Mike Konczal has a post about the updated Piketty-Saez data on the distribution of income in the United States. According to the Piketty-Saez estimates, the top 1% of income-earners captured 93% of income gains in 2010. In more simple terms, 93% of the extra income generated by economic growth in 2010 went to the top 1% of the population.
This comes on the tail of four decades in which the top 10% of the population has captured basically all of the income gains in the United States economy. In that same time period, the GDP per capita more than doubled. People should take away two things from this this new data and all the data preceding it: 1) economic growth and expanded productivity do not necessarily improve the lives of anyone but the super-rich, and 2) the country’s purported need for belt-tightening — especially in entitlement spending — comes not from economic problems, but from distribution problems.
Those on the right constantly trumpet economic growth as the panacea for all economic problems. A rising tide floats all boats they say. But it isn’t so. If the top 10% — and especially the top 1% — continue to capture basically all of the gains from economic growth, why on earth should anyone else care about pro-growth policies? Unless pro-growth policies are accompanied by pro-egalitarian policies that ensure that the increased prosperity of growth is widely shared, I am not interested in pro-growth policies and no one else should be either.
As we slowly climb ourselves out of the recession, it is time once again to reflect on the fact that the country continues to make more and more stuff while demanding that the poor, the sick, and the elderly get less and less of it. The United States economy consistently increases its per-capita GDP, distributes almost all of the gains from that increase to the very rich, and then tells everyone else that they must sacrifice due to the tough times. Speaking in terms of total economic production, these are not tough times. Vastly unequal income and wealth distribution have caused many to experience these times as tough, but that is a consequence of mal-distribution, not economic decline.