Summary of Consequences of Rising Income Inequality

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What’s behind the income disparities in the United States, which have become more pronounced in recent years? With growing globalization and the decline of US-based large-scale manufacturing, some groups have fallen behind, unleashing a wave of populism. Technology is also supplanting workers, who have less power due to the weakening of labor unions’ influence. Economists Kevin J. Lansing and Agnieszka Markiewicz analyze the real-life impacts of income inequity in this succinct report, which nonetheless packs much illuminating information. getAbstract recommends their work to policy makers, economists and anyone looking to understand the rise of popular sentiment around the world.

In this summary, you will learn

  • How US income distribution has become more skewed since 1970,
  • What forces are responsible for rising income inequality and
  • How government transfer payments have helped mitigate the impacts of growing income disparities.

About the Authors

Kevin J. Lansing is with the Federal Reserve Bank of San Francisco. Agnieszka Markiewicz is an assistant professor at Erasmus University in Rotterdam.



Income inequality in the United States has grown in recent years. As economist Thomas Piketty has pointed out, American households in the top 10% of the income distribution garnered 75% of the US economy’s income growth between 1977 and 2007. This group took a 47% share of pretax income in 2014, compared to a 32% share in 1970, and that’s not including capital gains. A look at incomes by source reveals a similar story. The share of income from capital sources, such as business profits, rents and interest income, rose to 43% in 2014 from 35% in 1970. Considering...

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