Measuring Inequality Trends During the Great Recession

February 17, 2015

In 2013 Emanuel Saez claimed that 95 percent of growth during the recovery from the Great Recession went to the top 1 percent. In reality though, the richest 1 percent of households saw their after-tax incomes decline by 27 percent from 2007 to 2011, the bottom 95 percent saw losses of only 1 or 2 percent. Therefore, contrary to the claims of some advocates, we should not abandon prow growth and innovation policies in favor of straight redistribution. By balancing innovation-centric policies with necessary reforms to strengthen the social safety net we can promote growth and provide support to the largest number of citizens.