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i bet my left one that the rich will never tell you laughingly how they can deduct their million dollar yachts and resort properties or their one day $400,000 stadium boxes at the superbowl or their corporate jets as a legitimate business expenses when the poor are barely able to keep their family lands that are being taken by very high estate taxes upon death....i did a lot of work for the yacht crowd in florida several years ago and i would overhear the chuckles about their lawyers and accountants picking apart tax codes to give them more tax write-offs...kinda made me aspire to get rich so i could get the corporate benefits but i found that to get rich you actually need to be rich or have friends in the right places to get you in the door...good luck finding those buddies to open the club doors as i haven't had much luck so far
Feb 15, 2013 1:45AM
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hmmmm....im forced to ask myself are the rich that much smarter than me or do they just hire better politicians than i can't afford...i own a small business that is directly linked to consumer spending on the lower end as i compete for the few people who can afford to update their refrigeration systems in the smaller grocery businesses  that are folding one after the other from unfair competition from the likes of walmart....our local walmart closed their store to build a larger one 1/4 mile away and crippled the other businesses left behind and forced the city to give a long term tax abatement or they would move a few miles further down the road and the city would loose its millions of dollars in city sales taxes it had grown to enjoy...one of my larger stores that's privately owned and is having to raise its prices because the city has raised property taxes to increase revenue is barely holding on and the owner who has been fighting walmart for 15 years is finally thinking bout calling it quits after 48 years of paying all taxes due....he has prob 40 employees and most are starting to fear for their jobs as very few grocery stores are still operating in our area and have few other job skills...his property tax bill rose to $32,000 for a store whose sales might be 5% of walmart's...my guess is that the new wally world shopping center property value would be at least 15 times that of my customers store which means they can keep prices lower and unfairly keeping their prices down....fair????????????you be the judge!
Feb 13, 2013 9:04PM
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Obama is so predictable,  his "simple minded" solutions  actually have a reverse effect from what he's telling people - and he is too short sighted to even see it.   Look, make the mortgage market available to the middle class and the real estate will be bought up in no time.  Voila, new construction occurs and we have good paying manufacturing jobs all over America. Unemployment solved and a middle class recovery.  Instead the **** comes up with all his proposals that everyone can see have only one concept involved -  REDISTRIBUTION HANDOUTS.  His simple mind can't comprehend any other approach.
Feb 13, 2013 8:55PM
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It seems so fundamentally basic that I can't believe the amount of misunderstanding out there - except that it is self-evident as demonstrated  by the foolish masses who  re-elected Obama.  This administration's policies guarantee the rich will get richer and guarantee the middle class will struggle to stay middle class; yet, they still voted him back in.  His  ideas are so unsophisticated that  he is is clearly an inexperienced, underqualified " Simpleton."  Anyone with half a brain and some money saved is making a killing.   1)  the fed will keep the stock market primed so invest some money there.  The fed won't let  you lose for very long.  2)  DoddFrank is locking most everyone out of the loan market at a time we have record low r.e. prices and record low interest rates.  So the rich are buying up the r.e. and understand that the "present" risks associated with leverage is minimal.   The rewards far outweigh the risks involved.  Yet the teachers, grocery clerks, etc that should be buying at these prices are locked out by Obama's protectionism policies.  Obama has squandered a once in a lifetime opportunity for this class of people.  you don't have to analyze too deeply to figure out that most of his ideas have an inverse affect - quite similar to his gun control proposals which have backfired making him the number one firearms and ammo salesman ever - resulting in more guns on the street, not less.
Feb 18, 2013 4:28PM
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Any financial paper could go down with the kill the dollar policy in DC. Have money in hard assets. We are now in a bond bubble. The policy tools are nearly exhausted. This whole thing could end badly.

Feb 18, 2013 3:47PM
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Monopoly is a word the Government doesn't use anymore. Their too busy playing kiss **** to butt heads like Mr. Buffett (the king all greed).  Mr. Buffett thinks it's pretty cool when you have the President wiping your **** for you.  I feel a lot poorer every time his sorry **** buys another company and then he doesn't do anything but sit back and take more money from my pockets.  Greatest pickpocket in the world Warren Buffett stinking fifthly rich.   Everything he supposedly gives to charity comes from him sucking the life out of the middle class.  The US and rich guys like Buffett even do business with the worlds richest most corrupt drug lord in the world.  Who rules all of Mexico with a monopoly all his own and has now moved into the US dairy business.  So long Blue Bunny others will follow thanks to our Buy-me for a price politicians.  Spineless self-servers that's all of Congress.   A Spring Revolution is soon to come.  We only need a leader! 
Feb 14, 2013 10:49AM
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We are still working on cleaning up the great recession disaster that those 2 imbeciles Bush and Cheney created, and the rest of the Republican idiots approved of and raved about.

 

There is no cure for Republican stupidity!

Feb 13, 2013 6:08PM
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Now that they have it, what will they do with it? Beginning tomorrow... let's start cheering them on to begin deploying it building our New America and the New World Order they so dearly and greedily want. Every single one of us should drop everything and rally around these amazing people who will show us what they are all about... incredible ideas honed immediately into reality, speed none of us could ever match and wisdom... myyyyyy GOD, we WILL see wisdom! ALL HAIL THE RICH AND THEIR OFFSPRING, WE ALL WISH TO KNOW YOU INTIMATELY. WE DEMAND IT. Why? Because we have every intent of keeping our friends close and our enemies closer. Sniff... do you smell BBQ, or ARE you BBQ? Absolute Power Corrupts Absolutely. If they were TRULY smart, they wouldn't have taken ALL of it and stick out like the cancer they are.
Feb 13, 2013 11:38PM
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Obama and his rich cronies love it.

 

Over-population, immigration drives wages down.  

 

Obama plays more golf, on more expensive courses than any other government employee in D.C.

Feb 13, 2013 8:23PM
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If your net worth did not go up last year don't blame anyone but yourself. Next sit down and talk to some to figure out what you did wrong.
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