On the Evolution of Income Inequality in the United States

T he recent rise in income inequality in the United States has received considerable attention in policy debates.1 This article discusses individual income inequality trends. In doing so, we summarize results presented in existing work. As in previous studies, the article shows that income inequality has increased since the 1960s—see, for example, Dı́azGiménez et al. (2002), Eckstein and Nagypal (2004), Weinberg and Steelman (2005), and Katz, Autor, and Kearney (2007). Furthermore, our article documents periods characterized by a decline in real income for lower income groups. Figure 1 shows that between 1975 and 2002, only labor income in the top 10 percent of the income distribution (Current Population Survey March Supplement) increased more than the per-worker (total nonfarm employment, Bureau of Economic Analysis) wage and salary income (National Income and Product Account).2 In particular, while during this period per-worker labor income increased 32 percent, labor income in the 10th percentile of the income distribution increased only 5 percent. In addition, Figure 1 shows