Alongside Rising Top Incomes, The Level Of Living Of America’s Poorest Has Fallen
When the poorest gain, the lower bound, or ‘floor’, of the distribution of living standards rises. Using microdata spanning the last 30 years, this column argues that the floor in the US has been sinking, alongside rising top incomes. The floor would have fallen further without public spending on food stamps, which helped protect the poorest in the wake of the 2008 financial crisis. As is well known, the US is experiencing a marked rise in top incomes (e.g. Piketty and Saez 2017), with relative stagnation of middle household incomes. But what is happening at the other extreme of the distribution? Are America’s poorest families seeing some progress? That is the question this column tries to answer. Some terminology first. “Top incomes” refers to the incomes of the richest 1%. We refer to the lower bound of the distribution of levels of living as “the floor”.