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The rich got richer last year, even as 'average' income rises

  • Overall, the median household notched solid economic gains last year, building on improvement from 2015.
  • Even though wages and salaries are on the rise, those gains have not been shared across the board.

For most Americans, things are looking up. For the wealthiest, it's a far prettier picture.

Overall, the median household notched solid economic gains last year, building on improvement from 2015. Incomes for a typical U.S. household, adjusted for inflation, rose 3.2 percent in 2016 to $59,039, according to the latest Census data.

Even though wages and salaries are on the rise, those gains have not been shared across the board.

Average incomes among the wealthiest 5 percent climbed 5.5 percent in 2016 to $375,088. Among the poorest one-fifth of households, incomes rose by just 2.5 percent to $12,943.

At the extreme ends of the spectrum, the income disparity has only intensified. In 2015, for example, the top 1 percent earned 20 percent of all income — roughly double the level from the 1980s.

In 2016, there was more of the same. "Unfortunately, the growth in 2016 was also not as broadly shared as it was in 2015," according to a recent analysis by the Economic Policy Institute.

"Families in the top fifth of the income distribution grew faster than in 2015, while the bottom 80 percent of families saw slower growth," said economists Elise Gould and Zane Mokhiber.

According to Gould and Mokhiber, there has been a "general pattern of unequal growth" since 2007.

Beginning even before the Great Recession, the bottom 50 percent (those with annual incomes below $36,000) have seen a "complete collapse" in their share of national income, according to a separate paper published by the National Bureau of Economic Research. Between 1978 and 2015, their share of income went from 20 percent to 12 percent, the paper said.

"It's only in the last two years that we have made real progress and we've just barely reached 2007 levels for the majority of families," Gould and Mokhiber said.

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