Income inequality is not at record-high levels

The Occupy Wall Street movement has brought a torrent of data concerning the infamous 1 percent of American households. More than three out of five respondents to a Washington Post/ABC News poll say that the gap between the rich and everyone else has never been larger. Well, it is large, especially when looking over a 30-year horizon, but as the WSJ's Robert Frank points out, inequality is actually lower than it was four years ago.

According to the IRS, people making more than $500,000 accounted for 27% of the nation's income in 2007. In 2009, the latest year available, their share fell by nearly half, to 14%, due largely to income declines at the top. Those making $200,000 saw a similar decline. In 2007, they accounted for 41% of the nation's income. By 2009, their share had shrunk to 26% -- the same level it was in 2000.

Frank's larger point, which he lays out in his new book "The High-Beta Rich," is that the very wealthy go through proportionately greater highs and lows than everyone else - and that such volatility eventually impacts the overall economy.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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