Atop the Food Chain
That the richest Americans have extended their advantage on the other 99% is well known. This spring, the Congressional Budget Office reported that, during the 35-year period from 1979 through 2014, the top 1% of wage earners had increased their real incomes by a cumulative 221%, as opposed to 69% improvement for the next wealthiest 19%, and 27% for the four remaining quintiles. If this were a fight, it would be stopped.
Less recognized is that the stock market has followed suit, with the largest 1% of companies outgaining their rivals. To be sure, this has not been a 35-year trend. The behemoths are ahead only since the 2008 financial crisis, with most of their bulge occurring over the past five years. Nonetheless, it has been a noteworthy achievement; the bluest of chips do not typically lead a bull market.
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John Rekenthaler does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.