The Rich Get Richer Through the Recovery

An updated study by the prominent economists Emmanuel Saez and Thomas Piketty shows that the top 1 percent of earners took more than one-fifth of the country’s total income in 2012, one of the highest levels recorded in the century that the government has collected the relevant data.

The top 10 percent of earners took more than half of all income. That is the highest-ever recorded level.

The figures underscore that even after the recession the country remains in a kind of new Gilded Age, with income as concentrated as it was in the years that preceded the Great Depression, if not more so.

High stock prices, rising home values and surging corporate profits have buoyed the recovery-era incomes of the rich, with the incomes of the rest still weighed down by high unemployment and stagnant wages for many blue- and white-collar workers.

“These results suggest the Great Recession has only depressed top income shares temporarily and will not undo any of the dramatic increase in top income shares that has taken place since the 1970s,” Mr. Saez, of the University of California, Berkeley, wrote in his analysis of the data.

The income share of the top 1 percent of earners in 2012 returned to the same level as before both the Great Recession and the Great Depression: just above 20 percent, jumping to about 22.5 percent in 2012 from 19.7 percent in 2011.

That increase is probably in part due to one-time factors. Congress made a last-minute deal to avoid the expiration of all of the Bush-era tax cuts back in January. That deal included a number of tax increases on wealthy Americans, including bumping up levies on investment income. Seeing the tax changes coming, many Americans cashed out stocks and other investments in 2012 to take advantage of the lower rates.

But the economists noted that the trends looked the same for income figures including and excluding realized capital gains â€" implying that tax arbitrage is not the only reason that the top 1 percent did so well relative to everyone else in 2012.

There is a glimmer of good news for the other 99 percent in the report, too. Mr. Piketty and Mr. Saez show that the incomes of that group stagnated between 2009 and 2011. In 2012, they started growing again - if only by about 1 percent, while the income of the top 1 percent surged nearly 20 percent that year.

The new data shows that the top 1 percent of earners saw their incomes decline about 36 percent during the recession, and rebound about 31 percent in the recovery. The incomes of the other 99 percent plunged about 12 percent in the recession and have barely grown since then, on aggregate. Thus, the 1 percent have captured about 95 percent of the income gains since the recession ended.

Mr. Saez and Mr. Piketty, of the Paris School of Economics, plan to update their data again in January, after more complete statistics become available.