The Triumph of the 9 Percent

Larry Mishel and Nicholas Finio have a fascinating little study out on the distrubutional consequences of the Great Recession and the recovery that they’ve given the somewhat curious name “Earnings of the top 1.0 percent rebound strongly in the recovery.”

That’s true. But as their table makes clear, the top 1 percent’s bounceback since the bottom, though quite robust, has been small compared to the initial fall. On net, the bottom 90 percent of Americans have faired poorly and the top one percent of Americans has fared even worse. The real winners have been the “9 percent”—the rich-but-not-too-rich humble workaday doctors, dentists, corporate lawyers, medium-sized business owners and so forth who don’t quite make it into the elite. I would add that this 9 percent is doubly blessed, since Obama-era tax policy has been pretty hard on the top one percent while largely sparing the 9 percent.

The chart is also a reminder that there’s more to life than inequality. The really bad news here is that wages for the bottom 90 percent fell during the recession (and of course lots of people lost their jobs, thus falling out of the wage pool) and then kept on falling during the recovery. The fact that earnings for the hyper-rich also fell is not much in the way of compensation.