Skip to main content

US Income Growth Has Stalled for Most Americans


The US Census released new income data, which revealed more evidence of the widening income gap between the rich and poor, prolonging the trend of the last 40 years.

See more data here and here.

Comments

  1. that doesn't mean income has stalled, just that the gap is larger

    if income grows for all, but more for rich, who the hell cares?

    ReplyDelete
    Replies
    1. Actually median income has stagnated since the 1980s. And that's the data least affected by the increase in inequality. As posted before here(http://nakedkeynesianism.blogspot.com/2011/07/end-of-new-deal-as-we-know-it.html?q=median+income): "The average rate of growth [since 1948] until 1979, before the Volcker shock, was 2.4 per cent. Since the Reagan administration it has been 0.5 per cent." The mean household income of the lowest quintile in 2012 was $11,490, lower than the 1973 (in 2012 prices) of $11,728(see data here http://www.census.gov/hhes/www/income/data/historical/household/index.html).

      Further, inequality, contrary to what you think matters, even in situations that people at the bottom are better off. First, inequality might affect economic growth. Directly since people with lower income tend to have a higher propensity to consume, and indirectly because it reduces incentives for more investment (since demand is not growing). But inequality also has a negative impact on social relations. Leads to social conflicts which may lead for example to political paralysis, like the inability to do basic things like approve a budget, and even lead to government shut downs.

      Delete

Post a Comment

Popular posts from this blog

What is the 'Classical Dichotomy'?

A few brief comments on Brexit and the postmortem of the European Union

Another end of the world is possible
There will be a lot of postmortems for the European Union (EU) after Brexit. Many will suggest that this was a victory against the neoliberal policies of the European Union. See, for example, the first three paragraphs of Paul Mason's column here. And it is true, large contingents of working class people, that have suffered with 'free-market' economics, voted for leaving the union. The union, rightly or wrongly, has been seen as undemocratic and responsible for the economics woes of Europe.

The problem is that while it is true that the EU leaders have been part of the problem and have pursued the neoliberal policies within the framework of the union, sometimes with treaties like the Fiscal Compact, it is far from clear that Brexit and the possible demise of the union, if the fever spreads to France, Germany and other countries with their populations demanding their own referenda, will lead to the abandonment of neoliberal policies. Aust…

A brief note on Venezuela and the turn to the right in Latin America

So besides the coup in Brazil (which was all but confirmed by the last revelations, if you had any doubts), and the electoral victory of Macri in Argentina, the crisis in Venezuela is reaching a critical level, and it would not be surprising if the Maduro administration is recalled, even though right now the referendum is not scheduled yet.

The economy in Venezuela has collapsed (GDP has fallen by about 14% or so in the last two years), inflation has accelerated (to three digit levels; 450% or so according to the IMF), there are shortages of essential goods, recurrent energy blackouts, and all of these aggravated by persistent violence. Contrary to what the press suggests, these events are not new or specific to left of center governments. Similar events occurred in the late 1980s, in the infamous Caracazo, when the fall in oil prices caused an external crisis, inflation, and food shortages, which eventually, after the announcement of a neoliberal economic package that included the i…