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The Economic Recovery Is Staggeringly Tilted Towards the Rich

Getty Images/Chris Jackson

Good news! The average annual income level has surpassed its 2008 peak, not accounting for inflation.

BLS
Source: Bureau of Labor Statistics

Bad news! That rebound has come almost entirely for high-income households.

High vs low income income changes
Source: Bureau of Labor Statistics

The Bureau of Labor Statistics released new graphs on household income levels and spending in the aftermath of the Great Recession. Unsurprisingly, the top 20 percent of earners saw the greatest boost: their 2012 incomes were $8,000 greater than their 2008 incomes. But for the lowest quintile, their incomes are still below their 2008 level.

As for expenditures—what households actually spend their money on—the rich lead the way there as well, but the gap between them and middle- and low-income households is much smaller:

Expenditures high vs low income
Source: Bureau of Labor Statistics

What are the rich spending their additional income on? Mostly health care, transportation and education while they’re consuming a lot less in housing. As for low-income households, they’ve cut back on apparel and entertainment while spending more on “cash contributions,” which include giving money to people outside the household or organizations (such as to a charity):

High vs low income expenditure changes
Source: Bureau of Labor Statistics

Check out the full slideshow at BLS’s site.