U.S. income inequality, on rise for decades, is now highest since 1928

BY DREW DESILVER - Dec 5 2013



President Obama took on a topic yesterday that most Americans don’t like to talk about much: inequality. There are a lot of ways to measure economic inequality (and we’ll be discussing more on Fact Tank), but one basic approach is to look at how much income flows to groups at different steps on the economic ladder.

Emmanuel Saez, an economics professor at UC-Berkeley, has been doing just that for years. And according to his research, U.S. income inequality has been increasing steadily since the 1970s, and now has reached levels not seen since 1928. (The GIF file at the top of this post, created by Dorsey Shaw of Buzzfeed, compares growth in average income of the top 1% of Americans with everyone else.)

Using tax-return data from the IRS, Saez has built extensive income-distribution datasets going back 100 years. He defines “income” as pre-tax cash market income — wages and salaries; dividends, interest, rent and other returns on invested capital; business profits; and realized capital gains. He excludes Social Security payments, unemployment benefits and other government transfer payments, which are more substantial today than before the Great Depression....

Read more:
http://www.pewresearch.org/fact-tank/2013/12/05/u-s-income-inequality-on-rise-for-decades-is-now-highest-since-1928/