According to inequality expert Emmanuel Saez, after falling with the financial bust, large captial losses, and the Great Recession, income concentration is back on the rise in 2010.
We’ll see where this all goes–one year does not a new trend make–but as I wrote here, the notion that growth in the new business cycle would resume its end run around middle and low-end families was predictable. All of the factors driving up inequality remain in place, most notably, high unemployment, and we know from profits data (way up), corporate balance sheets (way flush), and real paychecks of middle-class workers (way flat), that what growth has occurred hasn’t reached much below the top end.
If this expansion is to be one where growth is more than a spectator sport for average folks, we’ve got some serious policy work to do. Specifics to follow…and yes, I know I’m whistling in the wind given our current crop of policy makers, but the pendulum will swing back, my friends. The least we can do is be ready.