The Importance Of Inequality In The United States

Normally it’s during the economic expansion that follows a recession that workers make wage gains which hopefully leave them better off than before the recession started. But examining trends throughout economic recoveries in the postwar era demonstrates a startling pattern in which the top 1 percent is capturing a larger and larger fraction of the income growth. Between 1949 and 2012 there have been 10 economic expansions, with four occurring since 1979.

From 1979 to 2007, real inflation-adjusted, average household income, measured after government transfers and federal taxes, grew by 62 percent. During that period, the evolution of the nation’s economy and the tax and spending policies of the federal government and state and local governments had varying effects on households at different points in the income distribution: Income after transfers and federal taxes

It also matters over time, if inequality at one point in time affects inequality in the next generation (Corak, M. 2013). This raises the issue of equality of opportunity, or social mobility. The most common measure of inequality of opportunity is the intergenerational association of income, earnings, class, or other resources. Recent research provides more detail on barriers to mobility in the United States and other industrialized countries. Using methods such as analysis of mobility matrices, quantile regression, and nonparametric approaches, these studies show that a single summary measure may conceal variation in mobility patterns across the bivariate income distribution. Research on the association between income and a set of parental advantage measures shows that between 1970 and 1990 there was growing mobility for women and stability for men. However, income gaps across social origins widened among men and remained constant among women, driven by growing cross-sectional inequality over the past two