The New York Times recently published some original research about the relative wealth of different countries’ middle class. For the first time in history, the USA did not come out on top; we up in the Great White North did. While this is interesting, it is not what I wanted to write about.
What struck me was the angles of inclination of the bars showing changes in income levels from 1980 to 2010. There has always been income inequality, and there always will be. That is not the problem. The problem is the incredible increase in income inequality over the past 30 years, and more specifically, the rate at which income inequality is galloping ahead. Adjusted for inflation, American up to the 10th percentile are actually making less than they were in 1980. From the 10th to the 40th percentile, growth has been mediocre. From the 50th to the 95th percentiles, growth in income has been much more pronounced, with the angle of inclination getting steeper as the percentile increases.
The picture isn’t quite as dire in Canada. (You’re going to need to open the graph in a separate window to follow along. Follow the above link to the original graph, and then hover over the various grey bars to see other countries compared to the USA.)
For one thing, the bars in the Canadian graph all go from lower left to upper right. This means that we are all better off, in a relative sense, than we were in 1980. The troubling aspect for me is that the observation about the angle of inclination getting steeper as one’s income rises still holds true for Canada. Granted, the difference in angles isn’t quite as steep as it is in the US, but the contrast from the left side to the right side of the graph is striking nevertheless.