Are America’s Rich Getting Tired of Winning Yet?
The obituaries for Paul Volcker, the former Federal Reserve chair who died last Sunday at age 92, have been consistently echoing a truly heroic narrative. Between 1979 and 1987, as one prominent obit pronounced, Volcker’s bold and sweeping interest rate hikes shocked “the U.S. economy out of a cycle of inflation and malaise and so set the stage for a generation of prosperity.”
But prosperity for who?
Economist Gabriel Zucman has just delivered the most telling answer yet.
In a special analysis prepared for the Washington Post’s Greg Sargent, the University of California at Berkeley scholar has compared current average American incomes — in six different income ranges — to average incomes at the start of every decade since 1970.
Zucman’s income figures take into account both the taxes Americans pay federal and state governments and the transfers — everything from Social Security checks to veteran assistance — that go from government to individual Americans. In other words, his new breakdown shows what Americans had left in their wallets after paying their taxes and pocketing their benefits.
Some Americans, the new numbers show, had much more left than others. Phenomenally more. For America’s richest, the past half-century could hardly have been more prosperous.
In 1970, the nation’s top 1 percent averaged $328,816, in today’s dollars. By 2018, that top 1 percent average had more than tripled, to $1,152,232.
But the most striking after-tax, after-transfer gains have gone to Americans even higher up in the economic pecking order. Average top 0.1 percent incomes have more than quintupled since 1970, from just over $1 million to over $5 million. Average top 0.01 incomes have jumped over six-fold, from $3.7 million in 1970 to $24.2 million in 2018.
In essence, America’s very richest — the top one-hundredth of our top 1 percent — have on average added about $427,000 to their incomes every year since 1970.
The bottom 50 percent of Americans have added to their incomes, too — all of an average $167 a year.
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