Courtesy of Mish.
In response to Top 1% Received 121% of Income Gains During the Recovery I received a couple of emails from readers that I would like to share.
Reader “Gordon” wondered how it was possible for a group to get 121% of income gains. Here is the example I sent Gordon.
Mary, Tom, and Joe work for the XYZ Corporation. They are the only three employees. Mary’s salary rose from $100,000 to $200,000. Tom and Joe were informed of hardships in the corporation and their salaries fell from $100,000 to $80,000 each.
In the above example, net salaries rose by $60,000. Mary’s salary rose by $100,000 (more than 100% of the total).
Quantifying Inequality
Reader “Z” writes … “Inequality in the US has been rising since the 80s. How do you justify your theory that inflation benefits the wealthy? Not qualitatively, quantitatively.“
First, let’s take a look at inflation as measured by the CPI (any alternative measure of inflation would suffice for this example).
CPI Percent Change From Year Ago
click on any chart for sharper image
Except for a brief period in 2009, price inflation has been positive. The question is “Who Benefited?”
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