Chart of the Day: Middle Class Incomes vs. the Rich, 1946-2014

I’m pretty sure I’ve posted a chart like this one before, but no matter. This one is better. It’s from David Leonhardt, and it shows income growth for various income levels over two periods of recent history:

As we all know, incomes of the working and middle classes rose steadily in the decades after World War II. Then, in the mid-70s, their income growth suddenly slowed down. Finally, after 2000, their income growth went from sluggish to completely stagnant. Between 2000 and 2014, median household incomes didn’t increase by a single penny.

There are several reasons we had such robust middle-class income growth in the 50s, 60s, and 70s: strong unions, cultural norms about executive pay, catchup growth from the Great Depression, Democratic control of Congress, weak international competition, financial repression, and so forth. As those things disintegrated in the late 70s and 80s, the rich were able to siphon off bigger and bigger shares of economic growth. And they did.

That’s a familiar story. But this chart illustrates two other things as well:

  • In the postwar era, incomes of the working and middle classes actually grew faster than the incomes of the rich.
  • However, income growth was relatively evenly spread, ranging from about 3 percent per year for the poor to 1.5 percent per year for the rich.

That second point is easy to miss. We look at the chart, and the first thing that catches our eye about the gray line is that it’s going down. But it doesn’t go down all that much. Pretty much everyone is doing well.

In the post-1980 era, that changed dramatically. It’s not just that things turned around, it’s that the red line isn’t anywhere close to flat. The poor and working class have seen virtually no income increase at all. But the rich have seen gigantic increases, and even among the rich, the billionaires have done far better than the mere millionaires.

That dynamic started around 1980, and has grown since then. However, it’s only since 2000 that it’s spiraled out of control. That’s when middle-class incomes stagnate completely and the income growth of the rich starts to skyrocket past 3 percent. In the recent American economy, 1973 was the first watershed year and 2000 was the second watershed year. The start of the 21st century is when our economy suddenly changed and became crazy. But I still don’t think that anybody knows why.

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THE FACTS SPEAK FOR THEMSELVES.

At least we hope they will, because that’s our approach to raising the $350,000 in online donations we need right now—during our high-stakes December fundraising push.

It’s the most important month of the year for our fundraising, with upward of 15 percent of our annual online total coming in during the final week—and there’s a lot to say about why Mother Jones’ journalism, and thus hitting that big number, matters tremendously right now.

But you told us fundraising is annoying—with the gimmicks, overwrought tone, manipulative language, and sheer volume of urgent URGENT URGENT!!! content we’re all bombarded with. It sure can be.

So we’re going to try making this as un-annoying as possible. In “Let the Facts Speak for Themselves” we give it our best shot, answering three questions that most any fundraising should try to speak to: Why us, why now, why does it matter?

The upshot? Mother Jones does journalism you don’t find elsewhere: in-depth, time-intensive, ahead-of-the-curve reporting on underreported beats. We operate on razor-thin margins in an unfathomably hard news business, and can’t afford to come up short on these online goals. And given everything, reporting like ours is vital right now.

If you can afford to part with a few bucks, please support the reporting you get from Mother Jones with a much-needed year-end donation. And please do it now, while you’re thinking about it—with fewer people paying attention to the news like you are, we need everyone with us to get there.

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