Why is the dream fading?
“American dream is fading for middle class”
I took this headline from the October 7 Cedar Rapids Gazette. You can imagine what the article says — that many Americans’ faith in a brighter tomorrow has been eroded.
What is not mentioned in the article are simple numbers — 50 percent of all income in the country goes to the top 10 percent and nearly half that goes to the top 1 percent. There is just not much income left for the vast majority of us.
Statistics on income distribution come from two sources, the Census and the Internal Revenue Service (IRS). Data from both agencies say about the same thing. We are a very unequal country and it is getting worse.
The newest data I found comes from a University of California-Berkeley economist, Emmanuel Saez, and available on his website. IRS data shows that the top 10 percent, families with more than $114,000 per year in income took home 50.4 percent of all income in U.S. in 2012. This is the highest percentage ever recorded for this group in a data series going back to 1917.
The top 1 percent — families above $394,000 per year in income — took home 23.5 percent of all income. Their share was slightly higher in the late 1920s, but not much.
If you want more bad news for the middle class, Saez’ analysis shows that the top 1 percent of families captured just over two-thirds of the overall growth of real incomes per family over the period 1993-2012. The 99 percent shared the remaining third. So why is that American Dream fading?
Posted by David Osterberg, Founding DirectorExplore posts in the same categories: Budget and Tax, Economic Opportunity, Organization comment below, or link to this permanent URL from your own site.