Photo by TIMOTHY A. CLARY/AFP/Getty Images
Cue the drum circle.
A new study from the Congressional Budget Office shows that the income of America’s richest 1 percent grew 275 percent between 1979 and 2007, compared with a 65-percent gain for the top 20 percent and an 18-percent gain for the bottom 20 percent. The average increase for all households came in at 62 percent.
From the report: “The precise reasons for the rapid growth in income at the top are not well understood. Researchers have offered several potential rationales, including technical innovations that have changed the labor market for superstars (such as actors, athletes and musicians), changes in the governance and structure of executive compensation, increases in firms’ size and complexity, and the increasing scale of financial-sector activities.”
The top one percent also managed to more than double their share of the nation’s income over the three decades. As the New York Times points out, the CBO explained that federal policy has become less redistributive since the late 1970s, and that federal benefit payments are doing less to even out income distribution as a growing share of benefits such as Social Security are funneled to older Americans, regardless of their income.