Populist politicians, economists and ordinary citizens have long suspected that the rich have been getting richer. What is making people sit up now is recent evidence that the richest 1 percent of American families appears to have reaped most of the gains from the prosperity of the last decade and a half.
S. Nasar. The 1980’s: A Very Good Time for the Very Rich. (1992)
Among the nation’s counties, the income gap between rich and poor in Manhattan is surpassed only by a group of 70 households near a former leper colony in Hawaii. Now an analysis of Census results shows that the gap widened in Manhattan in the 1980’s, a decade whose extremes of wealth and want inspired Tom Wolfe’s “Bonfire of the Vanities.”
S. Roberts. Gap Between Rich and Poor in New York City Grows Wider. (1994)
Inequality is rising nearly everywhere. In 1960, the richest 20 percent of the world’s population had 70 percent of the global income. By 1991 that rose to 85 percent. During the same period, the share of the poorest 20 percent fell from 2.3 to 1.7 percent.
B. Gosh. Glaring Inequality Is Growing Between and Inside Countries. (1996)
Still, the rise of America’s low-wage workers is at an early stage and must go a long way to make up for all the ground lost. Starting in the mid-1970’s, the weekly earnings of full-time adult workers in the bottom 10 percent of the wage distribution fell by nearly 20 percent, when adjusted for inflation. The improvement over the last 18 months has restored only about one and a half percentage points of that loss. In the late 1980’s, a similarly long economic expansion also began to raise low-end wages, but by much less than now. And even that modest gain was wiped out by the 1990-91 recession.
L. Uchitelle. For Now, Earnings Gap Has Stopped Widening (1997)
If this sounds a little like the creative destruction of capitalism and its discontents, it is. But Mr. Greider goes farther. New features of global capitalism, he argues, will bring unparalleled inequality and exploitation. The coming power of new computer chips makes job losses from automation look piddling. Worldwide competition drags wages in advanced nations down toward those of the poorest countries. Capital, answerable only to itself, seeks maximum returns, regardless of the dislocations its sudden flight brings or the chaos its burst speculative bubbles can shower. As poor nations race to get into the industrial game and rich ones innovate to stay ahead, the globe is flooded with chronic overproduction, sure to bring mass plant closings and unemployment. With labor unorganized or suppressed, inhuman treatment becomes routine.
M. Miller A Rising Tide… (1997)
THE trend is painfully evident in the statistics. Over the last quarter century, the incomes of millions of Americans have grown farther apart, so much so that a phrase, income inequality, has been coined to describe what has happened. Income inequality has persisted, undented so far, through the economic expansion of the 1990’s. Now social scientists are beginning to assess the damage that it inflicts on Americans — the rich as well as the much less rich — in their daily lives.
L. Uchitelle. Economics View: Even the Rich Can Suffer From Income Inequality. (1998)
If anything is a truism in American politics, it is that people do not care about income inequality. And as most such truisms eventually are, this one may be about to be contradicted.
The 1990’s will be remembered as a time of Reaganism without Reagan. In an ironic confirmation of the conservative dictum that most consequences are unplanned, President Reagan’s deliberate attempts to redistribute wealth to the rich now appear puny compared with what stock options and C.E.O. compensation have done under President Clinton.
Economists love to argue about numbers, but no study has disputed, because no study can dispute, that the boom of the past decade has widened an already large gap between rich and poor. The incomes of the best-off Americans have risen twice as fast as those of middle-class Americans, according to data from the Congressional Budget Office. The gap between the rich and the working class has grown even more. A study sponsored by the left-leaning Institute for Policy Studies in Washington showed that executives made 419 times more than factory workers in 1998, compared with 42 times more in 1980.
A. Wolfe. The New Politics of Inequality. (1999)
For 30 years the gap between the richest Americans and everyone else has been growing so much that the level of inequality is higher than in any other industrialized nation.
A. Stille. Grounded by an Income Gap (2001)
The booming late 1990’s appear to have left the middle class in the New York region and California no better off than it was a decade before, an analysis of Census Bureau data suggests. The poor got a little poorer, the rich got a lot richer and the large group in the middle emerged slightly worse off than when the decade began.
J. Scott. In 90’s Economy, Middle Class Stayed Put, Analysis Suggests (2001)
New research that updates and extends this classic work, however, turns the Kuznets curve on its head.
Income disparities seem to follow no automatic pattern. Instead, for long stretches the degree of inequality appears to result from norms and social policy, especially taxes, at least as much as from economic forces of supply and demand. In the United States, the Kuznets curve — the trend in inequality over time — is better described by a U shape than an inverted U. In Britain and France, the curve is more like an L.
The latest blow to the Kuznets curve was struck by Thomas Piketty of École des Hautes Etudes en Sciences Sociales, in Paris, and Emmanuel Saez of Harvard. In a study, ”Income Inequality in the United States, 1913-1998” (available at www.nber.org), they provide estimates of the share of total income going to top earners…
We are now living in a new Gilded Age, as extravagant as the original. Mansions have made a comeback. Back in 1999 this magazine profiled Thierry Despont, the ”eminence of excess,” an architect who specializes in designing houses for the superrich. His creations typically range from 20,000 to 60,000 square feet; houses at the upper end of his range are not much smaller than the White House. Needless to say, the armies of servants are back, too. So are the yachts. Still, even J.P. Morgan didn’t have a Gulfstream.
As the story about Despont suggests, it’s not fair to say that the fact of widening inequality in America has gone unreported. Yet glimpses of the lifestyles of the rich and tasteless don’t necessarily add up in people’s minds to a clear picture of the tectonic shifts that have taken place in the distribution of income and wealth in this country. My sense is that few people are aware of just how much the gap between the very rich and the rest has widened over a relatively short period of time.
P. Krugman. For Richer. (2002)