With the great and the good meeting in Davos, it is worthwhile taking a look at how the top 1 percent is doing, courtesy of a wonderful website – The World Top Incomes Database. I can’t do justice to all the data this website contains so I’ll just throw out a few numbers but take the time to visit the site and do your own ‘inequality-sleuthing’.
How much of national income does the top 1 percent take up and how do we compare? Well, the Irish top 1 percent is up there at the top. Our top 1 percent takes up over 10 percent of all national income. Our wealthy take less than those in the UK but more than the top 1 percent in all others.
There has been a long-term growth in the national share taken by top income earners – consistent with trends in other countries though, in most cases, not as extreme as we saw above.
- The top 10 percent increased their national income from 27 percent in 1977 to 36 percent in 2009
- The top 1 percent increased from 5 ½ percent to 10 ½ percent
- The top ½ percent increased from 3 ½ percent to 7 ½ percent
It should be noted that when the crash hit, the income shares of the top 1 percent and ½ percent fell slightly (crashing property /speculation income would have contributed to this). But by 2009 this had stabilised and, in the case of the top 10 percent, has started increasing.
So, with a slight interruption, the long march of the top income groups continues apace.
And just to get an idea of how much these income groups earn, the follow table lays it out.
Those in the top ½ percent earn on average over half-a-million Euros. It should be noted that this probably does not include capital gains. If it doesn’t, income would higher as most top earners receive capital income.
Consistent with the growth in income shares, actual income levels at the top would appear to be growing at a faster rate than average incomes. Between 1995 and 2009
- The average income of the top 0.5 percent grew by 134 percent in real terms (i.e. accounting for inflation)
- The average income of the top 1 percent grew by 117 percent in real terms
- The average income of the top 10 percent grew by 73 percent in real terms
Average compensation for all workers grew by approximately 40 percent in real terms.
But there’s nothing surprising in all this. The ol’ maxim – the rich get richer – holds; it’s just in Ireland, this has particular force.
Our top 1 percent experienced the highest real income growth (after inflation) than their counterparts in other European countries.
The Taoiseach and the Minister for Finance are attending the Davos summit. Maybe someone will raise these numbers with them. Maybe someone will ask what they intend to do about growing income inequality. Maybe they will have an answer.
Maybe. Maybe. Hopefully.