We have covered this topic in great detail in the past Say Goodbye To Income Equality, 46.5 Million Americans Live In Poverty. Blame The US Government or Guillotine Sales About To Surge. According to the WSJ report below…
The economist mined Labor Department data to show that the top 20% of earners accounted for more than 80% of the rise in household income from 2008-2012. Income fell for the bottom 20%.“While average income has returned to pre-recession levels, income gains have been distributed unevenly,” Mr. Cobet said.
And there lies the problem with the overall US Economy and the upcoming severe recession of 2014-2017. Those who study finance or financial markets know that there are no free lunches. Sooner or later you have to pay the piper for financial misdeeds and capital missallocation. No economy can grow over an extended period of time when only the top 20% of the population benefits…..thanks to misguided FED policies. While the top 20% are enjoying their rewards for the time being, the upcoming bear market of 2014-2017 will impact them the most (unless they go short at the right time).
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THE WSJ: Wealthiest Households Accounted for 80% of Rise in Incomes In Recession’s Aftermath
The rich got richer, the poor got poorer.
A recent article by Labor Department senior economist Aaron Cobet highlights the sharp disparity between the wealthiest and poorest Americans in the aftermath of the 2007-2009 recession.
“While average income has returned to pre-recession levels, income gains have been distributed unevenly,” Mr. Cobet said.
The economist mined Labor Department data to show that the top 20% of earners accounted for more than 80% of the rise in household income from 2008-2012. Income fell for the bottom 20%.
That had a direct impact on spending. The top households increased spending by about $2,300 from 2008-2012, notably on health care, transportation and education. The 20% of households with the lowest incomes cut spending by about $150.
“The decline in spending was due to lower expenditures on apparel—specifically women’s apparel,” Mr. Cobet said. Entertainment, housing, personal care, insurance, alcohol and reading also took a hit.
The International Monetary Fund has warned that rising income inequality is weighing on global growth. And President Barack Obama has made America’s income inequality a focal point of his second-term agenda.
Republicans have resisted one proposal to help workers with low incomes: raising the minimum wage. GOP lawmakers say such a step will lead to job losses and do little to spur growth.