Causes of Income Inequality

Only Rich and Poor Getting a Larger
Share of a Much Bigger GDP Pie

1971

2012

Upper Tier Up 14% 20%

Middle Tier Down 61% 51%

Lower Tier Up 25% 29%

Total 100% 100%

Note: Real GDP pie has grown a lot so middle income is up just not as much. Depending on where the stock market is; the top can vary a lot. Remember liars, dame liars, and all data users?. Middle Class: A Candle Burning at Both Ends

Income Inequality is made important by Media and Politicians. It is based on Market Income which is Not Important.

Important stuff includes:
1) wellbeing of the bottom quarter¹
2) actions of the top 1/10 of 1%²
3) large groups working in concert
to affect income distribution.³
4) regressive nature of tax fines and
easy treatment of whit collar crime
for the example it sets

Well-Being is Most Important

1) Our society's stability has allowed U.S. productivity consistently increased which is a key to individual wellbeing. Think how the public safety net has increased since the 1930's and the success of the federal children's bureau. Who wants to give up SS and Medicare? Why do some always want to cut the other guys government benefits. Think economic distress in Russia, Europe, and even Japan and Germany.
2) Scientific achievements have continuously added to citizen well-being. Think public health, smart phones, streaming audio-video, Gillette Stadium ... See Health Problems Solved
3) Personal compensation which includes market income, fringe benefits and government transfers
4) Nature and nurture has increased continuously if not always rapidly. Think Russia, China, and Europe's really slow recovery from the Great secession.

Politics is #1

People wanting a income different distribution should vote accordingly but many voters have more important needs. For some protecting Guns and God are most important. For some voters Greed of business and retirees use political action committees like AARP to get a larger share of the pie. Government employees including politicians vote based on career possibilities. Together they make redistribution difficult.

1) Wellbeing of the bottom quarter¹

2) actions of the top 1/10 of 1%²

3) large groups working in concert to
affect income distribution.³