“The latest SSA data demonstrates how vastly unequal earnings growth has been between 1979 and 2022. Over that period, inflation-adjusted annual earnings for the top 1% and top 0.1% skyrocketed by 171.7% and 344.4%, respectively, while earnings for the bottom 90% grew just 32.9%. This unequal growth has seen a rising share of total earnings in the US economy accumulate at the top of the wage ladder.
“The share of earnings for the bottom 90% fell 9.7 percentage points between 1979 and 2022, while the share of earnings for the top 5% grew 8.8 percentage points. The very top — the top 0.1% of wage earners — nearly tripled its share of total earnings from 1.6% in 1979 to 4.6% in 2022…
“All of this straightforward data on earnings clearly shows a huge rise in inequality of pay in the US economy. Moreover, labor income is far more equally distributed among US households than income derived from wealth (for example, the top 10% of US households holds about 85% of all corporate stock — including indirect ownership through 401(k)s and other retirement vehicles). Hence, if labor income is becoming so much more unequal, are we really to believe that ownership of corporate equities or other financial assets has become radically more equal to make up for this? No data suggests this is true.”
A RESPONSE TO AUTEN AND SPLINTER’S DENIAL OF US INEQUALITY – WID
“Thomas Piketty, Emmanuel Saez and Gabriel Zucman respond to Auten and Splinter’s paper published in the Journal of Political Economy in November 2023, which denies the extent of rising inequality in the United States since 1960. Auten and Splinter’s 2023 paper reproduces methodological errors already made in earlier drafts, which were already debunked in 2019.
“In this new note, the co-directors of the World Inequality Lab (WIL) show that Auten and Splinter incorrectly allocate a large and growing amount of untaxed business and capital income to the bottom of the distribution.“