Wednesday, February 11, 2015

Income and Inequality: Update to 2013

Back in 2011 I presented here graphics on Household Income (Average and Median) and on Income Inequality (as measured by the Gini Index). Herewith an update of those graphics.

The data in this chart are in 2013 constant dollars and obtained from this BLS facility (Table H-6, All Races). Median here means that half of all households earn less, half earn more—therefore it is the income at the precise middle of the total earnings range. Note how close average and median are to one another in 1975 ($7,800) and how that difference has grown by 2013 ($20,702)—and this in constant dollars, thus in actual purchasing power. The difference is accounted for by growing income inequality, which brings us to the next chart.

In this graphic I reproduce the Gini Coefficient which measures inequality. A Gini Index of 0.0 means absolute equality of all incomes. Therefore the higher the value the greater the inequality. The data for this graphic are from this BLS facility; select Income Inequality and then Table H-4. Posts on how the Gini is calculated will be put up here in due time; they were on the old LaMarotte which is no longer accessible.

Worth noting here is that the Great Recession affected Inequality only briefly, by causing it to drop somewhat between 2007 and 2008—significant numbers of the very rich lost income in the housing crash. The Gini has grown since although, in the 2011 to 2013 period, it has shown signs of lessening. I’ll revisit this picture a year or so later when new data are published. For the time being, the rich are getting richer…. So what else is new?

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