The impact of the pandemic illustrates how crucial it is to have timely and distributional economic data. To better understand how each income and wealth group benefits from the growth of the national income* in the US, Thomas Blanchet, Emmanuel Saez and Gabriel Zucman launched Realtime Inequality, the first platform providing timely statistics on how economic growth is distributed. The data online is updated each quarter, when new growth numbers come out.
“For the first time, this platform allows to talk about inequality exactly at the same time we are talking about the latest growth numbers, putting inequality on equal footing to economic growth in the public debate”, explains Emmanuel Saez.
(*) National income is similar to GDP (which grew slightly less in 2021) and a better indicator of income earned by US residents
KEY FINDINGS
One of the major findings of Realtime Inequality is economic recovery since the beginning of the COVID-19 pandemic, Saez noted.
- Each income group recovered its pre-pandemic income level within 20 months.
- On an individual level, the average national income per adult increased by 7.6% in 2021. Those in the bottom 50% saw a rise in income of 11.7%.
- At the end of 2021, wealth concentration peaked at the highest level since World War II.
TIMELY INEQUALITY DATA ON INCOME AND WEALTH
On Realtime Inequality, you can adjust the variables of the graph: type of income or income growth displayed, data frequency, time range, etc. You can also select groups using the box on the right.
Interpretation: Between January 1980 and December 2021, the income of the 10% highest income earners grew by 150%, when that of the poorest half of the population grew by 18%.
You can also download the datasets by clicking on the button below the graph
(*) All dollar figures are annualized and adjusted for price inflation to 2021 dollars.
COVID’S IMPACT ON INCOME
On this page, you will explore displays the impact of the pandemic on the factor income, that is the addition of the labor income from work and of the capital income from ownership of assets. As we see on the graph below, the factor income fell significantly during the COVID-19 pandemic, and even more dramatically for those in the bottom 50% (green line). All income figures are adjusted for price inflation. However, we see that the factor income recovered quickly for every group at the end of 2021.
THE ROLE OF THE GOVERNMENT TO ALLEVIATE ECONOMIC HARDSHIP
Another interesting variable to look at is the disposable income, which is the income that people have after paying taxes and receiving transfers, and can use for consumption and savings.
On the graph below, we see that thanks to government transfers to help with COVID losses (including checks to families, extra unemployment benefits, the Paycheck Protection Program, etc.), disposable income (defined as income after taxes and cash transfers) increased by a sizable amount, especially for the bottom 50%. This shows the enormous power of the government to alleviate economic hardship and make the distribution of income more equitable.
METHODOLOGY
Realtime Inequality provides timely statistics on how economic growth benefits each group. Statistics are created by combining the most recent micro-level data on income and wealth with the national account data. Our income and wealth statistics distribute all national income and household wealth across groups. Our series adjust for price inflation and are expressed in 2021 dollars. Just like GDP, our estimates for 2021 are preliminary and will be adjusted as more comprehensive data come out in the coming months.
For complete methodological details:
- Visit the Methodology page //realtimeinequality.org/methodology/
- Download the paper //eml.berkeley.edu/~saez/BSZ2022.pdf
CONTACT
Authors
- Thomas Blanchet (World Inequality Lab; University of Berkeley, California)
- Emmanuel Saez (University of Berkeley, California)
- Gabriel Zucman (University of Berkeley, California)
Media Inquiries
Olivia Ronsain: olivia.ronsain@psemail.eu; +33 7 63 91 81 68
IN THE MEDIA
//www.nytimes.com/2022/02/02/opinion/inequality-wealth-pandemic.html
