Charts: Income Growth Has Stalled for Most Americans

New Census data confirms what millions of Americans already know: The gap between the rich and the rest is steadily widening.


Yesterday the Census Bureau released its latest income data, confirming what millions of Americans already know: The recession may be over, but the recovery has yet to trickle down. Specifically, the Census reported that median household incomes didn’t budge between 2011 and 2012.

Digging deeper into the new data reveals more evidence of the widening income gap between the rich and the rest. 

The only bright side of stalled incomes is that they are no longer experiencing the steep decline that started in 2007 before the recession hit. But that’s hardly cause for celebration: At $51,017, the real median household income in 2012 is even less than it was at the end of the ’80s, and it’s down 9 percent from its high in 1999.

This loss of real income hasn’t affected all Americans equally. For the top 20 percent of earners, average incomes grew 70 percent since 1967, and they grew 88 percent for the top 5 percent. Meanwhile, middle-income households have seen their earnings grow just 20 percent in the past four decades.     

This translates into a greater share of total income going to top earners. In 2012, the top 20 percent took in more than half of all income in the United States, according to the Census.

To put that into sharper focus, I’ve charted how each percentile’s share of total income has changed since the late ’60s. After experiencing significant growth in the mid-1970s, the bottom 20 percent of earners have seen their share steadily drop. Compare that with the top 5 and 20 percent, which have seen their piece of the pie expand in the past two decades while all other Americans’ shrunk.

This trend is also seen in the latest income data complied by economists Thomas Piketty and Emmanuel Saez, which shows that the top 10 percent of earners now hold their largest share of total income since the eve of the Depression.

The new Census data on the bleak state of the American Dream came one day after Forbes released its latest list of 400 wealthiest Americans. Together, they are worth more than $2 trillion. The past year has been very good to them:

The average net worth of list members is a staggering $5 billion, $800 million more than a year ago and also a record. The minimum net worth needed to make the 400 list was $1.3 billion. The last time it was that high was in 2007 and 2008, before property and stock market values began sliding. Because the bar is so high, 61 American billionaires didn’t make the cut.

As Piketty and Saez report, 95 percent of all income growth between 2009 and 2012 went to the 1 percent.

Sources: Chart 1: Census Bureau, “Income, Poverty, and Health Insurance Coverage in the United States: 2012″ (PDF); charts 2-4: Census Bureau historical income data; chart 5: Emmanuel Saez, UC Berkeley (Excel)

Front page image: rangizzz/Shutterstock

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate