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The 1% Pocketed 85% of Post-Recession Income Growth

Jun 16, 2016

While millions of American workers still struggle to regain their pre-recession standard of living, none have recovered quite so well as the top 1% earners, a new report has found.

The study, released Thursday from the Economic Policy Institute, found that the top 1% of U.S. citizens, in terms of income, took home 85% of income growth between 2009 and 2013. In 15 states, the top 1% captured all income growth during the same four-year period.

Naturally, that disproportionate income growth has helped bolster their salaries. By 2013, the top 1% of families nationwide made more than 25 times as much as the other 99% of households. In New York, Connecticut and Wyoming, the highest-earning households had average incomes that were 40 times those of everyone else.

That gross income inequality is in part a result of workers in the financial sector profiting from speculation in the markets during the recession. Still, it doesn't tell the full story. While New York and Connecticut rank as the most unequal states, in terms of ratio of income of the top 1% to that of the rest of the population, that ratio is also higher than the national average in an additional seven states, 54 metro areas and 165 counties.

Additionally, certain metro areas stand out as having higher-than-average income disparities between the ultra-rich and the rest of the population. In the Jackson metro area, spanning Wyoming and Idaho, the top 1% earned an average of 213 times more than everyone else. Jackson was followed by the Bridgeport-Stamford-Norwalk area in Connecticut, where the uber-wealthy earned about 73.7 times more than the bottom 99%, and Naples-Immokalee-Marco Island in Florida, where the super-rich took home 73.2 times more.

In order to be classified in the top 1% nationally, a family needs an annual income of $389,436. The states with the highest minimum salaries to become a member of the 1% are Connecticut, at $659,979; the District of Columbia, at $554,719; and New Jersey, at $547,737.

The report points out that, between 1928 and 1979, the share of income in the hands of the 1% fell in every state except Alaska. To reduce income inequality going forward, it calls for a return to full employment, restoring bargaining power to U.S. workers, and for more proportionate executive compensation.

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