Income inequality in the United States is high compared to other rich democratic nations, and it has risen sharply since the late 1970s. During that period, household incomes in the middle have grown slowly — much more slowly than the economy (GDP per capita or per household). It looks very likely that top-end income inequality has been a key cause of slow income growth in the middle. The two are arithmetically related, the timing fits, and the key hypothesized causal path, wages, behaves as predicted. The high and rising income share of the top 1 percent appears to have cut income growth since 1979 for the median American household roughly in half.
The full paper is here.
The United States has long been committed, more than any other rich democratic country, to the notion that employment is the key to poverty reduction. This presupposes that people in work can get enough hours at a sufficiently high wage to earn a decent income. How has this approach fared? An assessment here.
A new report (summary) documents further weakening of some elements of associational life since Robert Putnam’s Bowling Alone was published in 2000. Is big government to blame? See here.
A look at 30 outcomes from 1932 to 2016.
What should we make of the falling employment rate among prime-working-age American men over the past half century and our poor overall employment performance since 2000? I offer some answers at Foreign Affairs, here and here.
A discussion on social democracy, big government, American politics, income inequality, and more.