Bloomberg:Top 1% Got 93% of Income Growth as Rich-Poor Gap Widened
Tuesday, October 2, 2012
Bloomberg, Peter Robison
Since 2009, Anita Reyes’ wages have been as frozen as Lake Minnetonka in January.
While the U.S. economy was recovering from the Great Recession, Reyes, 52, a casino dealer from Minneapolis, was dining on $1.67 cans of soup and searching for a way to keep her house, which was foreclosed on last October.
“I went backwards,” Reyes said. “Two years ago, three years ago, I didn’t know I’d be looking at being homeless.”
Stephen Hemsley’s salary has been frozen too. His income hasn’t.
The chief executive officer of Minnetonka, Minnesota-based health insurer UnitedHealth Group Inc. (UNH) earned $1.3 million in salary every year since 2007. Still, as the economic recovery took hold from 2009 to 2011, Hemsley, 60, exercised stock options worth more than $170 million and made at least $51 million from share sales, making him the object of an “Occupy Lake Minnetonka” protest on the ice outside his lakeside home each winter.
The divergent fortunes of Reyes and Hemsley show that the U.S. has gone through two recoveries. The 1.2 million households whose incomes put them in the top 1 percent of the U.S. saw their earnings increase 5.5 percent last year, according to estimates released last month by the U.S. Census Bureau. Earnings fell 1.7 percent for the 96 million households in the bottom 80 percent -- those that made less than $101,583.
The recovery that officially began in mid-2009 hasn’t arrived in most Americans’ paychecks. In 2010, the top 1 percent of U.S. families captured as much as 93 percent of the nation’s income growth, according to a March paper by Emmanuel Saez, a University of California at Berkeley economist who studied Internal Revenue Service data.
Full Bloomberg article.
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