|
. . .
The new figures show that from 2003 to 2004, the latest year for which there is data, the richest Americans pulled far ahead of everyone else. In the space of that one year, real average income for the top 1 percent of households — those making more than $315,000 in 2004 — grew by nearly 17 percent. For the remaining 99 percent, the average gain was less than 3 percent, and that probably makes things look better than they really are, since other data(pdf), most notably from the Census Bureau, indicate that the average is bolstered by large gains among the top 20 percent of households. In all, the top 1 percent of households enjoyed 36 percent of all income gains in 2004, on top of an already stunning 30 percent in 2003.
Some of the gains at the top reflect capitalism’s robust reward for the founders of companies like Microsoft, Google and Dell. But most of it is due to the unprecedented largesse being heaped on executives and professionals, in the form of salary, bonuses and stock options. A recent study done for the Business Roundtable(pdf), a lobbying group for chief executives, shows that median executive pay at 350 large public companies was $6.8 million in 2005. According to the Wall Street Journal, that’s 179 times the pay of the average American worker. The study is intended to rebut much higher estimates made by other researchers, but it does little to quell the sense that executive pay is out of whack. The Journal's Alan Murray pointed out recently, the study’s calculation of executive pay is widely criticized as an understatement because, as a measurement of the median, it is largely unaffected by the eight or nine-digit pay packages that have dominated the headlines of late.
Rich people are also being made richer, recent government data shows, by strong returns on investment income. In 2003, the latest year for which figures are available, the top 1 percent of households owned 57.5 percent of corporate wealth, generally dividends and capital gains, up from 53.4 percent a year earlier.
The Center on Budget and Policy Priorities, a Washington think tank, compared the latest data from Mr. Piketty and Mr. Saez to comprehensive reports on income trends from the Congressional Budget Office. Every way it sliced the data, it found a striking share of total income concentrated at the top(pdf) of the income ladder as of 2004.
. . .
|