A New Study Shows How Severe U.S. Inequality Is — and How Little We’re Doing About It
In 1980, the average worker on the bottom half of America’s income ladder earned about $16,000 a year (in today’s money). Over the ensuing three-and-a-half decades, the average national income in the United States grew by 61 percent. That rising tide lifted all boats so high that, by 2014, the average worker in the bottom 50 percent took home a whopping … $16,000 a year.
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Economic growth in the United States: A tale of two countries
The rise of economic inequality is one of the most hotly debated issues today in the United States and indeed in the world. Yet economists and policymakers alike face important limitations when trying to measure and understand the rise of inequality.
One major problem is the disconnect between macroeconomics and the study of economic inequality. Macroeconomics relies on national accounts data to study the growth of national income while the study of inequality relies on individual or household income, survey and tax data. Ideally all three sets of data should be consistent, but they are not. The total flow of income reported by households in survey or tax data adds up to barely 60 percent of the national income recorded in the national accounts, with this gap increasing over the past several decades.