Where Has All the Money Gone?

The US as a whole keeps get­ting richer, but the growth isn’t reach­ing the mid­dle class. “The Great Decou­pling” (via):

Sec­ond,… A key dif­fer­ence between the WW2-​​1973 period and the decades since then is that median income growth has become decou­pled from eco­nomic growth. (Mark Thoma makes this point too.) The rate of eco­nomic growth has been lower in the recent era, but it’s nev­er­the­less been decent. Yet median income growth has been very slow. This con­trasts sharply with the prior period.

Here’s the big pic­ture, along with another famil­iar chart:

And another:

They all break down some­time in the mid-​​seventies, shift­ing more and more income to the rich and the finan­cial sys­tem and away from the work­ing mid­dle class.

2 February 2011 – 10:03 pm | By Benjamin Daniels | Posted in Economics | Tagged , , , , | Comments (191)