Who Gets What? More on Growing Income Inequality

Speaking of inequality, see these two charts.  The first shows how unequally the income growth of the last 40 years was shared.

As you can see, the top 10% got almost two-thirds, and the top 1% received almost 40%!  The bottom forty percent of households (the two smallest slivers) got less than 4% of the added income

The next chart shows not who got what, but rather the growth rate of what each group got over the same period.   (The chart is poorly titled “Share of Natl Income when it should be “change in share of natl income.”)

Same deal.  Getting almost 40% of the income growth of the last 40 years (first chart) has caused the top 1%’s share of national income to more than double (about 110%, from eyeballing chart two).  All other groups get a smaller share than they did 40 years ago, except the next-to-the-top group, those in the top 5% – 1% position.

Now, to be fair, all of this is pre-tax; i.e., it does not take into account the affects of taxes and government transfers.  But, taxes on the people at the top have gone down during this period.  I’m not sure about the scale of government transfers, but if they haven’t gone down recently, they’re about to, as states impose massive budget cuts on the social safety net.

What caused all this?  Was it “natural” market forces, such as changes in technology and communicatuions?  Or, was it political decisions, such as those those concerned with labor organizing, trade policy, and deregulation?  Probably some of each, from what I’ve gleaned.

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