Sales of luxury goods are booming in America; after a brief surge by China, the U.S. has regained its title as the world's leading consumer of Moet champagne, Louis Vuitton handbags, and Hermes scarves. It's good to know that the top 1% are giving back to the world economy.
New figures from UC-Berkeley researchers about the economic effects of the Great Recession show just how much wealth and income was lost in those dark years. In one sense, the top 1% had it worse than anyone:
During the Great Recession, from 2007 to 2009, average real income per family declined dramatically by 17.4%, the largest two year drop since the Great Depression. Average real income for the top percentile fell even faster (36.3 percent decline), which lead to a decrease in the top percentile income share from 23.5 to 18.1 percent. Average real income for the bottom 99% also fell sharply by 11.6%, also by far the largest two year decline since the Great Depression.
But don't feel too bad for the top 1%. The primary reason their incomes fell so much during those years was the collapse of the stock market, and the subsequent loss in capital gains. Meaning that it had nothing to do with working a real job. And, more importantly, the next two years more than made up for it:
From 2009 to 2011, average real income per family grew modestly by
1.7% but the gains were very uneven. Top 1% incomes grew by 11.2% while bottom 99% incomes shrunk by 0.4%. Hence, the top 1% captured 121% of the income gains in the first two years of the recovery.
The top 1% got more than all of the income gains. That's what America is all about.
[Emmanuel Saez via Bloomberg]