Sunday, December 11, 2011

All Anyone Needs To Know About Income Maldistribution In The US

This article provides some stunning data on income growth in the US. It suggests the structural changes have been underway in the US economy for over 30 years and that those changes may be permanent. In addition to slow growth in the median wage, the number of persons living in poverty has increased dramatically. The poverty rate reached a high of 10% in 2000 but it has increased to 15%. Over 46 million Americans are living in poverty. The data also show that black and hispanic Americans have been hit much harder by these changes in the structure of the economy. Although this article is based upon data from the US census bureau, my guess is that a similar pattern exists in other western economies.

Sometimes the ideas that people have are affected by data. The writer of this article has changed his mind about how to deal with the information that he reported. He now favors redistribution strategies for dealing with structural problems that wont go away. The only income group that has benefitted from the structural changes in the economy is the top 1%. He no longer believes that market forces are producing the disparities in income that he has reported. Ii is pretty clear that the benefits from rising productivity have not been distributed as they have been in the past. They have been extracted by those at the top of the economic pyramid.

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