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that doesn't mean income has stalled, just that the gap is larger
ReplyDeleteif income grows for all, but more for rich, who the hell cares?
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).
DeleteFurther, 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.