Tuesday, September 30, 2014

The widening US income inequality in two graphs

The two graphics in an Upshot article, extracted from a paper by economist Pavlina R Tcherneva, emphatically convey the dramatic trends in income distribution within the US society.

The first graphic shows that the share of income going to the bottom 90 percent of earners in economic expansions has risen from just 20% in 1949-53 to 116% in 2009-12 (the later reflecting the fact that incomes actually fell for the bottom 90%).
The same distribution for the top 1% shows that their share of income gains from expansions rose from just 1% to 95% in the same two periods.
It would be interesting if some one could come up with similar trends of the respective shares of wealth destruction during downturns. In any case, given that the wealth increases far outstrip wealth subtraction during regular economic cycles, the overall widening of inequality is undeniable.  

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