Gross domestic product is a useful metric of a nation’s economic success, but what you’d also like to know is who reaps the benefit when it grows — the rich, the poor, the middle class or everyone. During the pandemic, for example, we know that government benefits helped the poor, while stimulative monetary policy pushed up stock prices and benefited the rich in particular. What was the net result?
Three economists at the University of California, Berkeley — the postdoctoral researcher Thomas Blanchet and the professors Emmanuel Saez and Gabriel Zucman — have created an online tool to answer that question quickly and thoroughly. The tool, which calculates how economic growth is distributed across income and wealth groups, is called Realtime Inequality. It’s valuable for two reasons: It gives fresh insight into what has happened to various strata of the U.S. population during the pandemic; and it’s effectively a prototype for a measure that could someday be officially calculated and published by the federal government.
Using the tool’s drop-down menus, you can choose the time period, the unit (household or individual adult), the strata and the definition of income or wealth that you want to graph. Here’s a graph I made using data from Realtime Inequality. I zeroed in on two extremes of the population by income: the bottom half and the top 0.01 percent (that’s one person in 10,000). I plotted inflation-adjusted disposable income, which takes out taxes and adds in cash transfers such as the child and earned-income tax credits as well as “quasi-cash transfers” such as food stamps.
February 3, 2022
The New York Times