The Truth About Income Inequality - 3/9/15
There is a conventional view that income inequality has increased without interruption in America. While it is clear that income inequality remains extremely high from a historical perspective, a new analysis by Stephen J. Rose of George Washington University, which was recently featured in the New York Times, adds a new wrinkle to the story.
According to Professor Rose, income inequality has actually not expanded since the financial crisis began. The crisis extended from roughly two thousand and seven to two thousand and ten. That crisis diminished pretax incomes of the wealthiest Americans more than the incomes of any group. According to Rose’s research, while the wealthy have indeed received the lion’s share of financial gains since the recovery began, they still haven’t fully recovered their losses.
At the same time, steps taken by the federal government in response to the crisis, including benefit increases, have largely assisted the non-wealthy. This unexpected conclusion is not based on a new dataset, but upon precisely the same statistics that most experts use to discuss rising inequality. These statistics indicate that the income of the top 1 percent still hasn’t returned to its two thousand seven peak.