America has one of the most unequal distributions of income among the developed nations. Here are the latest numbers on that trend. It’s boring stuff. Unless you consider its importance to the survival of our political order. Throughout history, extremes of income inequality have destabilized societies. Democracies might be esp vulnerable to this.
Contents
- “Poverty Rose, Median Income Declined, and Job-Based Health Insurance Continued to Weaken in 2008“, Arloc Sherman et al, Center on Budget and Policy Priorities, 10 September 2009
- Share of Aggregate Income Received by Quintile of Households, ugly numbers from the US Census
- “Changes in the Distribution of Workers’ Annual Earnings Between 1979 and 2007“, Congressional Budget Office, October 2009
- Afterword and where to go For More Information
(1) “Poverty Rose, Median Income Declined, and Job-Based Health Insurance Continued to Weaken in 2008“, Arloc Sherman et al, Center on Budget and Policy Priorities, 10 September 2009 — “Recession Likely to Expand Ranks of Poor and Uninsured in 2009 and 2010” — Excerpt:
Poverty increased, median household income fell, and the percentage of Americans with employer-based health coverage continued to decline in 2008, according to Census data for 2008 issued today.
The figures reflect the initial effects of the recession. Median household income declined 3.6% in 2008 after adjusting for inflation, the largest single-year decline on record, and reached its lowest point since 1997. The poverty rate rose to 13.2% , its highest level since 1997. The number of people in poverty hit 39.8 million, the highest level since 1960.
These data include only the early months of the recession. The figures for 2009, a year in which the economy has weakened further and unemployment has climbed substantially, will look considerably worse, and the figures will likely worsen again in 2010 if, as many economic forecasters expect, unemployment continues to rise in that year. (In the last two recessions, the unemployment rate continued rising for 15 to 19 months after the recession officially ended.)
(2) To see the rising concentration of income in America, go to this Census table: Share of Aggregate Income Received by Quintile of Households.
This looks ugle. The bottom 80% saw their share of the pie shrink during the past 40 years. No evidence that either political party made a difference.
| Year | Bottom 20% | Second fifth | Third fifth | Fourth fifth | Top 20% |
| 2008 | 3.4 | 8.6 | 14.7 | 23.3 | 50.0 |
| 1998 | 3.6 | 9.0 | 15.0 | 23.2 | 49.2 |
| 1988 | 3.8 | 9.6 | 16.0 | 24.2 | 46.3 |
| 1978 | 4.2 | 10.2 | 16.8 | 24.7 | 44.1 |
| 1967 | 4.0 | 10.8 | 17.3 | 24.2 | 43.6 |
Let’s examine this in more detail. As you see below, the bottom 80% of all households lost 6.3% of national income to the top 20%. The top 5% of households got 2/3 of that (4.2%).
| Year | Bottom 80% | Top 20% to 5% | Top 5% |
| 2008 | 50.0 | 28.5 | 21.5 |
| 1998 | 50.8 | 27.8 | 21.4 |
| 1988 | 53.6 | 28.0 | 18.4 |
| 1978 | 55.9 | 27.3 | 16.8 |
| 1967 | 56.3 | 26.4 | 17.3 |
.
(3a) “Changes in the Distribution of Workers’ Annual Earnings Between 1979 and 2007“, Congressional Budget Office, October 2009 — A graph tells the story.
Real Annual Earnings of Workers at Selected Percentiles of the Earnings Distribution, by Sex (2007 dollars)
All workers
Percentage………2007……2008…….….Change
10th Percentile…$10,800…$09,700…-10%
50th Percentile…$35,000…$33,900…-03%
90th Percentile…$85,000…$83,200…-02%
Men
10th Percentile…$014,600…$12,600…-14%
50th Percentile…$041,000…$39,700…-03%
90th Percentile…$100,000…$96,800…-03%
Women
10th Percentile…$08,000…$07,700…-04%
50th Percentile…$30,000…$29,000…-03%
90th Percentile…$68,000…$66,800…-02%
Everyone (in aggregate) in the bottom 90% of income lost ground. Men in the bottom 10% of income lost far more than everybody else. While there were many factors at work, the massive flow of unskilled male immigrants must have played a major role.
(4a) For more information from the FM site
To read other articles about these things, see the following:
Reference pages about other topics appear on the right side menu bar, including About the FM website page.
Other posts on the FM webstite about this topic:
- A sad picture of America, but important for us to understand, 3 November 2008
- America’s elites reluctantly impose a client-patron system, 5 November 2008
- Inequality in the USA, 7 January 2009
(4b) Afterword
Please share your comments by posting below. Per the FM site’s Comment Policy, please make them brief (250 word max), civil and relevant to this post. Or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).