Income Inequality

Income inquality in the United States

Income inequality is a growing problem in the United States.  According to Piketty et al in Distributional National Accounts: Methods and Estimates for the United States, the growth in incomes since 1980 had been almost entirely in the top 50% and mostly in the top 1%.  From 1946-1980 incomes grew for all Americans and this growth was greatest in the bottom 90% of incomes.  Income inequality would have decreased in this period.  However from 1980-2014 this changed dramatically.  Incomes in the bottom 50% basically did not grow at all and in the bottom 20% actually decreased by 25%.  Everyone outside of the to 10% of incomes say their income growth decrease dramatically.  And as the wages increased the growth increased as well. The top 0.001% say the income growth go from 57% to 636%.  We have gone from a county were income inequality was shrinking to one where inequality is getting worse at increasing rates.

From this graph, we can see that in the 1970’s the share of total income of the top 10% and 1% was at its lowest.  However, in the 1980’s this changed and their share of total income started growing as income inequality started becoming worse and worse.   Even if we include post tax income the gains of the top 10% and especially the top 0.001% massively outpaces the gains of the bottom 90%.

What we can do

This is a problem that needs to be solved.  The Republican plan for giving massive tax cuts to the rich while giving basically nothing to everyone else and doing nothing to help workers’ wages is not a solution.  This will only make income inequality even worse.  We need to implement an even more progressive tax plan while also making sure that workers wages are keeping up with productivity and inflation.  This way we can make sure that our workers are being paid a wage that they can live off of and make this country more equal.


Piketty, Thomas and Saez, Emmanuel and Zucman, Gabriel, Distributional National Accounts: Methods and Estimates for the United States (December 2016). NBER Working Paper No. w22945. 

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