Since the Great Recession officially ended in June 2009, the economy has slowly been recovering. But that recovery has been entirely confined to the top 10 percent of Americans. No one else has seen any income growth over the past three years.
That’s the main finding of new data released by the Federal Reserve Thursday. These statistics, which the Fed produces every three years, are one of the most extensive measures of inequality in the U.S.—and they further confirm the worrisome trend of rising income inequality. The data also include a number of other troubling findings. Wealth inequality, for instance, is even worse than income inequality. The top 10 percent of families own 75 percent of all wealth. At Demos, Matt Bruenig points out that white Americans own 90 percent of national wealth. In fact, the top 10 percent of white families own 65 percent of all wealth in America.
One chart in particular stands out. It shows the change in incomes for the bottom 50 percent of Americans, the next 40 percent and the top 10 percent in two different periods: 2007-2010 and 2010-2013. Given that 2007 was close to the peak of the business cycle and 2010 was near the trough, I expected that the 2007-2010 period would be much worse for all three income categories. I was wrong:
The bottom half of Americans have seen their average incomes decline more in the past three years than during the three-year period that preceded it. That’s remarkable. No wonder a recent Pew poll found that 24 percent of Americans believe the economy isn’t recovering. Sixty seven percent said the economy was recovering, but not strongly. Given this new data from the Fed, I’m surprised that there aren’t more people who believe the economy isn’t recovering. For the millions of Americans, it isn’t.