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A Bigger Economic Pie, but a Smaller Slice for Half of the U.S.

Even with all the setbacks from recessions, burst bubbles and vanishing industries, the United States has still pumped out breathtaking riches over the last three and half decades.

The real economy more than doubled in size; the government now uses a substantial share of that bounty to hand over as much as $5 trillion to help working families, older people, disabled and unemployed people pay for a home, visit a doctor and put their children through school.

Yet for half of all Americans, their share of the total economic pie has shrunk significantly, new research has found.

This group — the approximately 117 million adults stuck on the lower half of the income ladder — “has been completely shut off from economic growth since the 1970s,” the team of economists found. “Even after taxes and transfers, there has been close to zero growth for working-age adults in the bottom 50 percent.”

Stagnant wages have sliced the share of income collected by the bottom half of the population to 12.5 percent in 2014, from 20 percent of the total in 1980. Where did that money go? Essentially, to the top 1 percent, whose share of the nation’s income nearly doubled to more than 20 percent during that same 34-year period.

Average incomes, adjusted for inflation, grew by 61 percent from 1980 to 2014. But nearly $7 out of every additional $10 went to those in the top tenth of the income scale.

Inequality has soared over that period. In 1980, the researchers found, someone in the top 1 percent earned on average the equivalent of $428,200 a year in 2014 dollars — about 27 times more than the typical person in the bottom half, whose annual income equaled $16,000.

By 2014, the average income of half of American adults had barely budged, remaining around $16,000, while members of the top 1 percent brought home, on average, $1,304,800 or 81 times as much.

Read entire article HERE.