Economic Inequality

The Richest Americans Are Now Paying a Lower Tax Rate Than the Working Class

If you still happen to be wondering what’s causing the rampant wealth inequality in the United States, here’s a hint: The richest Americans are now paying a lower tax rate than the working class. The revelation is part of an analysis by University of California at Berkeley economists Emmanuel Saez and Gabriel Zucman, whose new

Income Inequality: What Do the Measures Really Tell Us?

You have probably seen the recent headlines saying that U.S. income inequality has reached a 50-year high. They are based on the Census Bureau’s latest report on Income and Poverty in the United States, published last month. The Census Bureau’s data, however, ignore taxes, as well as non-cash benefits such as Medicare. They measure inequality in a hypothetical

The Racial Wealth Gap Is Not Improving, But We Think It Is

Here's an interesting hypothetical. If you were asked to predict the magnitude of the racial wealth gap in 1963 versus 2016, what would you say? Has it improved, stayed the same, or gotten worse? This was the focus of a new article appearing in the journal Perspectives on Psychological Science. Specifically, a team of researchers led by Michael

“Just the Facts” Won’t Be Enough to Fight Income Inequality

The US Census Bureau has added another stone to the mounting pile of evidence demonstrating the degree of income inequality present in the United States. While the median household income has recovered to a level not seen for 20 years, the gap between rich and poor Americans remains disturbingly wide. The data collected as part of the

America’s Income Inequality Is Reaching a Tipping Point

Inequality is wrenching the nation’s poorest and richest households farther and farther apart, the Census Bureau reported on Thursday. The gap is now so wide that income inequality is the highest it’s been in 50 years, and the nation’s Gini index has increased to match. It’s now 0.485, an increase from 2017’s figures. To put

Income inequality highest in more than 50 years: census

Income inequality in the United States is at its highest point since data started being collected more than 50 years ago, according to Census Bureau numbers. The Gini index that measures income inequality grew significantly from 0.482 in 2017 to 0.485 in 2018, The Associated Press reported. The scale ranges from zero, exemplifying perfect equality, to one, if one

School poverty – not racial composition – limits educational opportunity

Fifty years ago, communities across America began efforts to make school districts more racially integrated, believing it would ease racial disparities in students’ educational opportunities. But new evidence shows that while racial segregation within a district is a very strong predictor of achievement gaps, school poverty – not the racial composition of schools – accounts

Researchers Say Transparency Could Help Address Income Inequality

A frustration of income inequality, at least for those under the great dividing line, is the attitude from above that somehow poor and lower-income people deserve their lot in life. There's a lack of empathy, according to Lawrence Mitchell, a professor of law who wrote about this a couple of years ago: "The working poor may

The Hard Part of Ending Inequality Is Paying for It

Buried among the storylines about global trade and political intrigue from the G7 summit last month is perhaps the most noteworthy one of all. Business for Inclusive Growth, or B4IG, a coalition of 34 multinational companies with more than 3 million employees and revenues topping $1 trillion, unveiled an initiative to tackle inequality with help from the

Median Retirement Income For Women 42% Lower Than For Men

U.S. households’ retirement difficulties are exacerbated by social inequality, according to a recent report, especially gender inequality—but improving retirement plan design could provide a partial solution. The median annual income for women aged 65 and older is 42 percent lower than that of men, according to “Closing the Retirement Income Gender Gap: The Opportunity Is

The Rich Can’t Get Richer Forever, Can They?

Inequality comes in waves. The question is when this one will break. In 1831, Alexis de Tocqueville, at the age of twenty-five, was sent by France’s Ministry of Justice to study the American penal system. He spent ten months in the United States, dutifully visiting prisons and meeting hundreds of people, including President Andrew Jackson

Is rich people’s excessive income about to strangle the economy?

There is an economic warning sign which has gone off before every recession going back to the 1960s (and only delivered one false positive). It's called a yield curve inversion — and it just happened on Wednesday. Gulp. Now, this doesn't guarantee a recession, of course. Even going back that far, we're only talking about

High levels of income inequality make the public less cooperative

In a new study led by IST Austria, researchers have investigated the effects of income inequality on the public’s willingness to cooperate and show support for public goods and services such as taxes, healthcare, and education. While too much inequality was found to be far from beneficial, the team also determined that complete income equality did not produce

Income Inequality Is The Party Spoiler As Social Security Turns 84

Social Security is celebrating its 84th birthday on August 14. The program has shown its staying power and importance for middle-class economic security over the decades. Its benefits are particularly important for workers, who face economic insecurity during their careers. And the chance of that happening has gone up in the past four decades. At the same

The Double Whammy: Housing and Income Inequality

America today faces a two-headed problem: economic inequality and housing inequality. The former has soared to heights not seen since the Gilded Age. The latter, as home prices spike in coastal superstar cities and lag in much of the country’s middle, has become a main feature of our divided, winner-take-all geography. The two phenomena are

Stanford profs: U.S. income inequality is only getting worse. Now what?

The U.S. economy hit a historic high in 2018, and today unemployment is at its lowest rate in five decades. Yet wage growth for the vast majority of Americans has stalled, and more people are struggling to afford housing, healthcare, education, and other basics. “Times are good if you are college educated and working in

Surprising gender disparity in work-life balance

The concept of work-life balance and its relation to the satisfaction that individuals and groups express regarding the quality of their lives have attracted the attention of policy makers, labor economists, and others. Life satisfaction is central to the general happiness and health of a society or nation. In a new study published in Journal

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Health equity is declining as income inequality grows, JAMA study shows

As income inequality worsens in America, the health of its less-fortunate patients continues to decline, according to a new study conducted by researchers with the Centers for Disease Control and Prevention (CDC). The study, published this month in JAMA Network Open, collected survey data from the CDC from 1993 to 2017, which included 5.5 million Americans

What Does America’s Top 5% Think About Income Inequality?

It has been said that there are three kinds of lies: lies, damned lies, and statistics. Well, there's no lying about the growing income inequality in America. In 1965, America's top 1% controlled about 10% of the nation's after-tax income. That number has now grown to over 15%. The average CEO-to-worker pay ratio has increased