What has happened to the rich?
Following Duncan’s example, I’d like to share some more charts that tell a story without too many accompanying words being needed. The World Top Incomes Database is a new (to me at any rate) resource that allows you to look at data on the incomes of the rich in 26 different countries. There are so many possibilities here, but a good starting point is to look at the share of total income going to various groups of the rich over time.
Let’s start off with the top half per cent of the income distribution:
You can see a clear U-shaped pattern over time, with this rich group’s share falling until 1979 and rising afterwards. (The figures are tax data, which is why the longest-running series are for ‘tax units’ but we also have figures for the top half per cent of adults.*) The growth of inequality in the past 30 years can also be seen for other groups:
You may be able to make out the fact that the smaller the group, the steeper the curve. That is rather clearer in the next chart in which I have taken the real incomes (2010 pounds) of these groups and looked at what multiple it was of the income of the bottom 90 per cent of the distribution:
Over the period covered by the charts, the top ten per cent pulled away from everyone else, and the top five per cent. But the top one per cent saw an even bigger gap opening up, and the top half a per cent a bigger one still. Another way of showing this is to look at the increase in income during this period of all these groups (after taking inflation into account):
(*) For the top half per cent the data go back to 1943, other series go back to 1949 or 1962, with gaps in 1961 and 1980. The data for adults go back to 1990.