Currently, the top marginal tax rate for the richest Americans is 37 percent, while the top rate for long-term capital gains is just 20 percent. Rising economic inequality in the United States has become a central issue in the race for the Democratic presidential nomination, and discussions about policy interventions that might help address it are likely to remain at the forefront in the 2020 general election. Meanwhile, the official poverty rate for all U.S. families from the Census Bureau has merely inched up and down. The top 10% of households controlled 68.2 percent of the total wealth in 1983 and 73.1% of the total wealth in 2007. Between 2009 and 2018, the bottom 90 percent had wage growth of just 6.8 percent, compared to 19.2 percent for the top 0.1 percent. To compare income inequality across countries, the OECD uses the Gini coefficient, a commonly used measure ranging from 0, or perfect equality, to 1, or complete inequality. Income inequality (or income disparity) is the degree to which total income is distributed unevenly throughout a population. Income inequality, while stark, pales in comparison to wealth inequality. But beginning in the 1970s, these levelers started to erode and the country returned to extreme levels of inequality. By contrast, Americans who are not among the ultra-rich get the vast majority of their income from wages and salaries. They are more likely to be found in poorly paid and precarious employment, supporting the market economy with cheap or free labor. The more problematic issues are the extent to which discrimination is in fact a significant source of inequality and whether such discrimination-based inequality is inherent in a capitalist system. var divElement = document.getElementById('viz1581718007881'); var vizElement = divElement.getElementsByTagName('object')[0]; vizElement.style.width='650px';vizElement.style.height='527px'; var scriptElement = document.createElement('script'); scriptElement.src = 'https://public.tableau.com/javascripts/api/viz_v1.js'; vizElement.parentNode.insertBefore(scriptElement, vizElement); Over the past five decades, the top 1 percent of American earners have nearly doubled their share of national income, according to Saez’s analysis. var divElement = document.getElementById('viz1579286341775'); var vizElement = divElement.getElementsByTagName('object')[0]; vizElement.style.width='650px';vizElement.style.height='527px'; var scriptElement = document.createElement('script'); scriptElement.src = 'https://public.tableau.com/javascripts/api/viz_v1.js'; vizElement.parentNode.insertBefore(scriptElement, vizElement); One factor in the widening income divide is the decline of U.S. labor unions. The divides become even more dramatic when viewed through a gender lens. Put simply, it’s how unevenly income is distributed across a group of people – whether it’s a town, country or continent. In the UK, the Gini coefficient rose from 30.0 to 36.8 between 1985 and 1990. For this analysis, we gathered data from the U.S. Census Bureau, Organization for Economic Cooperation and Development and the World Bank. 6Middle-class incomes have grown at a slower rate than upper-tier incomes over the past five decades, the same analysis found. Income inequality is due to many systemic factors. But upper- (27%) and middle-income Americans (26%) are more likely than those with lower incomes (17%) to say that there is about the right amount of economic inequality. But the link is by no means automatic or certain. Pew Research Center does not take policy positions. The chart above compares the change in the Gini Coefficient between 2008 and 2016 against the change from 2016 to […] Read More. While employers are technically supposed to make up the difference if workers don’t earn enough in tips to reach the $7.25 federal minimum, this rule is largely unenforced. Lower-income … 5 facts about economic inequality in 2014, 5 takeaways about the American middle class, The growing economic clout of the college educated, The many ways to measure economic inequality, How wealth inequality has changed in the U.S. since the Great Recession, by race, ethnicity and income, Intent to Get a COVID-19 Vaccine Rises to 60% as Confidence in Research and Development Process Increases, Defining generations: Where Millennials end and Generation Z begins, So far, Trump has granted clemency less frequently than any president in modern history, 5 facts about the QAnon conspiracy theories, Organization for Economic Cooperation and Development, Pew Research Center survey conducted in September 2019. According to the AFL-CIO, S&P 500 firm CEOs were paid 287 times as much as average U.S. workers in 2018. According to analysis by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, women comprise just 27 percent of the top 10 percent, and their share of higher income groups runs even smaller. During this time, the share of adults in the upper-income tier increased from 14% to 20%, and the share in the lower-income tier increased from 25% to 29%. Within the United States, income inequality is much greater than in most other developed countries. It is a major part of how we understand socioeconomic statuses, being how we identify the upper class, middle class, and working class. By 2016, the top 5% held 248 times as much wealth at the median. Income inequality is the Grim Reaper for those at the bottom. We should be paying more attention… https://t.co/g1GKfPnpYo, Inequality.org is a project of the Institute for Policy Studies, Content licensed under a Creative Commons 3.0 License, Institute on Taxation and Economic Policy. (+1) 202-857-8562 | Fax Another way of measuring inequality is to look at household wealth, also known as net worth, or the value of assets owned by a family, such as a home or a savings account, minus outstanding debt, such as a mortgage or student loan. Most inequality analysis focuses on income (the wages earned from a job or from capital gains) rather than wealth (the sum of one’s assets minus debts). It's impacted by many other … Analysts have a number of ways to define income. An estimated 41.4 percent of the total U.S. population — 135 million people — are either poor or low-income. 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