U.S. income growth 1980 and 2014. In 1980, the poor and middle class saw the largest income growth. By 2014, the very affluent (the 99.999th percentile) see the largest income growth. Graphic: The New York Times

By David Leonhardt
7 August 2017

(The New York Times) – Many Americans can’t remember anything other than an economy with skyrocketing inequality, in which living standards for most Americans are stagnating and the rich are pulling away. It feels inevitable.

But it’s not.

A well-known team of inequality researchers — Thomas Piketty, Emmanuel Saez and Gabriel Zucman — has been getting some attention recently for a chart it produced. It shows the change in income between 1980 and 2014 for every point on the distribution, and it neatly summarizes the recent soaring of inequality.

The line on the chart (which we have recreated as the red line above) resembles a classic hockey-stick graph. It’s mostly flat and close to zero, before spiking upward at the end. That spike shows that the very affluent, and only the very affluent, have received significant raises in recent decades.

This line captures the rise in inequality better than any other chart or simple summary that I’ve seen. […]

The message is straightforward. Only a few decades ago, the middle class and the poor weren’t just receiving healthy raises. Their take-home pay was rising even more rapidly, in percentage terms, than the pay of the rich. […]

In recent decades, by contrast, only very affluent families — those in roughly the top 1/40th of the income distribution — have received such large raises. Yes, the upper-middle class has done better than the middle class or the poor, but the huge gaps are between the super-rich and everyone else.

The basic problem is that most families used to receive something approaching their fair share of economic growth, and they don’t anymore. [more]

Our Broken Economy, in One Simple Chart

2 comments :

  1. Anonymous said...

    "Correction: August 8, 2017 An earlier version of a chart accompanying this column overstated the average income growth for American adults in 1980. It is 2 percent, not 2.5 percent."

    How many more "corrections" will there be?  

  2. Jim said...

    How many corrections to his numerous false statements has Donald Trump tweeted?  

 

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