Abstract
According to many observers, incomes have stagnated for most Americans since the Great Recession, while the rich get richer. This claim, however, is based on analyses that cherry-pick start and end dates to assess income growth: the top 1 percent of households see sharper income declines during economic downturns than everyone else, and the Great Recession was especially destructive.
Key Findings
- An accurate accounting of who is gaining and losing in the U.S. economy requires a broad view across an entire business cycle: while the richest households tend to gain the most during economic expansions, this is partly because they also lose the most during recessions.
- In the current, ongoing, business cycle, real incomes declined between 2007 and 2014; the top 1 percent experienced nearly half of that total decline.
- From 1979 to 2007, 38 percent of income growth went to the bottom 90 percent of households, amounting to a 35 percent increase ($17,000) in its average income.
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