Center for American Progress • PolicyLink |
Increasing income inequality
Te gap beween rich and poor has widened since 1980 and he Unied Saes now hashe hird-wors income inequaliy among advanced indusrial naions.
Economic gainsare no being widely shared and insead are concenraing a he op. Beween 1947 and1976 he op 10 percen o earners ook home a hird o he naion’s pre-ax income; by 2008 heir share had increased o 48 percen. In he same ime period, he share goingo he op 1 percen grew rom 8 percen o 18 percen.
Income growh is disribuedeven more unevenly: Te botom 90 percen o households only capured 16 percen o income growh beween 1989 and 2007 while he op 1 percen received 56 percen.
Rising productivity, stagnant wages
American workers produce more oupu per hour han ever beore bu heir produciviy gains are no ranslaing ino higher wages. In 2010 average annual produciviy rose by 3.9 percen ye labor coss (workers’ compensaion) ell by 1.5 percen.
During he las business cycle (2001 o 2007) beore he Grea Recession, worker produciviy increasednearly 19 percen bu he real income o he median working-age household decreased by abou 2 percen while he coss o healh care, housing, and college have increased.
Wha’s more, he rend began even earlier. From 1979 o 2005 he incomes o hemiddle 60 percen increased by 18 percen ($9,000) and he incomes o he botom20 percen increased by only 1 percen ($200). Meanwhile, he incomes o he op hincreased 75 percen ($99,200). Tis is a sark deparure rom he 1947-o-1973 period when he incomes o he poores h o amilies increased a abou he same rae as heincomes o he wealhies h.
Growing wealth gap
Te wealh divide in our naion has grown even more dramaically han he incomeand wage divide. Te collapse o he housing bubble, ollowed by he oreclosure crisis,he decline in home prices, and he glu o “upside-down” morgages, sripped many lower-income amilies o heir mos signican—and oen, only—asse. Wealh wasdesroyed across he board bu lower- and middle-income households were dispropor-ionaely aeced.From 2007 o 2009 he botom 80 percen o Americans los 25 percen o heir wealh,on average, and he op 20 percen los 16 percen. Te share o oal wealh held by he botom 80 percen o he populaion dropped rom 15 percen o 13 percen inhe same ime period while he share going o he op 20 percen increased rom 85percen o 87 percen.
Stunted economic mobility
Americans end o be oleran o economic inequaliy as long as opporuniies exis omove up he economic ladder. Bu he acual chances ha a child born o a poor am-ily will improve his or her lo are much lower in he Unied Saes compared o oher