PARIS/BERKELEY, Calif.–New research has found that while the United States has witnessed extraordinary economic growth since the 1970s, as many CUs already know and as the recent elections may demonstrate, more than 100 million Americans have been largely shut off from that improvement.
Indeed, the researchers said that for approximately half of all Americans their slice of the economic pie has actually shrunk over the past three-and-a-half decades.
The findings, from Thomas Piketty of the Paris School of Economics and Emmanuel Saez of the University of California, Berkeley, suggest about 117 million Americans have not seen any economic growth since the 1970s. “Even after taxes and transfers, there has been close to zero growth for working-age adults in the bottom 50%,” the researchers said.
That research found that stagnant wages have sliced the share of income collected by the bottom half of the population to 12.5% in 2014, from 20% of the total in 1980.
And where did all the money go? According to the researchers, mostly to the top 1%, whose share of the nation’s income nearly doubled to more than 20% during that same 34-year period.
The researchers said that in 1980 a person in the top 1% 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 remained close to $16,000, while members of the top 1% averaged $1,304,800, or 81 times as much.
In its analysis, the New York Times noted that the new administration and Congress in Washington will likely look to deal with the inequality in new ways. That will include aid to the poor, healthcare and taxes, all of which will affect pocketbooks and the finances of many credit union members.
The Times did note that “if there is a bright spot in the new comprehensive research, it is that after taxes and government spending, the middle class is in better shape than previous studies had shown. That earlier research had missed growth in nontaxable income like employee benefits, the researchers said.