Growth of Income Inequality

The Great Divergence In Pictures: A visual guide to income inequality. [Slate]

by Catherine Mulbrandon

in Client Work, Growth of Income Inequality, VE Infographics

First published in Slate to accompany an article written by Tim Noah, I created these graphs about income inequality covering the changes in income inequality as well as looking at changes in race, gender, education, taxes and political party in the White House.

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Has Middle America’s Wages Stagnated?

by Catherine Mulbrandon

in Growth of Income Inequality, VE Infographics

{Click on the image to take a closer look}

I found a Federal Reserve article that analyzed the change in Average Hourly Earnings for production and nonsupervisory workers. After adjusting for inflation using the Personal consumption expenditures (PCE) {instead of the Consumer Price Index-Urban Wage Earners and Clerical Workers (CPI-W)} and including an estimate for worker’s benefits, the author concluded that workers’ hourly earnings (wages plus benefits) actually increased by 16% over 30 years (1975-2005) rather than decreased. Here, I graphed the full history, 1964-2006, but used the approach laid out in the article to show the effect of inflation and benefits. BTW, if you earned $16.76 an hour in 2006 that gave you an annual income of $33,520 (assuming you worked full-time).

[tags]income distribution, income inequality, Federal Reserve, wages, middle class[/tags]

Addendum: This was past on to me from a reader who found it on Marginal Revolution

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Comparing Income of Top 0.1 Percent in Five Countries

by Catherine Mulbrandon

in Growth of Income Inequality, VE Infographics

I created these graphs to show the change in the share of income going to the top 0.1%, comparing the United States to Canada, United Kingdom, France, and Japan from 1913-2004.

{Click on the graph to take a closer look}

The effect by the two World Wars is clear but what is more subtle is the effect on the share of income going to the very wealthy due to the change in the top income tax rate. This could be due to attempts by the very wealthy to hide their income from the IRS or else having a higher tax rate will impact the distribution of income or both. I didn’t have the marginal rates for the other countries but it would be interesting to see if they have a similar relationship between the share of total income captured by the Top 0.1 percent and income tax rates.

The income data can be found here on Emmanuel Saez’s web site. I found the marginal tax rate for the United States in the SOI Bulletin Historical Table A at the IRS site via truthandpolitics.org

[tags]income distribution, marginal tax rate[/tags]

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Share of GDP: 99th 95th 90th

by Catherine Mulbrandon

in Growth of Income Inequality, VE Infographics

In my earlier post, I graphed the share of GDP going to the bottom 90% and top 10%. In this graph I am comparing the bottom 99th, 95th and 90th Income/GDP ratios (including capital gains). The same pattern appears: the decline in GDP share occurring in the 70s for each percentile.

Based on some comments on other graphs I posted I have added a few new items. First I am displaying recessions (via the gray bands) along with timeline of wars and presidential terms in order to provide some historical context. Second, I copied the data used in this graph into a Google spreadsheet which can be viewed by anyone with a Google Account.

{Click on the graph to take a closer look}