People and Their Money - Income Trends: Then And Now

In this graphic, we display growth in household income divided into two periods of roughly equal length: 1967 to 1983 and 1984 to 2000. Results for five population segments of the U.S. are shown as well as the top 5% of households, which are included in the Top 20% category.

In the early part of this 33-year period, the income of the lowest fifth of households grew at a rate just slightly greater than that of the top fifth. In the second half of the period, the lowest fifth saw income growth shy of 15% and the top fifth income growth of nearly 45%.

In the early period, policies of income distribution clearly favored the lowest reaches of society, did not reach the "working poor" which may be represented by the second fifth of households, and held down the growth in income of the very wealthiest 5% of households by high rates of taxation; the top rate in the 1965-1981 period rose to 70% and fell to 50% in 1981.

In the second half of this period, those with more grew more wealthy, and the richer the faster. Income growth of the richest 5% of households went from 10.2% in the 1967-1983 period to an astounding 73.9% in the 1984-2000 period. Average income moved up for all groups in constant, inflation-adjusted dollars, but it leaped for those who were making the most.

Four recessions marked the 1967-1983 period. This period included the darkest days of the Vietnam war, the resignation of a president, an Arab oil embargo, and the Iranian hostage crisis. The 1980s began with the election of Ronald Reagan, brought to power by a resurgence of conservative inclinations. The Berlin Wall fell. The 1980s are now remembered as the years of the "Me Generation" and by phrases like "Greed is good." Children were playing Pac Man as the new computer age dawned; "Apple" no longer simply meant a fruit. This period then rapidly morphed into the age of the Internet. The 1983-2000 period saw a single brief recession (1990-1991); but after that not even a small cloud troubled the bright economic sky.

With the beginning of the 21st century, and the events of September 11, 2001, it is anybody's guess if the "Age of Greed" is with us for the long haul — or if these interestingly uneven patterns of income growth and share are a temporary phenomenon — to be replaced by a more even distribution of income in decades to come.

Source: U.S. Bureau of the Census, Current Population Survey, March issues, "Share of Aggregate Income Received by Each Fifth and Top 5 Percent of Households (All Races): 1967 to 2000," March 21, 2000.