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Income inequality is returning post-recession.  According to Berkeley economist Emmanuel Saez, incomes rose 1.7% during the economic recovery.  When you break that down, income rose 11% for the top 1% of earners while the other 99% saw a .4% decline.  This is largely the result of increasing stock prices (helping shareholders) and high rates of unemployment (holding down the income of wage earners).  The income gap had shrunk during the recession (which is what normally happens). 

Top 10% are doing relatively well.  Excluding earnings from investment gains, the top 10% of earners received 46.5% of all income in 2011.  This is the highest proportion since 1917.

The median household isn’t doing great.  Median household income was $50,054 in 2011 – 9% lower than it was in 1999, after accounting for inflation.  Other studies show that middle-class incomes have grown at a higher rate if you include transfer programs and benefits.

 

How does this related to finance and investments? Well, follow the breadcrumb trail...