Journalism in the Public Interest

America’s Growing Income Gap, by the Numbers

Some important statistics on the growth of income inequality over the past three decades.

The nonpartisan Congressional Budget Office recently released a much-discussed study showing that over the past three decades the income of the highest-paid Americans has soared while the income of others has grown much more modestly. Here’s a rundown of some statistics illustrating the growing income gap.

But first, some context. These numbers reflect income, not wealth. So a retiree who owns two houses and three cars may be far better off than someone with a higher annual income, two kids in college and a mortgage. It's worth noting that income includes investment income and capital gains.

Also, although a 2010 Organization for Economic Cooperation and Development study suggests that there is less income mobility [PDF] in the United States than in many other developed countries, someone in the richest 1 percent this year may have been in an entirely different category 30 years ago. Take Bill Gates. In 1979, Gates was 24, and Microsoft hadn’t even incorporated. He was likely in the bottom tier of earners.  More recently, of course, he has easily been in the top 1 percent. According to a 2007 Treasury Department study [PDF], “roughly half of taxpayers who began in the bottom income quintile in 1996 moved up to a higher income group by 2005.”

Third, though income growth has been unequally distributed, real income for all groups has grown over the past three decades.

In spite of those caveats, the gap between richest and poorest is far greater than it used to be. All income numbers have been adjusted for inflation, and all household income data are adjusted for differences in household size [PDF; see Appendix A]. Please note that different subsections take different years as a baseline.

(Update, 11/4) You can also find out how income inequality in your county ranks compared to other parts of the U.S. using this interactive chart.


Overall income growth for the country as a whole

Disposable personal income per capita:

1980 $18,822
1990 $23,542
2000 $28,911
2010 $33,125


All figures in constant 2005 dollars. Source:


Unevenly distributed growth

Top 1% of Households 275%
Poorest Fifth of Households 18.3%
Middle Fifth of Households 35.2%


Source: Congressional Budget Office



  1979 2007
Top 1% of Households 10.5% 21.3%
Poorest Fifth of Households 2.9% 2.5%
Middle Three Fifths of Households 47.8% 38.5%


Source: Congressional Budget Office


Large gains for the highest earners, modest gains for the rest

  1980 1990 2000 2007
Top 1% of Households $339,200 $586,000 $1,038,700 $1,319,700
Poorest Fifth of Households $14,800 $14,800 $16,500 $17,700
Middle Fifth of Households $42,600 $45,000 $50,400 $55,300


All figures in constant 2007 dollars. Source: Congressional Budget Office


Decline in median individual income for men, slight gains for women throughout the 2000s

  1995 2000 2005 2010
Men $32,051 $35,885 $34,929 $32,137
Women $17,232 $20,338 $20,747 $20,831


All figures in constant 2010 dollars. Source:


Comparison to other countries

Income inequality on a scale from 0 to 1, 1 being the most unequal:

France 0.239
Poland 0.305
Greece 0.307
United States 0.378
Mexico 0.476


Source: Bertelsmann Stiftung

Correction (11/3): One of the charts in this post incorrectly stated that the 81st-99th percentiles accounted for 28.6 percent of U.S. income in 2007. In fact, they accounted for 38.6 percent of U.S. income.

Your caveat with Gates was a bit silly. Most people come out of college in a lower earning bracket unless they’ve already inherited a great deal of money. Bill Gates came from a well-off family, his father was a partner in a law firm. So while Gates himself wasn’t rich, his family was probably in the top ten 10%. Does that really count as “income mobility”?

Income mobility: I personally know someone who lived for a couple of decades in the poorest fifth income level until he reached age 35 - holding down menial jobs on a sporadic basis, and mooching off others.

Then his trust fund kicked in and he immediately jumped to the top 1% where he will remain for life - as will his children and their children. (It’s a very well managed trust fund.)

George K McHugh

Nov. 3, 2011, Noon

Thank you for compiling this report.  I think is is curious that the top 1%, the supposed “Job Creators” are not creating jobs inspite of their growing wealth.  So much foor the Republican mantra,

Heather Trumbower

Nov. 3, 2011, 12:02 p.m.

The percentages in the 2007 income distribution don’t total to 100%, more like 90%.

I agree with Amber.  Rather than Bill Gates grabbing the gold ring he was handed it and, to his credit really, ran with it.  The more shocking relationships have to do with comparing the economic stratification of the UnIted States and countries like India and Brazil, where we are shockingly close.

The After Tax Income [ chart ]  is the one most people fix on., and media has reported on.  Seen that one several times in the past few days.  It is., a rather staggering difference.
  Is this do to the fact that the higher the wage/earnings.., the easier it is for them to afford a good tax attorney.., and avoid paying a high tax load.?? 
  So.., they have better access to information.., or at least can pay for that information.., where the majority of us can’t afford it.
  Some tax specialist/attorney needs to “go-rogue” and spill the secrets for the rest of us.!!!

I graduated from a high school in a unionized, working class neighborhood in 1976.  Less than 10% of my graduating class went to college.  The rest worked at local businesses, union and nonunion.

Most of my class that went to college went on to bigger things and I achieved even bigger things as a businessman and entrepreneur.

All these attacks do is keep people like me from investing in new business enterprises.  Are we angry… no!  Just like 1979 and Jimmy Carter we will wait for a new president and a better environment that is more receptive to new business creation.  If Obama is re-elected then we will wait another four years.  Most people in my circumstance have enough on their plate and think of the next year or possibly five years as a time to rest and reflect.  Why take risks of new business formation when you have an angry populist/socialist in the White House.

BTW it isn’t the 99%.  My guess is the top 20% most of whom did choose to graduate from college and earn a lot more than those who chose not to go to college are doing very well even in these most difficult times.  It is non-college graduates and just-graduated college graduates that are hurting the most right now.


1/5 + 3/5 = 4/5 or 80%

81st thru 99th percentile + 1% = 100%

As the chart correctly shows.

Why dosen’t anyone want to bring this to 2010? Look at where the working (blue collar) were in 2007 and whare they are today. How many that had a job in 2007 were unemployed ln 2010. they are still unemployed or earning a lot less than in 2007. George, The job creators are creating jobs.In Brazil,Russia, India and Chine. We gave the big banks billions to use in these countries also. They took money that the tax payers of this country will have to payback because our government had to borrow the money. They invest it in foreign countries in order to make the big profits they want. They care less about this country everyday.


28.6 + 21.3 + 2.5 + 38.5 = 90.9

Bruce F.  -  Well said.

Brian F. is a liar.  He is either a Republican plant or a racist or both.  No business owner would wait years to expand there business for the reasons he suggests.  Moreover his reasons are not only but false Republican talking points.

When we see these statistics it should explain why middle class Americans can’t afford to send their children to college or pay their mortgages even after they have added a second wage-earner. Remember that middle class income has failed to keep pace even though many families have added a second wage-earner.

But that is only half the picture. The rest of the picture would show how tax cuts to the wealthy have deprived our government of the revenue necessary to fund education at all levels. This has taken college education out of reach for the middle class and poor and further reduced the quality of K-12 education.

Bruce- Interesting economics. I wonder what kind of investing environment there will be in five years if our present problems aren’t addressed. Do you think this economy could survive, say, even two years without proper levels of employment and investment? This is not 1979. I imagine if all investors had your point of view, and they don’t because they understand what is at stake, they would not be in a situation to “rest and reflect”. Any real financial player knows this is not possible.


Perhaps you should take the time to read what I said rather than knee-jerk your response.

I was talking about new business formation.  I am an investor in new businesses.

I am an independent who cares very little about politics.  The Clinton years were the most remarkable period of my business lifetime bar none.  The irony is that Obama simply needs a few adults around like Clinton chose to have Robert Rubin.  Yes Rubin worked at Goldman and yes Rubin worked at Citigroup but the business environment during the Clinton years were the stuff that businessmen and businesswomen dream of…..

As for today’s business owners like myself.  We are functioning day to day but we are not seeing any increases in sales that would trigger the need for more employees.  A friend of mine who is a supplier to Apple Computer is doing great right now but has decided to do a layoff at year end in order to get ready for what his consultants tell him will be a very negative outcome from healthcare reform.  He offers great insurance to his employees so he either had to cutback coverage or layoff 8% of his workforce…. he decided to maintain coverage although he may find no choice a year from now if premiums keep going up… his went up 13%.

John,  this is real world stuff.  The republicans are absolutely full of it when they say to lower taxes for the job creators.  I don’t need lower taxes.  I need demand!!!!  Furthermore, that message is so stale and it may have worked when Kennedy cut taxes in the early 1960s and when Reagan cut taxes in the early 1980s but tax rates are low enough that people like me do not care about tax rates…. give me demand… give me a healthy economy with more people working….

But that cannot happen when a president is so visceral in his hatred of American business.  I don’t like Obama and I sure wish Hillary had won in 2008.  I think things would be bad but I think she has the ability to inspire the private sector instead of trying to rip this country apart ala Obama.

I apologize.  I misunderstood your position.
The economy tanked because of the Bush tax cuts, unpaid for wars, and credit default swaps, collateralized debt obligations, collaterized loan obligations, mortgage backed securities all of the latter given kudos by Moodys, Standard and Poors and Fitch.  Obama inherited this.  He has done nothing to hurt business.  It is a myth that he has.  The reason you would be foolish to invest now, unless you have a great new idea, is that money has been sucked out of our economy, mostly from the so-called middle class. Therefore most people don’t have money to buy alot of stuff.

Someone is blaming people for not going to college? I have a B.A. and an M.A. My husband has a B.A.

I worked in the corporate world then started and ran my own business before choosing to be a stay-at-home mom. Shortly thereafter, I had my first bout of cancer. Over the years, three more chronic conditions have altered my plans for the future (no, none of them came from smoking, overeating or anything I did). So I work several part-time jobs, mostly in my field, but a retail job, as well.

My husband’s job was eliminated nearly two years ago. Who’s hiring people in their 50s? Our health insurance and unemployment benefits have expired. I impulsively bought an ice cream for $2.99 yesterday and am suffering financial guilt today.

That’s how it happens, folks. Gloria Steinem used to say that most women are one man away from poverty. Today, most people are one pink slip away from poverty.

Looking forward to your thoughts.

Too many people do not begin to understand your suffering and the millions of others suffering like you. I hope that the politicians of this nation will start talking about people like you instead of cutting taxes, balancing the budget,  and laying off more people.

Hi Heather,

Thanks for pointing that out. The 81st-99th percentiles had 38.6% of income in 2007, not 28.6%. We’re correcting that now.


I don’t begrudge Bill Gates for his wealth.  He created an entirely new business which in turn has revolutionized marketing, information access, etc.

The problem is not with people like Gates - it is with the people who manipulate the money markets for profit.  It is a gamblers’ creation, which when they lose we all lose.  These are the people who are funding the Republiklan Party and too many Democrats.

Any politician who states that “tax increases are off the table” are playing into the hands of wannabe traitors.

The government is not a business, it is a service.  It is not intended to be a profit-making organization.  Its services are paid for with taxes.  Any elected politician who has signed the “No new taxes” pledge are in violation of their oath of office and should be run out of office at the next election.

Regardless of the politics of today this nation is in for a long slog through the muck.  I think a political leader that leads instead of attacks can make a difference on the edges.  I think most businesses have cut all the jobs they felt the need to cut.  Banks have a long way to go though because regulatory changes are changing their business model and they too will need fewer workers.

The whole tax debate is nothing more than a sideshow.  Anyone following it knows a reality.  If you go back to the Clinton-era tax rates you raise $900B over ten years.  So say $90B/year.  Last year’s budget deficit is $1.3T.  OK, go ahead and get those higher tax rates and forget the politics and forget any discussion of potential economic impact of higher taxes.  Once you get those taxes and you are able to reduce the deficit from $1.3T to $1.2T….... now what?  What is next to reduce the deficit.  This whole tax thing is a fiasco keeping all of us back biting each other while we lose focus on the big picture.  We have enormous deficits and we know what we need to do LONG TERM to reduce the baseline growth of social security, medicare, and medicaid….. so let’s get at it instead of this endless fighting over the sideshow of higher taxes.

I wish we could get to December 2012 so the Bush era tax cuts expire and let’s move on.  True they expire for the middle class too but we also must accept that we cannot live in a nation where 45% of us pay zero income taxes.  Those who argue that people are paying social security and medicare taxes….. that is social insurance that everyone who lives to 62 or 65 derives great benefit from someday.  EVERYONE must have skin in the income tax game and pay income taxes too.

clarence swinney

Nov. 3, 2011, 2:34 p.m.

Since 1980 great increase in wealth and income
10% OWN 70% NET WEALTH       80% OWN 15%
70.15 70/7 50/13   190/35 IS INEQUALITY


Clarece Swinney’s comment could qualify as “skin in the game” already paid by some n% of people. With as much growth and per capita income increase but no increase in real wages for n% in thirty years, that could be seen as the only “skin in the game”.

Daniel Breitbach

Nov. 3, 2011, 3:43 p.m.

Okay, so let me get this straight. Since 1980 we’ve seen the gap between the rich & the poor increase exponentially under mostly republican leadership. Yet this so called businessman is trying to sell me on the idea that so far, that has worked out good for all of America? Go sell someone else your pretzel logic buddy! I also like how you indicate that you’re going to sit back and relax, until someone you like, who serves only Hi, Nani Treat from the title company emailed us about the Sumitomo loan. She’s trying to find out who the title company was during the refi. Could you give her a call?you’re interests gets into office. I bet you have “united we stand” bumper stickers plastered all over your car!

Bruce F,
I’m wondering if you can give some examples of Obama’s visceral hatred of American business?  The reason I ask is because your comments are so pleasantly rational and even derogatory regarding Republican rhetoric and then you throw that in, or the “skin in the game” comment.  These departures from your rational arguments all reek of right wing racist/classicist dogma.  I would also argue that these comments are all antithetical to your “poor kid makes good” background story, so either your misleading us about your background or you have forgotten or worse forsaken your roots.  I would like to know what Obama is doing that leads to your opinion and how much “skin ” you think a single widowed mother, or a vet on welfare, or an unemployed factory worker ought to “put in the game.”

Barry Schmittou

Nov. 3, 2011, 4:01 p.m.

Hi Leslie,

I’m sorry to hear about your cancer and medical problems and your husbands job loss and your lack of health insurance.

I don’t think those with health insurance understand how bad and unreal it feels to have health problems and no insurance.

The U.S. government and wealthy businesses are so corrupt, if you did have insurance through your employer there is a significant possibility you would have been fired when you became sick.

I had just received a commendable performance evaluation and a raise, but I was fired four days after my manager received my medical records that indicated a potential eye cancer that is seen in the x-rays viewed by pasting

This is standard practice for many corporations.

Making matters worse, quotes from Numerous Federal Court Judges prove wealthy insurance Company Doctors’ ignore life threatening medical conditions including Brain lesions and Multiple Sclerosis, cardiac conditions of many patients, and a foot that a new mother broke in 5 places.

The Judges quotes can be seen by pasting :

Multiple insurance companies are also committing identical crimes and endangering lives in five different types of insurance while Obama and Bush protected them, as seen by pasting :

Leslie, I believe we should try to stop the corruption, but I have seen so much I believe our only real hope is in God because every where we turn the so many laws have been turned upside down.

I hope and pray God has and will comfort you through this and help you get good health and good insurance, economic stability and everything you need.

I hope its okay that I humbly say that as part of my response to you writing “Looking forward to your thoughts”

The treason blog shown above has a quotes from four Professor’s including Joseph Belth, Professor Emeritus for Insurance at Indiana University who wrote :

“They’ve turned Erisa on its head,”  “It was supposed to protect employees, and it’s being used to protect insurers.”

Here are quotes from Aaron Doyle, a professor of sociology and criminology at Carleton :

“What those numbers don’t measure is the trauma survivors like Jane Pierce face when wrongfully denied”

I believe all of the corporate crimes being enabled by the U.S. Government leaders are very intricate and organized. Here’s a few examples, and I hope citizens will contact everyone they can and help get a Grand Jury to indict Obama and his Director’s for protecting Wachovia banks laundering of $378 billion for murderous drug cartels, and multiple corporate crimes Obama and Bush have protected as seen by pasting :

Bank of America, American Express Bank International and Western Union also laundered drug money and no one was prosecuted.

AIG, JP Morgan Chase, MetLife, Prudential, Unum, rigged huge bids and no one was prosecuted!!

This motion was filed in Federal Court on 9/13/11 but Judge Trauger would not appoint a Special prosecutor as I requested.

I respect those who do not believe the overwhelming evidence of corruption is of Biblical proportions. For those who think it is the Bible has many quotes about seeking justice including Psalm 82:3 :

“Give justice to the weak and the fatherless; maintain the right of the afflicted and the destitute.”

Barry- In future comments would you please quote the Bible in the first line so I don’t have to waste my time reading the rest of your post. Thanks a bunch. God bless.

We cannot live in a country where 45% of all taxpayers are not paying any federal income taxes and therefore more than willing to vote higher taxes upon others.  We can all come up with sorry stories about someone who cannot afford to pay income taxes.  Those people are being partially taken care of by the EIC.

But the Bush tax cuts have exempted families with children via the child credit.  There are a good number of people who end up paying no taxes because of Bush era tax credits included in the Bush tax cuts.  That will all go away in DEC 2012 so that there will be a lower percentage of taxpayers who pay zero and that is a good and fair thing.

Obama’s hatred of American business is so easy to see and understand from this perspective.  He equates bankers, wall street, the industries where the monied elites use other people’s money to make money with millionaires and billionaires.

Obama ignores the fact that he is simultaneously hammering upon hundreds of thousands of successful business people who do not make a living using other people’s money to make money.  They sell a good or a service of value… they work hard, pay taxes at the highest rates because they do not have fancy pants tax accountants and lawyers that can finagle like mega business in America.  They wake up every day and deal with the pressures of generating another day’s revenues so they can keep their eimployees working.

Obama has poisoned the well of all American business.  I know this because in the world I circulate in which is comprised of many very successful small businesses there is an almost universal “I give up on Obama” attitude.  They are tired of being attacked for simply achieving great success in America.

It is sickening to see Obama equate himself with millionaires.  All this man has done is write a book about an absentee father and he thinks his arrival at millionaire status and his willingness to pay higher taxes should be a universal theme among ALL millionaires?  Mr. Obama, you have never worked as hard as people who don’t have the celebrity status to write a best seller about an absentee father.  You have NEVER met a payroll in your entire life.  You have NEVER had to fight for market share in any business structure in your entire life.  You have become a millionaire in a much easier way than 99% of all millionaires out there so equating yourself with these millionaires is both insulting and condescending.

As for my roots.  My dad was a member of Teamsters Local 856 and he worked for my grandfather’s business all of his adult life.  How dare you suggest who has forgotten what…. that is another way to suggest that people who have achieved success have somehow become disconnected from the rest of the population. 

We don’t all live behind gated communities and we are not all disconnected from reality.  I do my own grocery shopping and I certainly take note that almost every time I am in line one or more people are using food stamps.  In all my years I do not recall seeing food stamp usage this high and is confirmed by many news reports including today’s report on rising poverty in America.

You should be very careful because people who have achieved success and have money have an interest in knowing exactly what is going on for the sake of their own savings and investments.  It is in everyone’s interest to see this economy working for everybody.

I started my career in the early 1980s when unemployment was over 10%.  The difference this time is that housing having brought us down leaves hundreds of thousands of people who become unemployed and would normally get the spark of entrepreneurship frozen because they have no home equity to borrow from in order to start a business.  That is one major reason why this is so different this time.

It is frustrating to read some of these posts, not all but some which seem like walking, talking, generalities written by one of the political parties or the other.  It will not be either political party that brings us out of this mess.  It will be all of us when we reach some point in the future when renters decide they finally prefer home ownership again.  Look for that and that will be our new beginning….. it happened in late 1984 after housing took a fall during the early 1980s recession and as cycles go it will happen again.

Barry Schmittou

Nov. 3, 2011, 4:47 p.m.

Ivan with no last name,

You could have easily scrolled past my comment.

It does not seem to matter when I mention God, or how I present the evidence, I occasionally receive complaints from people like you, many of whom post using no last name, and who may be one person using multiple screen names.

( I have received thank you comments from real people who use their last names)

I believe the agenda of the complaints is to diminish from my evidence that Obama protects organized criminals, and so did Bush.

While complaining about my posts they never mention the extreme destruction of lives caused by Obama and Bush protecting MetLife and other wealthy insurance Companies Doctors’ who ignore life threatening medical conditions including Brain lesions and Multiple Sclerosis, cardiac conditions of many patients, and a foot that a new mother broke in 5 places.

The complainers never mention Obama and his Director’s protecting Wachovia banks laundering of $378 billion for murderous drug cartels, and multiple corporate crimes Obama and Bush have protected as seen by pasting the websites listed above including :

As many have said, everyone has to pay their fair share. If you have succeeded in this country and are well off, you should be willing to give more of what you earn as a give back to a) the country, and b) those less fortunate. Some people just don’t get it though. They have the attitude “i’ve got mine, screw you until you can figure out how to get yours” (A paraphrase of a presidential candidate).
There needs to be a not only a flat tax system put in place, but if all the loopholes and deductions are left in place, there needs to be a minimum tax floor as well. Something where even with the high priced CPA’s and Tax Attorneys, corporations will have to pay at least 10% to 15% of revenues. (Remember; “corporations are people” too!).
When I say everyone, I mean everyone must pay. Even the folks making under $50,000 need to pay at least 1% or 2% in taxes as a minimum. They use the roads, they are protected by our military too. We all need to pay our share of taxes.
We also need to demand that our tax money be accounted for. We as citizens and payers of tax in this country should be given access to federal, state and city expenditures online on a quarterly and annual basis. One idea to keep an eye on expenditures would be to force CPA’s, as a condition of their licensing, to donate X amount of time on a monthly basis to audit government books on a particular government level.
On our side, we all have to start taking responsibility for our own finacial situations. We need to learn how to budget, how to save up for items rather than putting them on credit and winding up paying 30% more for items after interest is added. And we need to Learn to Manage Credit in a way that when there are bargains out there, (like recent sub 4% thirty year mortgages) we can refinance or buy on credit and get the best interest rates possible. Self discipline with regards to personal finances (frugality and thriftyness) and not keeping up with the jonses is in order during these economic times.

In my prior life before becoming a businessman I was a CPA and still hold license.  Very few of us have the specialized accounting skills to do fund accounting which is how governmental agencies do their accounting so the idea of contingent licensing of every CPA on donated time would not be possible or realistic.

I suppose we could come up with some form of mandatory service for everyone who has to be licensed in any profession.  Seems terribly unfair.

We will never have a flat tax because it is the source of politician’s power.  Don’t believe for one minute the republicans want a flat tax… they want a talking point and I will remind all of you that republicans held power in congress and the white house and no flat tax was ever offered even though it has been the subject of every republican campaign in my lifetime.  This is yet another example of politicians playing the people for fools in order to raise campaign contributions.

Without the ability to manipulate the tax code, who in their right mind would bother to contribute much beyond chump, spare change to these fools?

Barry- Ivan is my whole legal name, like Sting or Cher. I rather like it. Insert any last name you like, because anyone can do that, there is no way to know if anyones name is their true identity. I believe your real last name is Schmittou only because no one would make that up. I was helping you get your message out by telling you that you lose credibility when you bring the bible into this kind of discussion. Anyway, you are taking away from my real response to someone who is writing thoughtful comments like Bruce F.

Bruce- As a CPA I’m sure you can appreciate the discrepancy in earnings between labour and business in our economy relative to earnings and GDP over the last 30 years. You are on the business side, but equally important to the economy as a whole, yes you too, is the labour side.

Barry Schmittou

Nov. 3, 2011, 5:56 p.m.

Hi Ivan,

I respect yours and everyones right to their beliefs.

I believe there is so much evidence of evil the Bible is the most credible part of this discussion.

Ephesians 6;12 mentions wickedness in high places, and I do not see how there can be so many intricate and complex crimes being committed repeatedly world wide unless this is biblical in proportion.

Additionally, the evidence I’ve posted above (including Obama’s failure to prosecute anyone at Wachovia for laundering $378 billion for murderous cartels) is still valid whether you believe in the Bible or not. I hope people of all faiths and non believers will work together to try to stop the destruction of our world.

Pure & simple: the rich grew richer on the backs of those working for them or they fired them or worse, didn’t hire them at all, they went to other countries like India so they could pay a computer programmer $5,000/yr instead of an American like me for $40,000/yr. Then I went to college to get a degree instead, got a Bachelor’s degree to teach children, and mostly substitute taught for about $10,000/yr. I either have to go back to school to learn another trade because substitute teachers don’t get CPDUs to get a standard teaching certificate after the initial four year certification, which I did and am unhirable because technology is making that job obsolete. I have had a horrible ten years since the Bush recession of the early 2000s, which is just when the 1% really high income earners have had their increase reach above $1,000,000. That’s a serious increase of an outlier in data distribution, no wonder Occupy Wall Street is picking up steam. And I think these Oakland riots at night are being caused by people who stand to lose the most, the rich, who are they paying to cause fires? Burning down a homeless shelter, sounds like Nero burning the slums of Rome and blaming the Christians to me. Just my suspicion, I look for motive. Why don’t the rich hire more?

It’s shameful that the poorest fifth have made essentially no gains, and, in fact, because of inflation, are poorer now than in the 1980s.

I think Warren Buffett has the right idea…enact a law that no legislator can run for reelection unless the budget is balanced within 3%.
G. W. Bush turned a three trillion dollar overage into a thirteen trillion dollar deficit, a great deal of which probably went into banks in the Cayman islands. It didn’t come back into the economy to create American jobs and wealth, that’s for sure.
Our current economy is a reflection of the outcome of Reaganomics (which my accountant called “The Certified Public Accountants Economic Recovery Act of 1986.”) Trickle down economics? Really!!! It has never worked, and never will.
Are we really so obtuse that we pay more attention to the smoke and mirrors than to the history which got us where we are?

G 20 meetings, job plans etc. will be unfruitful and waste of time unless ‘in order just to compete with the East in deficit free trade condition’, we start to abolishing trade Unions ASAP and let less-educated lower middle class and the immigrant cheap labor @ minimum wages work in the oil sand-fields, aircraft, machinery, tools etc. factories, constructions sector etc..
The boom of China, India, Brazil etc. will be confined in their own homelands only.
No Union, Minimum wages and Balanced trades are must but the main problem is these drastic changes are not good for elections matters of G 20 leaders.


The problem with using “annual” measures?  They don’t reflect the sudden and severe impact of industries - like Big Oil and the speculators in those markets - that can levy random and ferocious private taxes.  Instead those surges get “averaged” out…by the time the year-end CPI used to calculate inflation in these inequality studies is arrived at, the year might not have been so bad “on average”.

But a family living paycheck-to-paycheck doesn’t have a buffer to absorb the private taxes Corporate America and Wall Street levy…I’d like to see charts that gave a running account of daily survival needs vs. daily income.  I.e., “What you must earn in income to survive in America today.” vs. “What people actually earned in America today.”

I think you would learn a lot about the quality of life in the lower quintiles - and the amount of greed in the upper quintile - just by seeing how many times those lines intersected in the lower quintiles.

Particularly since the only people for whom income soars to adjust for those private taxes are the people levying those private taxes.

By the way:  Quite the puff piece…announce that income inequality is increasing and economic mobility is decreasing, and then pretty it up with an example of the way things used to be.

Why run the piece at all, if you were going to ice it with B.S.???

loll…click on the blue word “disposable” (as in disposable income, which really just means “after tax income” and not “hey, so extra it’s disposable!”) that is a feature of many of the above charts.  I think you’ll get a kick out of the closing paragraph accompanying the definition it takes you to:

“In 2005, the average disposable personal income dipped into negative territory for the first time since 1933. This means that in 2005, Americans were spending their entire DPI and then tapping into debt for further spending.”

I.e., the article accompanying this data is “Oh, it’s not so bad; in fact, it’s great!”...but the careful arrangement of the data accompanied by an equal amount of care in composing the conclusions the reader is expected to reach suggests that it is actually far worse than you are intended to perceive.

And, to leave on a “bright” note:

If you look at the chart on page 1 (their numbering system) of this OECD report:

you’ll see that our income inequality is still better than Portugal’s, Lathvia’s, Turkey’s, and (obviously) Mexico’s.  But I do find being 4th worst of some 38 countries to be…a bad sign. 

A bad portent, even; particularly in light of the fact that many of those countries have histories of royalty - of kings and queens - who took it upon themselves to ensure income inequality.  Now it seems that they are moving away from such disparity while we - the nation founded upon the principle that all men are created equal - seem determined to create our own royalty at the expense of democracy and the dreams of our Founding Fathers.

Sheesh…ok, we’re only 5th worst in most of the West and much of the East.

I can’t stand it…consider the accompanying chart “Disposable personal income per capita:”...looks pretty good, doesn’t it?  We’re friggin’ rolling in dough, aren’t we?

‘Cept “per capita” means “for each person”; ostensibly that chart is a measure of the total after tax income across the United States divided by the </i>total</i> number of people in the United States.

lolll…did your two year-old haul in $33,125.00 in 2010?

Is all in how you portray the numbers…somebody made all of that income that could then be averaged out to encompass the existence of your baby - but it sure as hel…heck wasn’t your baby, was it?

Bruce F,

My brother-in-law is a self made millionaire.  He and his wife have worked hard, long hours for what they have and their income today places them in the 1% category.  They also see the world from your lens and are angry at the prospect of paying more in taxes.  They view their employees as lazy, pay them next to nothing, and wonder why they are unwilling to work as hard as them.

I have seen that statistic that 45% of all taxpayers are not paying any federal income taxes, and I am unsure how accurate that is.  But with 9% unemployment, and another 16% underemployed in either part-time jobs or jobs that pay much less than their previous salary, it is not hard to see why that figure might be accurate, especially when you add in retirees on social security.

I agree with you that we have a problem.  But unlike you and my brother-in-law, I am willing to pay taxes to support those people and I view them with compassion.  I know there are some deadbeats out there, but that I believe the vast majority of them are people who want to work and pay taxes.

What causes some people like my brother-in-law to view their fellow human beings as largely dishonest cheaters and people like me to view them as unfortunate victims.  I wonder if it is simply that scheming people see everyone else as scheming?

Tony C.

I never said I was angry about paying more taxes.  I said that it is time to raise taxes to the Clinton-era rates so that we can get beyond this populist debate on taxes and get to the real problem which is middle class entitlements.

Again, Clinton era tax rates will raise approximately $900B or $90B per year.  Last year’s deficit was $1.3T.  With the tax increases the deficit would have been $1.2T although there is always that debate about the impact of taxes lowering economic growth meaning perhaps the deficit would have been higher than $1.3T last year.  Let’s forget that nonsense and as Obama says stick to the numbers.  You have Clinton era rates back and last year’s deficit would be reduced from $1.3T to $1.2T…. NOW WHAT?

No matter how many ways you want to slice the salami it comes down to middle class entitlements and/or more taxes on the middle class in order to pay for middle class entitlements.

I can’t speak to your brother-in-law but there is no such thing as a self made millionaire.  The sum total of our life experiences gave some of us the skill set to achieve that status.  My mother taught me how wall street works.  My teachers all taught me something important that gives them the right to claim some credit.  Running mulitple paper routes as a kid taught me how to run a business and keep after people who refused to pay the paperboy the first, second, time he came around for collection.  My dad taught me to always pay everyone else first and pay yourself last including regular contributions to savings.

I am old enough that I went to junior college at no cost other than books and my quarterly student ID card.  No tuition, no parking, no lengthy list of fees.  I have always been grateful for that and I am always reminded of that significant investment the people of California put into me and I certainly paid back on that investment many times over if you assume the state took an abiding interest by giving me the education that gave me another piece of the puzzle that led to my success.

Anyone who says they are self made are being silly

Liberal minded folks looking at today’s media messages assume that rich people are staying up day and night fretting over tax increases.  I dare say most rich get up and go to work and function and live with the tax levels as determined by the political class.  If taxes go up I have less to spend or I have less to save or I have less to invest. ...... so I spend less or I save less or I invest less….. end of story. 

I don’t think it is a good idea to raise taxes during hard economic times.  Herbert Hoover lamented doing so years later looking back on his presidency.  Franklin Roosevelt sent the economy into double-dip in 1937.  Deep down.  I don’t think Obama really wants to raise taxes right now and is simply peddling a populist campaign message.  I think if the republicans said to Obama if you think it is a good idea to raise taxes then let’s do it right now and you take the lead Mr. President I think Obama would fall away from raising taxes and say no no no not now but later.

These stereotypical assertions that rich people don’t care and they don’t want to pay taxes ignore the philanthropy of the super rich.  Ken Langone has done more for the medical community in NYC than any other man ever.  Buffett and Gates are willing to leave most of their fortunes to charitable trusts rather than pay federal estate taxes.  Does that make them evil rich?  Should they leave their entire fortunes to the US government that would consume those fortunes in weeks after their deaths or leave the money to charities that can go on for generations after their passing?

I dare say the Steve Jobs of this world have created so many jobs and paid so much in taxes they deserve our respect and we should be thankful to them.  At some point we have to get back to the idea of America which is anyone can indeed realize their American Dream be it wealth or power or whatever and our government is supposed to take what it truly needs and reasonably regulates but otherwise keeps a low profile.

Some good comments here.  I, too, know a lot of people, who earn good money but pay their employees lousy wages.  Some people are in dire need and work for anything because there is no choice anymore.
People don’t complain for fear of being cut to one hour per week, they need their job.  Clinton was a lousy president if people only knew he raided the pension funds and the CEOs of the largest corporations paid themselves lavish salaries and bonuses and the decline started, and he dipped into Social Security, 2 trillion is owed, to balance his budget then.  But people say he was a good president, ignorant of these facts.  You call it “entitlements” but when it comes to the savings & loan mess and the bank mess, why is it that the little tax payer has to stand still and get raped and the CEOs once again cash in with huge bonuses?  Amazing.

For Bruce F:  Apparently, you are unaware that back in 1985 we raised the contribution to social security due to the onslaught of retiring babyboomers.  We overpaid SS for 10 long years and the fund was prepared only the government dipped in and spent the money for their pet projects and now have the audacity to claim that SS is broke.

Viola, not only did we increase the rate but the wage base was increased each year based upon changes in wages so that the politicians had even more to borrow since 1985.

Both parties have been using social security surpluses for their political ends long before 1985.  Richard Nixon and Wilbur Mills, two politicians in deep dew dew put COLA into social security payments in the 1970s.  However noble anyone thinks that it is social security became an even bigger mess once COLA was introduced.

We can rehash history and bicker politically or we can look at the numbers.  We don’t have to hurt today’s retirees if we make the right adjustments to the social security system.  As a nation, if we had politicial leaders that were respected by the people they could ask all of us to save more of our own money during our working lifetimes so we become less reliant on social security.  Our people need to learn basic finance including the power of compounding in order to better take care of themselves.  But, the fact is that anyone with an interest in getting you to spend your money does not want that message to be conveyed in our school system.

Harry Reid and democrats constantly state that social security is accuarialy sound…. the fact is there is over $2T of special treasury securities that represents social security and will be cashed in by raising taxes on future generations.  At some point, some generation has to step up and call out the Harry Reids and demand they tell the truth about their profligate spending of social security trust fund money.  If you did this in the private sector you go to jail.  In congress, it is a means to your re-election.

Ecletic Observer

Nov. 4, 2011, 11:16 a.m.

A consequence of failure of national income growth to be more equitabiy distributed is that consumption, which drives business to expand and hire. has to come at the price of a decreased consumer savings rate.  This has the consequence of increased leverage and risk in the economy.  Eventually America will not be able to rely on domestic consumption; for growth because if we don’t earn it we can’t buy it since we can only borrow so much or leverage our equity so much (as we did in the illusory way of the housing bubble).

White Collar jobs used to be not particulary subject to downturns the way blue collar jobs were or at least to the same degree.

However, what we’ve seen is the attrition in those jobs as well. If growth in an of itself or productivity gains don’t lead to shared prosperity, what does that say about our economic bargain?

Get Updates

Our Hottest Stories