Market Share of Income - 3/26/14
A recently released International Monetary Fund paper indicates that "In the United States, the share of market income captured by the richest 10 percent surged from around 30 percent in 1980 to 48 percent by 2012." The paper also points out that the income share of the richest 1 percent increased from 8 percent to 19 percent over that period, but that even more striking was the fact that the income share of the richest 0.1 percent went from 2.6 percent to 10.4 percent.
An article authored by Charles Blow highlights the findings a study published last year in the Journal of Economic Perspectives, which found that the share of income going to the top 1 percent in America is higher than in other developed countries. At the same time, the situation for the poor has deteriorated and most frustratingly has become stubbornly resistant to improvement. The US poverty remains stuck at 15 percent – among children it is 22 percent.
From an economic standpoint, everyone should be concerned and not merely from altruistic perspectives. The International Monetary Fund points out that “There is growing evidence that high income inequality can be detrimental to achieving macroeconomic stability and growth."