Income inequality: It wasn’t always this way

In recent decades, the bulk of income growth in America has gone to the top 10% of families, but that was not always the case. Throughout most of the 20th Century, the bottom 90% claimed a much larger share of income growth than they have in recent years.

The Chart, from EPI’s new interactive State of Working America Web site, compares the distribution of income growth over two periods. Between 1948 and 1979, a period of strong overall economic growth and productivity in the United States, the richest 10% of families accounted for 33% of average income growth, while the bottom 90% accounted for 67%. The overall distribution of income was stable for these three decades. In an extreme contrast, during the most recent economic expansion between 2000 and 2007, the period that led up to the Great Recession, the richest 10% accounted for a full 100% of average income growth.


The other issue not mentioned here, but a factor that is just as relevant – the Middle-Class paid the bulk of taxes and did the majority of the spending in support of the economy.

I am not sure when it became necessary to reduce the production of manufactured goods at the expense of the maintaining the supply and demand ratio necessary for continued growth in the United States.

The change to exportation of technology created a scenario that was compounded by the lack of judiciary economic policies, i.e., the inability to balance the national budget which resulted in a full-blown recession.

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