One of my standing Google Alerts brought me to someone's blog post about income concentration in the US, which took me back to my spreadsheets on the subject. My spreadsheets start with Piketty & Saez's annual spreadsheet, and then add in some calculations. Many people who report on their data seem to me to miss the most important columns. What many people report is this breakout:
- Top .01%
- Top .1%
- Top .5%
- Top 1%
- Top 5%
- Top 10%
The data is powerful. Looking at income including capital gains and fractiles defined using that income definition (their Table A3), we find the following income shares for 2007:
- Top .01%: 6.04%
- Top .1% 12.28%
- Top .5% 19.31%
- Top 1% 23.50%
- Top 5% 38.67%
- Top 10% 49.74%
- and by inference, bottom 90% 50.26%.
But where it gets interesting is to break out the fractiles individually, and then to look at trends. Here are a few selected years from the P&S tables, which start in 1913:
| Income Concentration, selected years 1913-2007 |
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| Year |
Top .01% |
Next .09% |
Next .4% |
Next .5% |
Next 4% |
Next 5% |
Bottom 90% |
| distribution per 10,000 population |
1 |
9 |
40 |
50 |
400 |
500 |
9,000 |
| 1913 |
2.76% |
5.86% |
6.11% |
3.23% |
n/a |
n/a |
n/a |
| 1917 |
3.37% |
5.04% |
5.94% |
3.39% |
12.90% |
9.87% |
59.49% |
| 1920 |
1.66% |
3.69% |
5.79% |
3.69% |
13.49% |
10.69% |
60.99% |
| 1935 |
2.19% |
4.20% |
6.24% |
4.04% |
15.61% |
12.21% |
55.51% |
| 1944 |
1.16% |
2.59% |
4.50% |
3.02% |
11.48% |
9.75% |
67.49% |
| 1953 |
0.97% |
2.09% |
3.97% |
2.88% |
12.11% |
10.29% |
67.69% |
| 1960 |
1.17% |
2.07% |
3.88% |
2.91% |
12.54% |
10.90% |
66.52% |
| 1970 |
1.00% |
1.78% |
3.48% |
2.77% |
12.64% |
10.96% |
67.37% |
| 1981 |
1.37% |
2.20% |
3.67% |
2.78% |
13.02% |
11.51% |
65.46% |
| 1991 |
1.96% |
3.17% |
4.86% |
4.48% |
14.36% |
11.82% |
60.45% |
| 2002 |
3.14% |
4.20% |
5.70% |
3.83% |
15.20% |
11.75% |
56.18% |
| 2007 |
6.04% |
6.24% |
7.04% |
4.19% |
15.17% |
11.07% |
50.26% |
| chg 2002-2007 |
+2.90% |
+2.04% |
+1.34% |
+0.36% |
-0.3% |
-0.68% |
-.5.92% |
| chg 1991-2007 |
+4.08% |
+3.07% |
+2.18% |
-0.29% |
+0.81% |
-0.75% |
-10.19% |
| chg 1970-2007 |
+5.04% |
+4.46% |
+3.56% |
+1.42% |
+2.53% |
+0.11% |
-17.11% |
| Source: Piketty and Saez 2007 spreadsheet, Table A3 (includes capital gains in both income and fractile definitions) and LVTfan calculations |
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One way to read this is that of the 17.11% of income which the bottom 90% lost between 1970 and 2007, nearly 30% went to the 1-in-10,000 fellow, 26% went to the 9-in-10,000, 21% went to the 40-in-10,000, and the remaining 24% went to the 950-in-10,000. I'm willing to guess (or concede, if you will) that half or more of those 50-in-10,000 in 2007 were not in the top 50-in-10,000 37 years earlier (and that many in the 1970 top 50-in-10,000 were no longer alive in 2007).
Henry George wrote about a wedge driven through society. That was 130 years ago.
So what's your guess for 2008?
- Do you think the bottom 90% of us will have more than 50% of the income, or drop below 50%?
- Do you think the share of the 90th to 95th percentile will rise or fall?
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