Question

what was happened to income inequality in the last few decades?

Answer 1

• Wages, salaries, rent, profits from sale of goods and services, interest on savings, dividends etc forms Incomes.
• When the income is distributed in an uneven manner amongst the population that is referred to as the income inequality.
• In US, the gap between the richer class of the society and the other classes is increasing rapidly fro some 30 years and therefore, giving way to larger income inequality.
• Since World war II income inequalitys has been rising.
• According to an article in the The Regional Economist, the income inequality has reached the highest level since the 1920s in 2013.
• 1920s was the period when the income inequality was at its peak and then later it decreased after the Great depression wherein the top capital incomes had fallen and were unable to recover.
• Through the early 1970s Gini coefficient measured the income inequaltiy which was relatively low. This changed when the wages among the highest earners grew faster than wages for everyone else.
• 2001 and 2007-09 Resessions caused top incomes to fall deeply and the income inequality continued to rise after 1970s.
• While it is very much important to know that the growth from 2013 to 2014 was more equal, wherein the incomes of the botton 99% grew 3.3% the highest in more than 10 years.
• Top 10% now average more than nine times as much income as the bottom 90% that is the amount of income inequality now.
• Even the top level class has to face the problem of income disparity therefore it is rampant in the overall economy not sparing even the richer class of people.
• The before tax incomes of the top 1% has increased more than four times than the bottom 20% since 1979.
• Such is the income ineqality that the gap between payment to the CEO and workers of the company was eight times larger in 2016 than in 1980.
• Wages are more or less stagnant after taking into account the inflation factor for more than three decades.