Updated May 7, 2022 - Economy

The rich get poorer

Percentage change in average income, by group
Data: Realtime Inequality; Chart: Baidi Wang/Axios

If your income is rising much more slowly than inflation, that's a sign you might be rich.

Why it matters: The bottom 90% of earners are seeing their income keep up with inflation, while the bottom 50% had wage gains 3.4% bigger than inflation in the first quarter of 2022. That's according to Realtime Inequality, a project that attempts to disaggregate growth statistics by income percentile.

By the numbers: Real income for the bottom 50% rose by a stunning 11.7% in 2021. The top 1% did even better, seeing their incomes rise by 12.7% last year — thanks in large part to soaring markets.

  • In the first quarter of 2022, wage gains for the bottom half continued — but a sluggish market meant that rich folks' income growth turned negative.

What they're saying: "Growth was strong for the working class," concludes Berkeley economist Gabriel Zucman, a c0-founder of the website.

  • First-quarter economic growth was negative, which implies that some group of Americans had to bear the brunt. In this case, it was the rich. "All the decline in GDP is concentrated in the top 10%" of the income distribution, says Zucman.

The bottom line: Wage inflation is good for workers, and bad for the rentier classes.

Editor’s note: This story has been corrected to state that the bottom 50% of earners had wage gains 3.4% bigger than inflation in the first quarter of 2022 (not 2021). This story was originally published on May 3.

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