Home > Political Economy > 25 graphics showing upward redistribution of income and wealth in USA since 1979

25 graphics showing upward redistribution of income and wealth in USA since 1979

February 25, 2011 Leave a comment Go to comments

from David Ruccio

I assemble a presentation on inequality on a regular basis for my Principles of Microeconomics course. Here are links to the latest one, from Fall 2010, as a pdf document, a Powerpoint presentation, and a Quicktime movie.

The following are some other representations of inequality (please feel free to send me additional ones):

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Categories: Political Economy
  1. merijnknibbe
    February 25, 2011 at 12:39 pm | #1
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    I encountered this one: consumption inequality largely mirrors income inequality in the USA

    http://www.nber.org/papers/w16807.pdf?new_window=1

  2. Dave Raithel
    February 25, 2011 at 2:43 pm | #2
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    I just finished listening/watching the American Petroleum Institute chief economist spiel the party line on C-SPAN…

    So the most interesting graphic I find above is the Norton/Ariely bar graphs on actual, perceived, and desired distributions of wealth. There’s a wealth (no pun intended) of information beneath that about false consciousness, cognitive dissonance, and aspirations to meritocracy. It’s evidence that people do understand the point Engles had to repeat: Class struggle is not about eliminating the differences between people, it is about eliminating the differences between classes.

    Good stuff all the above.

  3. Stephan
    February 25, 2011 at 2:58 pm | #3
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    A somehow related graph on the reason why there’s inequality:

    http://lbo-news.com/2010/08/18/strike-wave/

    • Dave Raithel
      February 25, 2011 at 5:10 pm | #4
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      Now THAT is interesting. Suppose a gifted number-cruncher could do the regression analysis showing the decline of organized labor IS the most reliable predictor of widening distribution of wealth in the US. Would American workers believe it? One of the more unsettling things I heard yesterday on C-SPAN (I usually start my day there) were call-ins from people claiming to be PRIVATE sector union members opposed to PUBLIC sector unions – they were on Walker’s side. Could have been Republican shills telling lies (always a real possibility), or truly people who don’t know how much of the kool-aid they’ve already drank?

    • merijnknibbe
      February 26, 2011 at 8:18 pm | #5
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      The number of strikes declined amazingly after 1981. What happened? According to A. Greenspan:

      “In 2003, Federal Reserve Chairman Alan Greenspan, speaking on the legacy of Ronald Reagan,[10] noted:

      Perhaps the most important, and then highly controversial, domestic initiative was the firing of the air traffic controllers in August 1981. The President invoked the law that striking government employees forfeit their jobs, an action that unsettled those who cynically believed no President would ever uphold that law. President Reagan prevailed, as you know, but far more importantly his action gave weight to the legal right of private employers, previously not fully exercised, to use their own discretion to both hire and discharge workers”

      http://en.wikipedia.org/wiki/Air_traffic_controllers%27_strike_of_1981#August_1981_strike

      • Stephan
        February 27, 2011 at 5:14 pm | #6
        Quote

        Maybe you are right. I’m always skeptical if I hear a “Reagan” argument. For me Reagan was one of the greatest opportunist I’m aware off. Basically with Reagan you can argue for any policy you like or dislike. Easy to turn your argument on it’s head. Nope Merijn. Ronald Reagan was a staunch supporter of unions and collective bargaining:

        Ever since martial law was brutally imposed last December, Polish authorities have been assuring the world that they’re interested in a genuine reconciliation with the Polish people. But the Polish regime’s action yesterday reveals the hollowness of its promises. By outlawing Solidarity, a free trade organization to which an overwhelming majority of Polish workers and farmers belong, they have made it clear that they never had any intention of restoring one of the most elemental human rights—the right to belong to a free trade union …

        My Saint Patron Ronny was a big fan of Solidarnosc ;-) I think there are several reasons for the decline of unions. One among them: mainstream microeconomics. The narrative of textbooks is straight forward: First students learn that monopolies are evil. Then atomistic employers are introduced in an epic competition with other atoms for employees in the labour market. But the supply side of this unique resource labour might put in place an evil monopoly: labour unions. This is not good!

  4. Jorge Buzaglo
    February 25, 2011 at 4:34 pm | #7
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    Very interesting on economic inequality among classes in the US: the income share of the capitalist class has doubled since the 1980’s (Marx’s “degree of exploitation” has doubled). Source: Wolff, E.N. y Zacharias, A. (2007) “Class Structure and Economic Inequality,” Levy Economics Institute Working Paper No. 487.

  5. Jorge Buzaglo
    February 27, 2011 at 3:14 pm | #8
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    I should have written: ” Marx’s ‘degree of exploitation’ has more than doubled.” The numerator has doubled, and the denominator simultaneously increased.

  6. Jorge Buzaglo
    February 27, 2011 at 3:15 pm | #9
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    Sorry: the denominator simultaneously decreased.

  7. Rita Addessa
    February 27, 2011 at 4:24 pm | #10
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    David Ruccio, what superb work. Thank you.

  8. merijnknibbe
    February 27, 2011 at 8:30 pm | #11
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    @Stephan,

    as far as I can say from this side of the Atlantic, I fully agree with you on Reagan and micro economics – and at the time it surely was not a ‘masterplan’ or something like that. But the Greenspan quote is remarkable, to me, as it illustrates how one of the most powerfull economists ever thought about labor on one side and management on the other side. It’s worthwhile to quote more of the Greenspan speech, with present unemployment and the ruccio graphhs in mind … (the style of the speech is quite hagiographic, but that only underscores Greenspans intentions) (thanks to ‘Anne’ on economist’s View):

    “April 9, 2003

    The Reagan Legacy

    My predecessor at the Federal Reserve, Paul Volcker, embarked in the fall of 1979 on an aggressive monetary tightening that attempted to arrest a dangerously accumulating set of inflationary forces. Presidential candidate Reagan also perceived inflation as a danger, and, then as President, afforded Volcker the political support that is so essential to a central bank when its pursuit of long-term stability risks some worsening in near-term economic activity. That support began the process that has led today to the virtual elimination of inflation from the U.S. economy.

    A second key support to today’s flexible markets has been the bipartisan deregulation initiatives that began in the Ford and Carter years and were extended by Ronald Reagan. In January 1981, disregarding warnings that the action might renew upward pressures on inflation, President Reagan dismantled the remaining controls that had debilitated our oil markets. By 1986, crude oil prices had reached their lowest levels in real terms since 1973. Deregulation in finance, trade, and transportation was pressed forward.

    But perhaps the most important, and then highly controversial, domestic initiative was the firing of the air traffic controllers in August 1981. The President invoked the law that striking government employees forfeit their jobs, an action that unsettled those who cynically believed no President would ever uphold that law. President Reagan prevailed, as you know, but far more importantly his action gave weight to the legal right of private employers, previously not fully exercised, to use their own discretion to both hire and discharge workers. There was great consternation among those who feared that an increased ability to lay off workers would raise the level of unemployment and amplify the sense of job insecurity.

    It turned out that with greater freedom to fire, the risks of hiring declined. This increased flexibility contributed to the ability of the economy to operate with both low unemployment and low inflation. Whether the average level of job insecurity has risen is difficult to judge, but, if so, some offset to that concern should come from a diminished long-term average unemployment rate.

    The notion that lowering barriers to discharging workers reduces the long-term unemployment rate has gained widespread acceptance even beyond our shores. The European Council, meeting in Brussels last month, urged member states to “maintain the momentum of reform of national labor markets” by among other things, “relaxing overly restrictive elements that affect labor market dynamics.” That is not the way that Ronald Reagan would have put it, but analytically it is moving in a Reagan direction…. I am pleased to see a re-emergence of market value placed on trust and personal reputation governing business practice. Moreover, after the revelations of corporate malfeasance, the market punished the stock prices of those corporations whose past behaviors cast doubt on the reliability of their reputations. I hope and anticipate that trust and integrity again will be amply rewarded in the marketplace as they were in earlier generations”

    How wrong can you be!

  9. Fred Sayre
    October 13, 2012 at 6:23 pm | #12
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    Reagan started the deregulation prosseses that were seized by those politians that followed and were undeniabley the cause of our DEPRESSION. Citizens United vs Federal gave corporate America the tool needed for control of voting ads via SuperPacs i.e.money.
    This plus ALEC’s secret meetings between invited corporate CEOs and different state legislators to draft bills in their state legislatures that benefit them, attack public employees and labor unions and denying legitimate citizens of color, the poor and seniors their right to vote because they have no picture ID from the government is very close to subversion of a democratic form of legislation.
    I suggest you go to Center for Media and Democracy on the internet and look at some 860 draft bills smuggled out of one of ALEC’s meetings. As a side note the Koch brothers back ALEC.

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