Richest 1 percent earn biggest share since '20s

Top 10 percent take home a record 48.2 percent of total earnings in U.S.
Associated Press
Sep 11, 2013

The gulf between the richest 1 percent and the rest of America is the widest it's been since the Roaring '20s.

The very wealthiest Americans earned more than 19 percent of the country's household income last year — their biggest share since 1928, the year before the stock market crash. And the top 10 percent captured a record 48.2 percent of total earnings last year.

U.S. income inequality has been growing for almost three decades. And it grew again last year, according to an analysis of Internal Revenue Service figures dating to 1913 by economists at the University of California, Berkeley, the Paris School of Economics and Oxford University.

One of them, Berkeley's Emmanuel Saez, said the incomes of the richest Americans surged last year in part because they cashed in stock holdings to avoid higher capital gains taxes that took effect in January.

In 2012, the incomes of the top 1 percent rose nearly 20 percent compared with a 1 percent increase for the remaining 99 percent.

The richest Americans were hit hard by the financial crisis. Their incomes fell more than 36 percent in the Great Recession of 2007-09 as stock prices plummeted. Incomes for the bottom 99 percent fell just 11.6 percent, according to the analysis.

But since the recession officially ended in June 2009, the top 1 percent have enjoyed the benefits of rising corporate profits and stock prices: 95 percent of the income gains reported since 2009 have gone to the top 1 percent.

That compares with a 45 percent share for the top 1 percent in the economic expansion of the 1990s and a 65 percent share from the expansion that followed the 2001 recession.

The top 1 percent of American households had pretax income above $394,000 last year. The top 10 percent had income exceeding $114,000.

The income figures include wages, pension payments, dividends and capital gains from the sale of stocks and other assets. They do not include so-called transfer payments from government programs such as unemployment benefits and Social Security.

The gap between rich and poor narrowed after World War II as unions negotiated better pay and benefits and as the government enacted a minimum wage and other policies to help the poor and middle class.

The top 1 percent's share of income bottomed out at 7.7 percent in 1973 and has risen steadily since the early 1980s, according to the analysis.

Economists point to several reasons for widening income inequality. In some industries, U.S. workers now compete with low-wage labor in China and other developing countries. Clerical and call-center jobs have been outsourced to countries such as India and the Philippines.

Increasingly, technology is replacing workers in performing routine tasks. And union power has dwindled. The percentage of American workers represented by unions has dropped from 23.3 percent in 1983 to 12.5 percent last year, according to the Labor Department.

The changes have reduced costs for many employers. That is one reason corporate profits hit a record this year as a share of U.S. economic output, even though economic growth is sluggish and unemployment remains at a high 7.2 percent.

America's top earners tend to be highly paid executives or entrepreneurs — the "working rich" — instead of elites who enjoy lives of leisure on inherited wealth, Saez wrote in a report that accompanied the new analysis.

Still, he added: "We need to decide as a society whether this increase in income inequality is efficient and acceptable."




Re: "I never fell into the dollar cost averaging thing."

Studies have shown that one can often garner another 1% or more annualized return using the method.

Plus, the value of the assets can remain stable in a money mkt. during the process in the event of a severe mkt. correction.

Ya buy less when the price is high and more when the price is low.

IMO, physical gold assumes a "Mad Max" socio-economic event. I'm anticipating "only" a monetary collapse, i.e. an economic depression.


"The gap between rich and poor narrowed after World War II as unions negotiated better pay and benefits and as the government enacted a minimum wage and other policies"

Just a thought, if you consider automation, computers and outsourcing, the loss of basic assembly, secretarial and other jobs that most people could start into after high school are about gone in todays world. We as a world have created a very efficient process that requires less people to make it all work but at the same time the world population keeps on growing. And this is on topic because if you just happen to be invested or own a company that has increased it's bottom line through efficiency then your return will be better. If you were one to punch a clock in any wide variety of positions then you are now struggling to keep a good job.


The owners and investors put up money, time, knowledge, or some combination into a business. The worker who punches a clock doesn't. The owners and investors get their say so in what the business does and a share of the profits... if there is any. The worker who punches the clock gets a paycheck every week along with whatever benefits he is paid. The owners and investors have a vested interest in the company, the worker has a job.

AJ Oliver

It's really a myth that the ONE PERCENT worked hard and saved to get where they are. Nope, mostly it was inherited.
This is from S.M. Miller's "Born on Third Base"

"Half of those on the Forbes 400 list started their economic careers
by inheriting businesses or substantial wealth. Of these, most
inherited sufficient wealth to put them immediately into Forbes'
heaven. Only three out of ten on the Forbes list can be regarded as
self-starters whose parents did not have great wealth or own a
business with more than a few employees."



Classical Marxist class warfare claptrap.

Ever heard the saying: "Shirtsleeves to shirtsleeves in three generations"?

Ambition is gradually bred out of subsequent generations. Society eventually ends up with that wealth through profligate spending.

Unlike the kleptocrats, I don’t worry about what others have.

If you have an annual income of $40K you are in the richest 1% in the world!

Be careful what you wish for; ‘cause there’s little doubt that the world’s poor would like to redistribute the U.S.’ vast wealth to them.

IMO, one the major problems in the U.S. is that it's filled with economic and personal finance illiterates.

H*ll, most couldn’t even explain a rudimentary concept like compound interest.


"It's really a myth that the ONE PERCENT worked hard and saved to get where they are. Nope, mostly it was inherited."

So? My kids will inherit from me. I should have the ability to say where my assets go. It shouldn't be up to the gov't to tell me where and how to divde up my assets. The gov't should have little or no say in the matter.

It does keep estate lawyers in business, along with overseas banks trusts and such. You and the rest of the unwashed should have no say in how a rich person splits up his estate. You have no standing.

The Big Dog's back

You're nothing more than a pc. o' sh!tsky.


By what right does the gov't have a claim on my assets? My wife kids, grandkids, and whomever or whatever I want, does. Why do you feel you deserve what I have worked, saved and invested for nearly all of my life?

Bet piddle puppy can't and won't answer. At least in a logical answer, If he can't call someone names he is lost.


Another demonstration of the limits of Big Dog's articulation.


For every Paris Hilton, there's a Bill Gates, and someone born super rich who's now poor. In any event, if you don't let people pass the fruits of their productivity on to their own offspring, all you accomplish is to remove one of the strongest motivations to be productive.

People vary in ambition, talent, and other attributes. You can't maintain a classless society except by force.

Marxists' solution to poverty is to make it universal.


The de rigueur for my lineage is always walk independent. Most with much are usually miserable people. Having so much, but actually having nothing.


Re: " Most with much are usually miserable people. Having so much, but actually having nothing."

Speaking from experience... or out your a$$?



AJ Oliver

Hey some name-calling Mr. Contago!!
Too bad you do not have the courage or common decency to put your name on your posts. Typical right-wing cowardice.
And note how the same righties who rail against political correctness go all bananas when one uses terms or concepts that make them squirm - like class, and the ONE PERCENT.


Re: "Hey some name-calling"


Read it again.

I was referring to the "one percent" nonsensical rhetoric that you wrote as "Marxist claptrap."

But then again, if the shoe fits....

No "squirming," just disgusted with some people’s financial ignorance.


Yes, typical of people like Ben Franklin and James Madison.

You REALLY have a bug up your behind about peoples' names. Maybe it's because you are incapable of responding to WHAT they say, so you want to respond to WHO they are. That's sad - even Big Dog can manage to hurl insults without knowing who the other person is.

The Big Dog's back

Most of the 1% money is old money, made off the backs of slaves, women, children and now 3rd world countries. Savings my a$$.


Re: "Savings my a$$."

Yea, don't bother saving anything putz.

Just enjoy the crumbs that the political ruling class is gonna throw your way in your old age.


"made off the backs of slaves, women, children and now 3rd world countries. Savings my a$$."

Thank you for citing your sources on this fount of misinformation. Oh wait... you didn't and can't. But then that is the norm for your claims.


Live up to your name oldster...your hate is evident. Keep my government $$ coming! Thanks a lot! God how I love the military!


Thanks for your service. Too bad you haven't learned what saving your own earned money and investing it wisely can do for you over a lifetime. No one showed nor taught you when you were young. Too bad for you and most others much like you.

A rule of thumb is that with compound interest you double your principal every 7 to 10 years. With good management you can do better. You keep adding to it every week, month, year and the magic of compound interest will allow you to enjoy life without worries of the future. Living within your means, and regular saving lets you control your own future... instead of hoping and praying that the gov't will take care of you. It is the independent way of living your life. But when you follow the crowd and hope and pray the gov't will take care of you... you become a follower and a serf to the gov't elites.

Sorry I don't bother to hate those who expect others (gov't) to take care of them, Pity would be closer to what I feel for them Contempt for the advocates who demand something for just existing, but there aren't many of those around... yet.


Geez grump, how about - Pay as you go. Don't live paycheck to paycheck. Don't spend more than you make. Save for a rainy day. Buy stocks you believe in. (btw my acreage is paid for too/farm land) Enjoy life, it isn't about keeping up with the Joneses either. Life is too short & each day should be savored. Try sitting on a porch with friends over coffee...its that E-Z.


"Geez grump, how about - Pay as you go. Don't live paycheck to paycheck. Don't spend more than you make. Save for a rainy day. Buy stocks you believe in. (btw my acreage is paid for too/farm land) Enjoy life, it isn't about keeping up with the Joneses either."

In what way is that different than what I have said in this thread?

As far as the Joneses go, most people that earned and saved their money don't advertise that they have it unless they lived in gated communities. It would only invite unwanted attention from those you don't want to be visited by. If I had to use my name, I would not be posting.

The New World Czar

Is there anything really wrong with being in the "top 1%" or "top 10%" anyway?


I read an interesting article about these people. When Obozo was elected and began his socialism push a lot of well to do people went incognito in fear of being harassed. Many reduced their trips and fancy autos and began spending more in their own homes or like said gated communities. I could look for it but no time, it was an interesting read.


RE: "Many reduced their trips and fancy autos,"

The dumbed down socialists tend to forget what happened when the dopey Dems passed their ill famous Luxury Tax.

Hundreds of businesses closed and thousands of working Americans lost their jobs.


Concerning the 1% income, there are lots of variables at play. Many CEO's have moderate to high base pay, and then they also have bonus pay & stock options, hence the term 'total compensation package'. For some, and I don't know what the percentages are, but for some their bonus + stock potential/targets can be far greater than their base pay, and that's why CEO's in general focus on maximizing shareholder value because doing so, in turn, puts more $$ in their CEO pockets. But that's the way Capitalism should work. The people at the top of the company food chain are expected to make the decisions that increase the bottom line, both short and long term. If they don't perform, the Board replaces them, but many (most?), as we know, negotiate "golden parachutes" when they're hired on, thus helping them ease into their next big CEO gig or retirement. Of course the CEO's need the rest of the company to perform, and also of course depending upon where an employee is in relation to the top dictates an employees total compensation package. One of my employer's clear directives is this: each of us is responsible for our own employability. If I don't believe I'm being fairly compensated, it's my choice what I do about it: I can stay where I'm at and keep toiling away, I can apply to other companies, I can go to school to earn a Bachelor's Degree in another discipline or a Master's Degree in my current discipline, in certain professions such as Financial Services I can go to school to get additional Licenses, or maybe I leave my current field and become an electrician or plumber apprentice as my friends in those trades for years have had the problem of simply not being able to keep up with the demand. But again, it's all my choice. And it's also important to remember we are long past the late 50's and 60's when getting an hourly job at the local Big 3 automaker plant translated into a pretty-much guaranteed excellent job for life + company-sponsored pension. So again, it's up to me to understand I control my own employability. CEO's understand this and that's why they continue to draw the compensation that they do. And to be clear, I don't begrudge or envy them. I've been in meetings with CEO's and Corporate/Executive/Senior VP's. I've seen the folks at the top of the company chain age a lot faster then when they were in lower positions. Not all lead a country club life, and those increased airplane travel trips to all parts of the globe take their toll, not to mention their family unit suffers. The top 1% may definitely have better creature comforts, don't have to worry about where their next meal will come from, don't have to worry about a place to live, but they are indeed paying both physically and mentally for the compensation they receive.

No . . . I do not begrudge or envy them.


"Coasterfan", among other here,is absolutely correct. To anyone who is either too blind or, unfortunately, ignorant, to the simple facts I say, "May the Force help you". To fall prey to rhetoric of, "Guns, God and country" is to dig your own financial grave. N E V E R before has the G.O.P. strayed so far from their principles. N E V E R before has the G.O.P. fallen to the influence of money, power and greed. N E V E R before has our country been pushed to the brink of economic and social collapse as has been brought to us by the G.O.P. I say this as once proud and staunch Republican.
Voting Americans need to wake up and stop listening to the propaganda that causes division, chaos and confusion and merely T H I N K. 90% of we Americans have been negatively impacted in one way or another by this diabolical plan. We have lost jobs, health care, dignity, economic opportunity and most importantly....our sanity to their ploy of, "Feed them lies often enough and we will own them".
Anyone and everyone who has felt the sting of those items I wrote about above...need to ONLY boil the problem down to its most basic common denominator and there you WILL find the answer. The CORRECT answer. Then and only then can you make a sound decision.

Economic Euthanasia is alive and well and graciously being provided by the top.................



Re: "'Coasterfan', among other here,is absolutely correct."

Your's and Teach's writings read like socialistic screeds chocked full of partisan rhetoric with little to no basis in fact.

I'll ask you some of the same questions that I've often asked coasterfan (and which he's NEVER answered):

Do you have any invested retirement assets? If so, you are part of the problem as you perceive it to be.

Where the h*ll do you think that the wealthy place their assets? Under a bed in a shoe box or on a home closet shelf?

And lastly, if hedge funds & private equity are so damn greedy and evil, then WHY IS IT that public employee pension plans invest hundreds of billions of dollars with them? HUM?

Shamefully, the level of financial ignorance in the U.S. is pathetic.


Whats funny is there will always be someone at the matter what you tax them or take away from them. You people might as well accept it. Just like sports, there is someone always at the top of their game/better than others. So we should punish them?

Its all about the scale. Richer people can invest more and make more than the avg. middle class person. Why is that so wrong?

If you have a retirement account or have money deducted out of your paycheck that goes into a 401K...etc, don't bother responding....because you are doing the exact thing these so called 1% are doing. They are just on a larger scale.

Strip every 1% of everything they have and you still will have a 1% class. Just accept it, work hard, pay your bills, save what you can and enjoy life. Don't be envious of others.