Listen to some of the pundits and politicians and you would think the unequal distribution of inome and wealth is something new. The unequal distribution of wealth reflects in part the unequal distribution of individuals and their abilities and motivation within the context of the economic environment. It’s not a rigged system or a matter of fair share.
Why are some members of Congress worth multi-millions of dollars while others are in debt up to their eyeballs? Look at the individuals and their backgrounds and how they have set personal priorities. Everything about them is unequal.
Research recently completed by Dr. Peter Diamond sheds light on these issues. Diamond finds that, historically, the income share for the 10 percent of Americans with the highest pretax income was roughly 40 percent before the Great Depression started in 1929. Then, after World War II, their share fell steadily to less than 35 percent and stood stagnant for at least two decades. It wasn’t until the 1970s, with the acceleration of globalization and deregulation and the increased dominance of fields such as high technology and finance, that wealthier individuals’ income share started to climb quickly to reach about 48 percent by 2010.
The same types of trends hold on wealth distribution. At the beginning of the 20th century, the top 10 percent richest holders of assets owned up to 80 percent of all wealth in the United States. When the Great Depression struck, that share went down to about 68 percent. Then, by 2013, the share had risen above 70 percent. Recently, it has climbing slowly and steadily.