Within the United States the 50–10 gap began to grow signiﬁcantlyin the late 1970s and since the early 1990s has grown only slowly. Incontrast, the 90–50 and 90–10 wage gaps have continued to growsince the late 1970s.
Because growth was slow and unevenly sharedfrom 1979 to 1997, inﬂation-adjusted after-tax income declined forthe lowest 20 per cent of households, increased just 5 per cent for themiddle quintile, but skyrocketed more than 250 per cent for the top1per cent of earners.
One reason is that the earnings of the verywealthy (the top 0.01 per cent) went from ﬁfty times more than theaverage worker’s income in 1970 to 250 times by 1998. For example,the average compensation of the highest paid chief executives wentfrom around $1.25 million in 1970 to almost $40 million in 1999.This ‘winner-take-most’ phenomenon has meant that the share of wage and salary income going to the top 10 per cent, 5 per cent and1 per cent of taxpayers has not been higher since before the GreatDepression.
As a result, for at least half the population, twenty yearsof economic growth have produced few gains, in part because overone-third of the total increase in US GDP over this period went to therichest 1 per cent of wage earners. Those lucky enough to be in thesmall elite group, whether they are chief executives, entertainers,sports ﬁgures, attorneys or doctors, have been able to increasingly live‘lifestyles of the rich and famous’. In fact, were the top 5 per cent of earners getting today the same share of national income as they did in1978 and the economy were the same size, the average worker inAmerica would enjoy earnings of $6,100 more per year.Growing income inequality is not conﬁned to the United States;most OECD nations have seen increases.
Smeeding found thatbetween the mid-1980s and mid-1990s inequality grew signiﬁcantlyin seven of eleven OECD nations.
Canada, Finland, Germany, GreatBritain, the Netherlands, and Sweden all saw incomes get moreunequal.
For example, in the United Kingdom the richest 20 per centearned four times as much in 1977 as the poorest 20 per cent, butseven times as much by 1991.
The richest 0.1 per cent of earnersdideven better, seeing their share of income increasing from around1percent in 1978 to 3.5 per cent in 1998. However, not all nationshave seen increases. For example, income shares have remained rela-tively constant in France.Not only has the distribution of incomes gone out of kilter, but sohas the distribution of jobs, as the share of those with middle incomewages has shrunk. Wright and Dwyer found that during the 1990sthere was ‘strong growth in the top tier of the employment structure,moderately strong at the bottom, and extremely weak growth in themiddle’.
Of the 15 million full-time jobs added between 1992 and