S ince the Great Recession, America’s wealthiest 1 percent have been demonized as fat cats who have grown ever richer while the middle class has sta

Never mind the 1 percent

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2021-05-28 20:30:05

S ince the Great Recession, America’s wealthiest 1 percent have been demonized as fat cats who have grown ever richer while the middle class has stagnated. While protesters have called for the 1 percent to be taxed more heavily, economists have been digging into data to develop a better understanding of who the top earners are.

These economists have been seeking to measure income inequality and wealth inequality, and to understand the nature of the 1 percent’s income and assets. And views differ. Some say the 1 percent are predominantly entrepreneurs and the “working rich,” people who made their money by starting and running successful businesses. Other economists note that a significant proportion of the 1 percent are the heirs of wealth accumulated over time.

“Since the 1970s, average incomes have grown, but the growth has not been uniform across the income distribution. The incomes at the top, especially in the top 1 percent, have grown much faster than average,” wrote Harvard’s N. Gregory Mankiw, in a 2013 paper entitled “Defending the One Percent.” “These high earners have made significant economic contributions, but they have also reaped large gains. The question for public policy is what, if anything, to do about it. This development is one of the largest challenges facing the body politic.”