US Inequality – top 0.1% closing in on bottom 90%
Inequality in wealth in the USA is approaching record levels. Research by Emmanuel Saez of the University of California, Berkeley, and Gabriel Zucman of the London School of Economics examined the share of total wealth held by the bottom 90% of families relative to those at the very top – 0.1%. Their research in wealth distribution reveals three trends:
1. Wealth inequality appears to have followed a U-shape evolution since 1913, with a marked increase since the 1980s. By their estimates, virtually all the increase in the top 10% and top 1% shares over the last three decades is due to the rise in the top 0.1% share, from 7% in the late 1970s to 22% in 2012.
2. The wealth share of the bottom 90% has followed an inverted-U evolution: from a low point of 15% in the late 1920s and at the beginning of the Great Depression, it steadily rose to 35% in the mid-1980s—thanks to rising pension and housing wealth—but then dropped to 23% in 2012 because of an increase in mortgage and other debts.
3. The increased concentration of wealth at the top seems driven by surging top incomes. The combination of increasing income inequality with increasing saving rate inequality is fueling wealth inequality
The Economist produced a very good interactive graphic on this entitled – Some are more equal than others – see the screenshot below. Useful for Unit 5 of the A2 course that looks at the Lorenz Curve.