In recent years, we’ve been hit with a barrage of statistics, charts, and even full-length books, documenting how inequality is on the rise in America. But very few of them capture what’s happened over the last 30 years or so as well as this image:
I’ve shown this data in different ways before. The economy for the generation before about 1980 grew well and the distribution of the wealth created in that economy was balanced. For the generation after, the overall economy grew fine but all that wealth created was concentrated in the top. The rest of us saw very little change.
Between 1946 and 2008, the rate of productivity growth – as measured by GDP per capita – did not change. In fact, this rate of increase has held pretty steady for over 200 years. Go to Gapminder and you can see this displayed very nicely. There has been little or no change in the productivity over that 50 year timeframe yet the wealth produced by this productivity has not been shared as it was before 1980.
Here is another way to visualize this:
Before 1980, increases in productivity got spread around to everyone, resulting inan increase in incomes. But starting in the mid 70s or so, there was a shift. Now productivity gos up at the same rate but overall incomes no longer follows the same curve.
Unless you were in the top 1%. If the economic wealth had been distributed similarly since 1946, the median income today would be close to $90,000 for a family instead of about $65,000.
The economy got richer, there was more wealth created but little of it made it to the general population.