AMERICANS are earning less than they did in 2013, with one notable exception: the rich.
Average incomes before taxes fell for a second year in the year ended July 2014, down 0.9 percent, while expenditures were up 1 percent on average, according to data from the Bureau of Labor Statistics midyear consumer expenditures update, released on Thursday.
Only the top 20 percent of American earners experienced income growth in that time period,
swelling 0.9 percent. Their annual pre-tax income increased to $166,048. Meanwhile, every other income group shed 2 percent of wealth or more. The lowest quintile, which earned $9,818 on average, lost the most ground.
The lowest-earners also increased their spending by the most, boosting their expenditures by 2.9 percent, to $22,981 on average. The bulk of those outlays (41 percent) went to housing.
The data offer the latest signs of the growing chasm between America’s rich and poor. Federal Reserve (the Fed) Chairman Janet Yellen has used her first year as Fed chief to advocate for those hurt most by the deepest recession since theGreat Depression.
As central bank policy-makers prepare to possibly raise interest rates for the first time since
June 2006, Yellen told a Boston Fed conference on inequality in October that she’s “greatly” concerned by a sustained rise in US income and wealth inequality.