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

[Audio] Has Income Inequality Increased in the U.S. Over the Past 50 Years? And Is It a Problem? What Policy Could Address It? By: Thomas Ndorleh Course: ECO201 Date: November 23, 2025.

[Audio] 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.

[Audio] 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.

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

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

[Audio] 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.

[Audio] Economic Theory: Aggregate Demand & Business Cycle • Low-income households spend more → boosts aggregate demand • Wealth concentration weakens demand • Inequality worsens recessions.

[Audio] Economic Theory: Opportunity Cost, Unemployment & Inflation • Lower access to education → lost economic opportunity • Higher unemployment during downturns • Wage stagnation vs inflation reduces real income.

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

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

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

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

[Audio] 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.