Has Income Inequality Increased in the U.S. Over the Past 50 Years?

Has Income Inequality Increased in the U.S. Over the Past 50 Years?.

Introduction to the Issue. Income inequality has increased over the past 50 years. • Growing gap between top earners and others • Wealth increasingly concentrated • Wages for most workers have stagnated.

Evidence from CBPP. • Top 1% income has grown much faster than bottom 90% • Taxes and transfers reduce inequality but don’t reverse trend • Gini coefficient has risen since the 1970s.

Recent Data from PGPF. • Top 10% owns majority of wealth • Slow wage growth for middle/lower earners • Economic gains concentrated at the top.

Pew Research Findings. • Wealth gap at highest point in 30 years • Middle class shrinking • Upward mobility decreasing.

Why Rising Inequality Is a Problem (Brookings). • Reduces economic mobility • Increases political/social instability • Slows economic growth • U.S. inequality higher than other wealthy nations.

Economic Theory: Aggregate Demand & Business Cycle.

Economic Theory: Opportunity Cost, Unemployment & Inflation.

Economic Theory: Supply and Demand. • Low wages reduce supply of skilled labor • Weak demand slows business growth • Creates long-term productivity challenges.

Policy Solution: Expand the EITC. • Raises income for working families • Encourages employment • Boosts consumer spending • Reduces child poverty.

Additional Policy Options. • Raise minimum wage • Education & job training • Progressive tax reform • Child tax credits • Universal Basic Income (UBI).

Conclusion. • Inequality has increased significantly • It harms economic growth & opportunity • Policies can reduce inequality • EITC is a strong solution.

References (APA). Center on Budget and Policy Priorities. (n.d.). A guide to statistics on historical trends in income inequality. https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality Qureshi, Z. (2023). Rising inequality: A major issue of our time. The Brookings Institution. https://www.brookings.edu/articles/rising-inequality-a-major-issue-of-our-time/ Peter G. Peterson Foundation. (2023). 5 facts about rising income inequality in the United States. https://www.pgpf.org/article/5-facts-about-rising-income-inequality-in-the-united-states Pew Research Center. (2020). 6 facts about economic inequality in the U.S. https://www.pewresearch.org/short-reads/2020/02/07/6-facts-about-economic-inequality-in-the-u-s.