Rich still richer as rest of incomes rise
Bottom 99 percent get pay raise, but not as much as top 1 percent
WASHINGTON – Solid job growth is finally boosting paychecks for the rest of us.
Incomes for the bottom 99 percent of American families rose 3.3 percent last year to $47,213, the biggest annual gain in the past 15 years, according to data compiled by economist Emmanuel Saez and released Monday by the Washington Center for Equitable Growth.
“For the bottom 99 percent of income earners, this marks the first year of real recovery from the income losses sparked by the Great Recession,” Saez, a professor at the University of California-Berkeley, said in a summary of his findings.
The increase likely reflects robust hiring last year when employers added 3.1 million jobs – the most since 1999. Strong job gains and a falling unemployment can help broadly raise incomes as businesses are forced to offer higher pay to attract workers.
Still, income inequality worsened in 2014. The richest 1 percent of Americans posted a much bigger increase in pay: their incomes soared an average of 10.8 percent to $1.3 million. The wealthiest 1 percent also captured 21.2 percent of all income in 2014, up from 20.1 percent the previous year. The top 10 percent of income earners also boosted their share in 2014, receiving 49.9 percent of total income, up from 48.9 percent in 2013.
Yet there was progress outside the richest 10 percent. Families in the bottom 90 percent of income-earners saw their incomes increase 2.8 percent, or about $900, to $33,068.
Most Americans still have a long way to go to recapture the sharp losses they suffered during the 2008-2009 recession. Average incomes for the bottom 99 percent plummeted 11.6 percent to $45,269 in those two years, Saez calculates. All figures are adjusted for inflation. They have so far recovered just 40 percent of their losses.