Wage Increases, Transfers, and the Socially Determined Income Distribution in the USA

Posted: 12 Aug 2015

See all articles by Lance Taylor

Lance Taylor

The New School - Bernard Schwartz Center for Economic Policy Analysis (CEPA)

Armon Rezai

Vienna University of Economics and Business

Rishabh Kumar

UMass Boston

N. H. Barbosa-Filho

Universidade Federal do Rio de Janeiro (UFRJ) - Institute of Economics

Laura Carvalho

Sao Paulo School of Economics - FGV

Date Written: April 1, 2014

Abstract

This paper is based on a social accounting matrix (SAM) which incorporates the size distribution of income based on data from the BEA national accounts, the widely discussed 2012 CBO distribution study, and BLS consumer surveys. Sources and uses of incomes are disaggregated by household groups including the top 1%. Their importance (including saving rates) differs markedly across households. The SAM reveals two transfer flows exceeding 10% of GDP via fiscal (broadly progressive) and financial (regressive) channels. A third major flow over time has been a ten percentage point increase in the GDP share of the top 1%. A simulation model is used to illustrate how “reasonable” modifications to tax/transfer programs and increasing low wages cannot offset the historical redistribution toward the well-to-do.

Suggested Citation

Taylor, Lance and Rezai, Armon and Kumar, Rishabh and Barbosa-Filho, Nelson Henrique and Carvalho, Laura, Wage Increases, Transfers, and the Socially Determined Income Distribution in the USA (April 1, 2014). Institute for New Economic Thinking Working Paper Series No. 11, Available at SSRN: https://ssrn.com/abstract=2638042 or http://dx.doi.org/10.2139/ssrn.2638042

Lance Taylor (Contact Author)

The New School - Bernard Schwartz Center for Economic Policy Analysis (CEPA) ( email )

80 Fifth Ave.
5th Floor
New York, NY 10027
United States

Armon Rezai

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

Rishabh Kumar

UMass Boston

100 Morrissey Blvd.
Boston, MA 02125
United States

HOME PAGE: http://kumar1776.wordpress.com

Nelson Henrique Barbosa-Filho

Universidade Federal do Rio de Janeiro (UFRJ) - Institute of Economics ( email )

Rio de Janeiro, 22 290 080
Brazil

Laura Carvalho

Sao Paulo School of Economics - FGV ( email )

984, Perdizes
Sao Paulo, 05014-901
Brazil

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