Income Inequality

Here is a chart produced by Rachel Johnson of the Brookings Institute:

This doesn’t seem to be the picture of income inequality in the U.S. that would have significant negative social and political ramifications – especially given that any actual regime is going to have the steep peak on the right in terms of one remuneration or another.

5 thoughts on “Income Inequality

  1. Mr. President, could I trouble you to dumb down your interpretation of the implications of this graph, for (say) philosophers?

  2. I can’t dumb things down for philosophers because pol scientists aren’t as smart as either philosophers or economists. We are net importers for a reason!

    Anyway…I’m basically arguing that the U.S. is relatively flat in terms of income and that the kind of income inequality that would probably have the most portent would be if we had, say, a continuously steeper line or a flat distribution until the top 25% or so and then a huge leap.

    I don’t have the time today to spin out the negative ramifications but I think we are probably more stable socially and politically without a large upper class that is very different than the rest (and yes, this chart only tracks income, not wealth, so I am talking apples and oranges to a certain extent here). But this might depend a lot on how much movement there is for families or generations of a family along the income scale. And btw, I’m not making any moral claim about such a result being unjust (that depends on how the income is achieved). Admittedly this is a lame response – but am pressed for time on a couple of projects!

  3. I hate these graphs as they tell merely what the teller wants told ……. basic Psy 101 …. okay let’s see the graph with the percentile figures for 80% of the public specified rather than simply less than $500,000

    Then how have each of those specified percentiles advanced or declined since 2000.

  4. One of the comments on another site pointed out that this is not far removed from what a classic Pareto 80/20 distribution would look like if run for four or five levels.

    It would be interesting to have similar graphs for other developed nations.

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