An Update: the $79 Trillion Heist

I have written at length about the $47 trillion heist of income by the top 10% of the US population from 1975 to 2018.¹ I even created a little graphic to accompany this tale.

This chart from the 2020 paper by Price and Edwards² provides a detailed picture of what this looks like from various slices of the population.

Spend some real time examining this chart. The numbers are startling and demonstrate the actualities of the income re-distribution from the bottom 90% of the population to the top 10%, really most to the top 4%. 13.4 million people out of a total population of 335 million.

For example, in the second row (highlighted red), look at the people in the median, 50th percentile of the population (roughly the middle class). They started in 1975, earning $42,000 per year. By 2018, their actual income had grown to $50,000 per year, a 16% increase over 43 years. But, if their income had followed the trend line of growth for the 1948-1975 period, it is projected that they would have earned $92,000 per year in 2018. Their income would have grown by 84%!

People in the 99^th percentile earned $761,000 in 2018, far exceeding the projected $560,000 if their income had followed the growth trend in the 1948-1975 period. Even people in the 95^thpercentile underachieved income growth at 93.5%. The real winners were in the highest 4% of the population. If you were in the 99^thpercentile, you outperformed the bottom 98% with a 166% income growth compared to what if the 1948-1975 trend had continued.

The Update

But what has happened since 2018? Fortunately, Price has updated the findings through 2023.³ The results are quite startling. However, if you follow the surge in the number of billionaires in the US, it’s not really that surprising.The Forbes billionaires list in 2019 numbered 607 in the US. By April 2024, the number had grown by 34 percent to 813. In dollar terms, in 2019, US billionaires held $3.1 trillion in net wealth. This ballooned by 117 percent to $6.7 trillion at the end of 2024.

From Price’s update, the US economy continued to grow. GDP was 27 percent higher in 2023 compared to 2018. Real GDP per worker grew by 93 percent between 1975 and 2018, with an additional 9 percent from 2018 through 2023.

“Looking at the net effects of these trends, if we had the income distribution from 1975, the majority of workers (the bottom 90 percent by income) would have made an additional $3.9 trillion dollars in 2023. Cumulatively, the gap between what workers from 1975 to 2023 earned and what they would have earned with the counterfactual income distribution amounts to $79 trillion (in 2023 dollars).”⁴

As shown in the graph below, in 1975, the top ten percent of the population received roughly 33 percent of all income. In 2021 (the last year this data was available), the top 10 percent had increased their share to 53% of total income.