HEY, AMERICA: Check Out How 90% Of Us Have Gotten Shafted Over The Past 30 Years...

Income inequality is arguably the most important economic story in this country right now.

With all of America’s income gains now going to the richest 10% of Americans–and especially the richest 1%–the middle class is strapped.

And since the middle class provides most of the spending in the economy (rich people can only buy so many cars, houses, and vacations), this means that the growth of most companies has stalled.

The Economic Policy Institute has put together an amazing interactive chart that shows how this inequality has developed over the past 30 years.

Basically, the charts show that, starting in the early 1980s, a 60-year trend changed, and most of the country’s wealth gains started going to the top 10% of the population. In other words, the charts show how 90% of the country has gotten shafted over the past 30 years, and especially over the past 10.

Over the entire period, the picture looks OK (OK — not great): Average U.S. incomes grew by $38,000, adjusted for inflation. About half of these gains went to the richest 10% of the country. The other half went to the other 90%. (Click chart for larger)

Photo: Economic Policy Institute

But when we break down the last 90 years into different eras, the picture looks quite different.

Over the first three-quarters of the period, from 1917-1981, the trend was better: Average incomes rose by $26,000. The richest 10% captured 31% of that growth, and the other 90% captured 59%. (Click for larger)

Photo: Economic Policy Institute

But then we come to the last 30 years.

Over the past three decades, the picture changes — radically. From 1981-2008, average incomes grew by a healthy $12,000. But a shocking 96% of that growth went to the richest 10% of the country. Only 4% of it went to the other 90%. (Click for larger)

Photo: Economic Policy Institute

And then there’s the last 10 years…

From 1997-2008, average incomes grew by $2,700. All of these gains went to the richest 10%. The incomes of the other 90% declined. (Click for larger)

Photo: Economic Policy Institute

That’s worth saying again:

In the past 30 years, 96% of the growth of average incomes in this country have gone to the richest 10% of the country. And in the past 10 years, the incomes of the other 90% have declined.

The next question, of course, is what has caused the shift of the past 30 years, as well as what can be done to reverse it. The cause is likely a number of factors, from globalization (the entry of 3 billion low-cost laborers into the workforce) to tax policy to technology. And there’s no easy and quick solution.

But you’d certainly have to be a member of the top 10% to think that the trend over the past 30 years is OK. You’d also have to be pretty short-sighted. Because if that trend continues, and if you’re in the top 10% because you own or work for a company that serves the other 90%, demand for your products will soon be going down.

SEE ALSO: Here’s How To Fix The Economy… In One Simple Chart

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