The US is, indeed, the Exceptional Nation: Income Dynamics in the Bottom 50%

Abstract

This paper establishes the unique and extreme dynamics of incomes in the bottom half of the US population since 1980. First, over the subsequent three decades the US bottom half had its average income decline. This occurred in no other major bloc or economy in the world. Nowhere else did the poor systematically become poorer. Second, the ratio of the average income in the US top 1% relative to that in the US bottom half rose three-fold between 1980 and 2010. Nowhere else in the world saw such a large absolute increase in this ratio; in 2010 nowhere else experienced a rich-poor average income ratio this high. Income dynamics in the US population is extreme. US experience is not representative of income trajectories elsewhere.