All economic gains go to the top 1 percent
If you’re worried about a surge in inequality and the prospect of a second gilded age in Massachusetts, you’re too late. It has already happened.
The top 1 percent of households in Massachusetts now control as much income as they did in the Roaring Twenties, according to a new analysis from the Economic Policy Institute. What is more, every bit of growth we’ve eked out in the past few years has gone directly to that same 1 percent.
How bad is inequality?
The gap between the top 1 percent and everyone else is as wide as it’s been in almost 100 years, and it’s bigger in Massachusetts than in the nation as a whole.
The last time inequality was this bad, there was no such thing as a computer, no rock ‘n’ roll, not even usable antibiotics — so you could die from that blister you got playing tennis without socks (which is how Calvin Coolidge’s son died.)
Is inequality still growing?
It seems to be. The Economic Policy Institute was able to gather data only through 2012, but it found that in Massachusetts, the only group to actually benefit from our current, slow-moving recovery has been the top 1 percent.
While incomes at the very top grew nearly 50 percent between 2009 and 2012, everyone else actually lost money.
This situation isn’t unique to Massachusetts. Nationwide the top 1 percent captured 95 percent of all the gains in recent years.
Who’s in the Top 1 percent?
Massachusetts is a very wealthy state, so it takes a lot of money to crack the top 1 percent: an annual income of $532,328 to be precise. That puts us third among all states, behind Connecticut and New Jersey.
If you’re looking for the easiest place to break in, try Arkansas.
How does inequality affect me?
That depends on where you stand on the income ladder. If you’re at the top, things have never looked better. Today’s economy has a gravity-defying ability to direct gains towards executives, superstar performers, finance gurus, and the owners of capital.
Most people, however, are doing worse. If today’s economic gains were divided up the way they were in the late ‘70s, families in the middle would be making about $8,000 more each year.