History of income inequality in the United States

"Distribution of Income" written by Frank Levy for The Concise Encyclopedia of Economics. It discusses the history of income inequality in the United States in the 2oth century. A couple interesting comments about the 80s and why people felt that the Middle Class was disappearing:

When incomes grow rapidly, more inequality means that the poor get richer but the rich get richer faster. But when inequality increased in the slow-growth eighties, some groups' incomes fell in real terms. Between the business cycle peak of 1979 and the next business cycle peak of 1989, the average income of the poorest fifth of families fell from $10,900 to $10,200, while the average income of the top fifth grew from $89,600 to $97,600. Moreover, the price of two key pieces of a middle-class life—a single-family home and a college education—grew faster than the general rate of inflation and faster than average incomes. For all of these reasons, slow income growth played a key role in perceptions of a vanishing middle class . . .

. . . even though overall family income inequality has not increased very much.

Related Posts Plugin for WordPress, Blogger...