As a whole, the population of the United States is wealthier today than it has ever been. But, as has often been reported, the relative increases haven't been uniform. In 1970, the top ten per cent of the population earned a third of the total national income. By 2012, it earned half. According to estimates by Emmanuel Saez, an economist at the University of California, Berkeley, income inequality has grown by record amounts since the 2008 recession: between 2009 and 2012, incomes for the top one per cent of the population rose by more than thirty per cent, while those for the rest of the country—the bottom ninety-nine per cent—increased by less than half of one per cent.
But there's one thing that hasn't changed all that much: social discontent stemming from rising inequality. This might be somewhat surprising. According to social-science research, self-reported happiness traditionally correlates roughly with income inequality: in years when inequality lessens, people report greater life satisfaction. It's not so much a question of absolute income as one of how unequal the distribution of incomes is. Justin Wolfers, an economist at the University of Michigan who studies income and happiness, told me that one way to understand it is to imagine him taking a dollar from Bill Gates and giving it to me. “Each extra dollar buys less happiness,” he says, noting that I would get more happiness from that dollar than Gates did. “It's the basic marginal benefit of each extra dollar. Inequality reduces happiness—every social scientist has a strong presumption of this.”
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