Where the One Percent Fit in the Hierarchy of Income at Merge Left

Where the One Percent Fit in the Hierarchy of Income [New]

Written by Tim

The New York Times has a chart that, while presumably accurate to the facts (Emmanuel Saez’s IRS data is used, along with public data about income from Forbes and other sources), is horribly inaccurate in terms of relativity.

Unfortunately, I can’t replicate the chart here, in part because one key problem is the technology the Times uses. You have to scroll up and down to see data for specific groups. In the start position, for example, with .01% highlighted, you’d think the chart says the bottom 90% of income starts at $386,000. Only when you scroll down does it become clear the focus changes, the yellow highlight background moves, and the data becomes “accurate.”

Another issue is the pyramid on the right. We’re supposed to believe the width and height of the pyramid represents the relative percentages of people in each income group. However, the bottom 90% pyramid is not 10 times as wide as the next group above, 132 million in the bottom 90% compared with the 13.2 million in the top 10%. The better image would’ve been what Paul or someone else described at Open Left awhile back, imagine a parade of people of people who represent wealth and income. The size of people would be within a somewhat narrow range until the very end of the parade when people would start to be 20 feet tall, 30 feet, 50 feet, and 100 feet tall. And then the parade would be over abruptly: the number of outsized people is so tiny relative to the rest.

While I don’t expect much from the Times, this sort of botched representation is depressing because it is what passes as the historical record. And I wonder what Saenz thinks of this use of his data? While the Times chart hides the gross disparity between the haves and have nots in this country, there is plenty of data that is not so reassuring. For example, I’ve yet to see the Times report on income for all five income groups 1945 to 1980 to compare with the 1979-2009 data the CBO released in the past week. That data comparison clearly shows the failure of US economic policy in the Reagan era. For example, here are two charts from the basic Inequality.org page, which is not hard for the Times to find and uses much the same data:

Top 1% Share of Pre-Tax Income 1913 to 2009

Source: Congressional Budget Office, Average Federal Taxes by Income Group, “Average After-Tax Household Income,” June, 2010.

Average After-Tax Income by Income Group 1979 to 2009

Source: Thomas Piketty and Emmanuel Saez, “Income Inequality in the United States, 1913-1998,” Quarterly Journal of Economics, 118(1), 2003. Updated to 2008 at http://emlab.berkeley.edu/users/saez.