Home > income redistribution > A one-chart summary of changes in United States income distribution from 1913 to 2012

A one-chart summary of changes in United States income distribution from 1913 to 2012

from David Ruccio

Bui

Here, in one chart (by Quoctrung Bui), is a summary of changes in the distribution of income from the early-twentieth century (1913) to the present (2012) in the United States. 

The story is, grosso modo, one of declining inequality until the late-1970s (with average incomes of the bottom 90 percent growing much faster than those of the top 1 percent) and growing inequality thereafter (with stagnant incomes of the bottom 90 percent and huge gains at the top).

We can also see that sharp right turn by calculating the 1:90 ratio (the ratio of average incomes of the top 1 percent to the average incomes of the bottom 90 percent, both including capital gains and expressed in 2013 dollars). They are:

1917: 26.8*

1943: 16.6

1973: 12.4

2013: 35.36

As Bui explains,

In theory, it should be possible for incomes to rise for everyone at the same time — for the gains of economic growth to be broadly distributed year after year. But the takeaway from these graphs is that since World War II, that’s never really happened in the U.S.

Bui’s chart is basically a summary of the information contained in these two charts (from the World Top-Incomes Database):

chart copy chart

 

  1. April 21, 2015 at 5:20 pm

    The real concern is to derive different mechanisms by which our slogan to reduce such disparity will work. Otherwise now we are moving close to a decade since this type of menace was highlighted. At initial stage we need to share our prosperity, even if it is not too big, with the bottom 10% who get cursed from the top, indirectly.

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