People and Their Money - Income: The Richest Get Richer, Income Trends: Then And Now, The Income Gap Between Rich And Poor

In this chapter we attempt to describe the complicated subject of income in 11 panels. The first three look at household income, examining how each fifth of households has fared during the last 30 years. The first panel deals with share of income — and we see that while the richest fifth or quintile has gained in share of the wealth, the other groups have all seen their shares erode. We offer some explanations for this shift. In the second panel we look at this 30-year period in two halves, from 1967 to 1983 and from 1984 to 2000, and also peek at the performance of the top 5% of all households. In the third panel we look at the gap between the richest and the poorest.

In the next two panels we examine how the races and ethnicities have done. All have gained in income. The wealthiest groups are Asians and Pacific Islanders. Men continue to earn more than women, and the gap between their incomes is greater, in constant dollars, in 2000 than it was in 1967 — but in the intervening period, the gap grew much larger during the troubled 1970s.

Next we look at income brackets and the number of households that fit into each. We note that while households with lower incomes have declined in number, those with higher incomes have increased. The largest income bracket is made up of households earning between $50,000 and $74,999 a year. A panel is provided to let you discover how your own household fared in the years 1990 to 2000.

We turn next to the lower income groups in the U.S. and look at poverty. In 2000 about 8.6% of all families were poor — but only 4.7% of families were made up of married couples. Poverty rates increase following economic peaks and persist into the periods of recovery after recessions end. We look next at the minimum wage and note that it has not been keeping up with inflation. We next characterize poor families and note that families headed by women, raising children under 18, are the most likely to be poor. Nearly quarters of such families live in poverty.

The final panel shows how educational attainment affects the incomes of men, women, and families. We note again that men persistently make more money than women irrespective of education — and that it takes two, these days, to bring home the bacon.