Income Inequality and Economic Mobility

Income Inequality and Economic Mobility

Elise Gould, Senior Economist
Economic Policy Institute

Washington Internship Institute
Tuesday, September 12, 2017

Economic inequality

Average annual family income growth, by income group, 1947–2015

1947-1979 1979-2007 2007-2015
Lowest fifth 2.52% 0.02% -0.48%
Second fifth 2.21% 0.37% -0.50%
Third fifth 2.39% 0.59% -0.30%
Fourth fifth 2.43% 0.89% -0.09%
80th-95th percentile 2.36% 1.17% -0.11%
Top 5 percent 1.86% 1.99% 0.41%
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Note: Data are for money income. Because of a redesign in the CPS ASEC income questions in 2013, we imputed the historical series using the ratio of the old and new method in 2013.

Source: EPI analysis of Current Population Survey Annual Social and Economic Supplement Historical Income Tables (Table F-3)

Updated from: Figure 2C in The State of Working America, 12th Edition (Mishel et al. 2012), an Economic Policy Institute book published by Cornell University Press in 2012

Change in real annual household income, by income group, 1979–2013

Bottom 90 percent 91st-99th percentile Top 1 percent
1979 0.0% 0.0% 0.0%
1980 -3.0% -3.0% -4.8%
1981 -3.4% -3.9% -5.5%
1982 -4.4% -4.6% -1.0%
1983 -5.0% -1.9% 8.6%
1984 -0.6% 5.6% 19.9%
1985 0.0% 6.2% 28.2%
1986 3.4% 14.3% 68.2%
1987 3.6% 14.5% 35.9%
1988 5.4% 17.9% 70.5%
1989 7.1% 20.1% 59.0%
1990 7.1% 16.7% 52.7%
1991 5.8% 14.7% 36.6%
1992 6.9% 18.2% 55.0%
1993 8.1% 18.7% 48.9%
1994 9.4% 20.8% 53.3%
1995 12.3% 26.0% 70.7%
1996 13.7% 30.3% 87.5%
1997 15.8% 36.5% 115.4%
1998 19.5% 42.2% 142.9%
1999 22.4% 48.1% 162.9%
2000 22.2% 51.7% 186.7%
2001 21.9% 43.3% 126.4%
2002 19.1% 39.4% 100.5%
2003 19.6% 42.5% 112.5%
2004 23.4% 49.3% 153.3%
2005 25.4% 57.4% 205.2%
2006 27.6% 61.2% 229.1%
2007 30.0758101551046% 66.2001647952772% 244.12435417348%
2008 25.5% 55.2% 178.3%
2009 24.7% 48.6% 118.4%
2010 24.8% 52.6% 153.0%
2011 23.3% 53.2% 149.1%
2012 23.6% 58.4% 207.0%
2013 25.6%  61.1%  159.6% 
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Note: Data are for comprehensive income.  Shaded areas denote recessions.

Source: Authors' analysis of data from the Congressional Budget Office (2014)

Workers produced much more, but typical workers' pay lagged far behind: Disconnect between productivity and typical worker's compensation, 1948–2016

Year Hourly compensation Productivity
1948  0.00% 0.00%
1949 6.25% 1.55%
1950 10.48% 9.33%
1951 11.76% 12.35%
1952 15.04% 15.63%
1953 20.85% 19.55%
1954 23.52% 21.56%
1955 28.74% 26.46%
1956 33.95% 26.66%
1957 37.14% 30.09%
1958 38.16% 32.78%
1959 42.55% 37.64%
1960 45.50% 40.05%
1961 47.99% 44.36%
1962 52.48% 49.79%
1963 55.03% 55.01%
1964 58.51% 59.99%
1965 62.47% 64.94%
1966 64.90% 70.00%
1967 66.90% 72.05%
1968 70.74% 77.16%
1969 74.67% 77.88%
1970 76.61% 80.37%
1971 82.02% 87.10%
1972 91.25% 92.05%
1973  91.31% 96.75%
1974 86.98% 93.66%
1975 86.86% 97.92%
1976 89.68% 103.44%
1977 93.15% 105.79%
1978 95.98% 107.79%
1979 93.45% 108.14%
1980 88.59% 106.57%
1981 87.61% 111.02%
1982 87.79% 107.88%
1983 88.37% 114.13%
1984 86.96% 119.73%
1985 86.33% 123.43%
1986 87.34% 127.99%
1987 84.62% 129.12%
1988 83.87% 131.78%
1989 83.72% 133.65%
1990 82.24% 136.98%
1991 81.90% 138.89%
1992 83.07% 147.56%
1993 83.41% 148.37%
1994 83.84% 150.75%
1995 82.73% 150.86%
1996 82.81% 156.92%
1997 84.82% 160.50%
1998 89.19% 165.71%
1999 91.94% 172.08%
2000 92.92% 178.50%
2001 95.59% 182.84%
2002 99.40% 190.72%
2003 101.66% 200.17%
2004 100.87% 208.21%
2005 100.07% 213.58%
2006 100.24% 215.48%
2007 101.73% 217.70%
2008 101.74% 218.24%
2009 109.72% 224.75%
2010 111.56% 234.28%
2011 109.09% 234.67%
2012 107.30% 236.51%
2013 108.34% 237.57%
2014 109.22% 239.30%
2015 112.81% 241.08%
2016 115.14%  241.76% 
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Note: Data are for compensation (wages and benefits) of production/nonsupervisory workers in the private sector and net productivity of the total economy. "Net productivity" is the growth of output of goods and services less depreciation per hour worked.

Source: EPI analysis of Bureau of Labor Statistics and Bureau of Economic Analysis data

Updated from Figure A in Raising America’s Pay: Why It’s Our Central Economic Policy Challenge

Source: EPI analysis of unpublished Total Economy Productivity data from Bureau of Labor Statistics (BLS) Labor Productivity and Costs program, wage data from the BLS Current Employment Statistics, BLS Employment Cost Trends, BLS Consumer Price Index, and Bureau of Economic Analysis National Income and Product Accounts

Updated from: Figure A in Raising America’s Pay: Why It’s Our Central Economic Policy Challenge, by Josh Bivens, Elise Gould, Lawrence Mishel, and Heidi Shierholz, Economic Policy Institute, 2014.

Cumulative percent change in real annual wages, by wage group, 1979–2015

Year Bottom 90% 90th–95th 95th–99th Top 1% Average
1979 0.0% 0.0% 0.0% 0.0% 0.0%
1980 -2.2% -1.3% -0.2% 3.4% -1.4%
1981 -2.6% -1.1% -0.1% 3.1% -1.7%
1982 -3.9% -0.9% 2.2% 9.5% -1.9%
1983 -3.7% 0.7% 3.6% 13.6% -1.1%
1984 -1.8% 2.5% 6.0% 20.7% 1.2%
1985 -1.0% 4.0% 8.1% 23.0% 2.4%
1986 1.1% 6.4% 12.5% 32.6% 5.3%
1987 2.1% 7.4% 15.0% 53.5% 7.9%
1988 2.2% 8.2% 18.4% 68.7% 9.7%
1989 1.8% 8.1% 18.2% 63.3% 9.0%
1990 1.1% 7.1% 16.5% 64.8% 8.3%
1991 0.0% 6.9% 15.5% 53.6% 6.5%
1992 1.5% 9.0% 19.2% 74.3% 9.8%
1993 0.9% 9.2% 20.6% 67.9% 9.1%
1994 2.0% 11.2% 21.0% 63.4% 9.8%
1995 2.8% 12.2% 24.1% 70.2% 11.3%
1996 4.1% 13.6% 27.0% 79.0% 13.3%
1997 7.0% 16.9% 32.3% 100.6% 17.9%
1998 11.0% 21.3% 38.2% 113.1% 22.8%
1999 13.2% 25.0% 42.9% 129.7% 26.5%
2000 15.3% 26.8% 48.0% 144.8% 29.9%
2001 15.7% 29.0% 46.4% 130.4% 29.3%
2002 15.6% 29.0% 43.2% 109.3% 27.2%
2003 15.7% 30.3% 44.9% 113.9% 27.9%
2004 15.6% 30.8% 47.1% 127.2% 29.2%
2005 15.0% 30.8% 48.7% 135.3% 29.6%
2006 15.7% 32.5% 52.1% 143.4% 31.3%
2007 16.7% 34.1% 55.4% 156.174999145907% 33.4%
2008 16.0% 34.2% 53.8% 137.5% 31.4%
2009 16.0% 35.3% 53.5% 116.2% 29.9%
2010 15.2% 35.7% 55.7% 130.9% 30.8%
2011 14.6% 36.2% 56.9% 134.1% 30.7%
2012 14.7% 36.4% 58.4% 148.5% 32.1%
2013 15.2% 37.2% 59.5% 137.6% 31.9%
2014 16.7% 38.9% 62.6% 149.4% 34.4%
2015 20.7% 43.4% 68.3% 156.700964435763% 38.9%
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Source: EPI analysis of Kopczuk, Saez, and Song (2010, Table A3) and Social Security Administration wage statistics

Inequality comes at a cost

The U.S. middle class has faced a huge "inequality tax" in recent decades: Household income of the broad middle class, actual and projected, assuming it grew at overall average rate, 1979–2013

Year  Actual  Projected
1979  $ 61,550  $ 61,550
1980  $ 59,506  $ 59,527
1981  $ 59,157  $ 59,317
1982  $ 58,082  $ 59,213
1983  $ 57,173  $ 59,520
1984  $ 60,506  $ 62,684
1985  $ 60,492  $ 63,780
1986  $ 62,343  $ 68,523
1987  $ 61,433  $ 66,324
1988  $ 62,300  $ 69,100
1989  $ 63,164  $ 69,648
1990  $ 63,402  $ 69,136
1991  $ 62,430  $ 67,433
1992  $ 62,824  $ 69,370
1993  $ 63,483  $ 69,654
1994  $ 64,001  $ 70,576
1995  $ 66,000  $ 73,309
1996  $ 66,706  $ 75,677
1997  $ 67,795  $ 78,567
1998  $ 70,031  $ 82,290
1999  $ 71,814  $ 85,759
2000  $ 71,697    $ 86,986
2001  $ 71,770  $ 82,500
2002  $ 70,123  $ 79,095
2003  $ 70,210  $ 80,289
2004  $ 72,569  $ 85,040
2005  $ 73,757  $ 89,278
2006  $ 74,463  $ 91,847
2007  $ 76,402  $ 94,239
2008  $ 73,541  $ 86,863
2009  $ 72,693  $ 82,429
2010  $ 72,829  $ 84,614
2011  $ 72,079  $ 83,608
2012  $ 72,011  $ 87,419
2013  $ 73,535  $ 86,215
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Note: Data show average income of households in the 20th–80th percentile.

Source: EPI analysis of data from the Congressional Budget Office (2016). Reproduced from Figure I in Raising America’s Pay: Why It’s Our Central Economic Policy Challenge.

Source: EPI analysis of data from The Distribution of Household Income and Federal Taxes, 2011, the Congressional Budget Office, 2014.

Reproduced from Figure I in Raising America’s Pay: Why It’s Our Central Economic Policy Challenge, by Josh Bivens, Elise Gould, Lawrence Mishel, and Heidi Shierholz, Economic Policy Institute, 2014.

Poverty rate, actual and simulated supplemental poverty measure, 1967–2015

Year Actual poverty rate (Supplemental Poverty Measure, anchored 2015) Simulated poverty rate* (predicted SPM)
1967 24.4% 24.1%
1968 22.4% 23.2%
1969 21.0% 22.6%
1970 21.0% 22.9%
1971 21.0% 22.4%
1972 19.4% 21.3%
1973 18.2% 20.0%
1974 19.2% 20.4%
1975 18.4% 20.7%
1976 17.7% 19.6%
1977 17.6% 18.5%
1978 17.0% 17.2%
1979 16.8% 16.6%
1980 18.2% 17.0%
1981 19.4% 16.6%
1982 20.4% 17.5%
1983 20.9% 16.4%
1984 19.8% 14.4%
1985 19.6% 13.3%
1986 19.0% 12.4%
1987 17.8% 11.5%
1988 17.7% 10.4%
1989 17.4% 9.4%
1990 17.9% 9.1%
1991 18.5% 9.7%
1992 18.6% 9.0%
1993 19.7% 8.4%
1994 18.2% 7.3%
1995 16.6% 6.8%
1996 16.5% 5.8%
1997 15.7% 4.4%
1998 14.8% 3.1%
1999 14.1% 1.6%
2000 13.6% 0.5%
2001 14.0% 0.6%
2002 14.3% 0.3% 
2003 14.4% -0.4%
2004 14.2% -1.7%
2005 14.0% -2.8%
2006 14.1% -3.8%
2007 14.3% -4.4%
2008 14.1%
2009 14.2%
2010 14.8%
2011 15.1%
2012 15.6%
2013 15.6%
2014 15.9%
2015 14.2% 
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* Predicted SPM, or the simulated poverty rate based on the Supplemental Poverty Measure, is based on a model of the statistical relationship between growth in per capita GDP and poverty that prevailed between 1967 and 1979.

Source: EPI analysis of Current Population Survey Annual Social and Economic Supplement data, Wimer, Fox, Garfinkel, Kaushal, and Waldfogel (2013), and Bureau of Economic Analysis National Income Product Accounts public data. Analysis using Danziger and Gottschalk (1995). Anchored 2015 SPM provided by Wimer, Fox, Garfinkel, Kaushal, and Waldfogel.

  

Life expectancy for male Social Security-covered workers (age 60) by earnings group, 1972–2001

1972 2001
Bottom half of earnings distribution 77.7 79.6
Top half of earnings distribution 78.9 85.4
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Source: EPI analysis of Waldron (2007).

 

Economic mobility

Probability that sons of fathers in the bottom 20 percent of the earnings distribution end up in the bottom or top 40 percent as adults, by country

Low-earning father, son in bottom 40 percent Low-earning father, son in top 40 percent
United States 66.7% 18.1%
United Kingdom 53.8% 29.6%
Norway 51.6% 27.8%
Finland 51.2% 28.5%
Sweden 50.1% 28.5%
Denmark 47.3% 33.3%
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Source: Authors' analysis of Jantti et al. (2006)

American sons of top-earning fathers are more likely to remain in the top decile than Canadian sons: Earnings decile of sons born to top-decile fathers

United States Canada
Bottom 3.0% 8.4%
2nd 8.0% 7.8%
3rd 6.0% 7.6%
4th 7.0% 7.5%
5th 7.0% 8.2%
6th 5.0% 8.7%
7th 10.0% 9.6%
8th 16.0% 11.2%
9th 11.0% 13.2%
Top 26.0% 18.0%
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Source: Corak (2009), figure 2, page 8; Corak and Heisz (1999), Table 6, page 520; Mazumder (2005b), Table 2.2, page 93.

American sons of bottom-earning fathers are also more likely to have low earnings than their Canadian counterparts: Earnings decile of sons born to bottom-decile fathers

United States Canada
Bottom 22.0% 15.8%
2nd 18.0% 13.7%
3rd 10.0% 11.7%
4th 10.0% 11.0%
5th 11.0% 9.7%
6th 11.0% 8.7%
7th 5.0% 8.3%
8th 5.0% 7.4%
9th 2.0% 7.0%
Top 7.0% 6.9%
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Source: Corak (2009), figure 2, page 8; Corak and Heisz (1999), Table 6, page 520; Mazumder (2005b), Table 2.2, page 93.

Economic mobility and education

Higher-income families spend more on children's enrichment activities: Per-child expenditures on enrichment activities, 1973–2006

Top income quintile Bottom income quintile
1973 $3,536  $835 
1984 $5,650  $1,264 
1995 $6,975  $1,173 
2006 $8,872  $1,315 
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Note: "Enrichment expenditures" refers to the amount of money families spend per child on books, computers, high-quality child care, summer camps, private schooling, and other things that promote their children's capabilities.

Source: Adapted from Duncan and Murnane (2011)

Share of students completing college, by socioeconomic status and eighth-grade test scores

Low socioeconomic status (bottom fourth) Middle socioeconomic status (middle half) High socioeconomic status (top fourth)
Low score 2.9% 6.7% 30.3%
Middle score 8.0% 21.3% 51.2%
High score 28.8% 46.6% 74.1%
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Note: Socioeconomic status is measured by a composite score that includes family income, parental education, and parental occupation.

Source: Authors' analysis of Fox, Connolly, and Snyder (2005, Table 21)

Elasticities between parental income and sons' earnings, 1950–2000

Year Intergenerational elasticities
1950 0.40
1960 0.35
1970 0.34
1980 0.32
1990 0.46
2000 0.58
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Note: The higher the intergenerational elasticity (IGE), the lower the extent of mobility. The IGEs shown are for 40- to 44-year-old sons.

Source: Authors' analysis of Aaronson and Mazumder (2007, Table 1)

Share of 25-year-olds from each family income fourth without a college degree, by birth cohort

1961-1964 birth cohort 1979-1982 birth cohort
Bottom 95% 91%
Second 86% 79%
Third 83% 68%
Top 64% 46%
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Note: Family income fourths are those of 25-year-olds when they were children.

Source: Authors' analysis of Bailey and Dynarski (2011, Figure 3)

Intergenerational mobility and income inequality in 22 countries

Country Intergenerational earnings elasticity Gini coefficient
Argentina 0.49 0.458
Australia 0.26 0.352
Brazil 0.58 0.539
Canada 0.19 0.326
Chile 0.52 0.523
China 0.6 0.415
Denmark 0.15 0.247
Finland 0.18 0.269
France 0.41 0.327
Germany 0.32 0.283
Italy 0.5 0.36
Japan 0.34 0.249
New Zealand 0.29 0.362
Norway 0.17 0.258
Pakistan 0.46 0.327
Peru 0.67 0.48
Singapore 0.44 0.425
Spain 0.4 0.347
Sweden 0.27 0.25
Switzerland 0.46 0.337
United Kingdom 0.5 0.36
United States 0.47 0.408
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Note: The higher the Gini coefficient, the higher the inequality. The higher the intergenerational earnings elasticity, the lower the extent of mobility.

Source: Authors' adaptation of Corak (2012, Figure 2)

What can be done?

Pursue full employment

Strengthen labor standards

Restrain top 1% growth

Pursue full employment

Effect on hourly wage growth of 1 percentage-point decline in unemployment, by wage percentile and gender

Men Women
10th percentile* 1.86%  1.44%
50th percentile* 1.14%  0.92%
95th percentile** 0.39% 0.67%
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* Estimates for men and women are not statistically significantly different.
** Estimates for men are not statistically significant.

Note: Regression of hourly wages changes on contemporaneous unemployment rate, lagged value of productivity growth, time-period dummy variables, and lagged value of inflation.

Source: EPI analysis based on method described in Lawrence Mishel, Josh Bivens, Elise Gould, and Heidi Shierholz, The State of Working America, an Economic Policy Institute book published in 2012 by Cornell University Press

Strengthen labor standards

The federal minimum wage would be much higher if it had kept up with a growing economy

Actual minimum wage (2017$) Minimum wage if it had grown with average wages Minimum wage if it had grown with productivity
1938  $       3.80
1939  $       4.63
1940  $       4.60
1941  $       4.38
1942  $       3.95
1943  $       3.72
1944  $       3.66
1945  $       4.77
1946  $       4.40
1947  $       3.85
1948  $       3.56 $5.67
1949  $       3.61 $5.75
1950  $       6.68 $5.84
1951  $       6.19 $6.29
1952  $       6.07 $6.46
1953  $       6.03 $6.65
1954  $       5.98 $6.88
1955  $       6.00 $6.99
1956  $       7.89 $7.28
1957  $       7.63 $7.29
1958  $       7.42 $7.49
1959  $       7.37 $7.64
1960  $       7.25 $7.92
1961  $       8.25 $8.06
1962  $       8.17 $8.31
1963  $       8.76 $8.62
1964  $       8.65 $8.92
1965  $       8.51 $9.21
1966  $       8.28 $9.49
1967  $       8.99 $9.78
1968  $       9.90    $                    9.90 $9.90
1969  $       9.47  $                 10.08 $9.94
1970  $       9.03  $                 10.18 $10.08
1971  $       8.66  $                 10.39 $10.46
1972  $       8.40  $                 10.85 $10.73
1973  $       7.90  $                 10.83 $10.99
1974  $       8.99  $                 10.56 $10.82
1975  $       8.71  $                 10.41 $11.06
1976  $       9.03  $                 10.54 $11.37
1977  $       8.49  $                 10.64 $11.50
1978  $       9.15  $                 10.76 $11.59
1979  $       9.15  $                 10.60 $11.61
1980  $       8.80  $                 10.30 $11.52
1981  $       8.68  $                 10.22 $11.77
1982  $       8.19  $                 10.19 $11.59
1983  $       7.85  $                 10.19 $11.94
1984  $       7.54  $                 10.13 $12.25
1985  $       7.29  $                 10.08 $12.46
1986  $       7.16  $                 10.11 $12.72
1987  $       6.93  $                 10.02 $12.78
1988  $       6.68  $                    9.98 $12.93
1989  $       6.41  $                    9.93 $13.03
1990  $       6.92  $                    9.85 $13.22
1991  $       7.47  $                    9.80 $13.30
1992  $       7.29  $                    9.79 $13.80
1993  $       7.11  $                    9.80 $13.85
1994  $       6.97  $                    9.85 $13.96
1995  $       6.80  $                    9.88 $14.02
1996  $       7.40  $                    9.95 $14.29
1997  $       7.86  $                 10.11 $14.53
1998  $       7.75  $                 10.38 $14.83
1999  $       7.59  $                 10.53 $15.22
2000  $       7.34  $                 10.59 $15.55
2001  $       7.14  $                 10.68 $15.79
2002  $       7.03  $                 10.82 $16.24
2003  $       6.87  $                 10.87 $16.77
2004  $       6.69  $                 10.80 $17.22
2005  $       6.47  $                 10.74 $17.52
2006  $       6.27  $                 10.80 $17.62
2007  $       6.92  $                 10.92 $17.74
2008  $       7.47  $                 10.92 $17.78
2009  $       8.29  $                 11.29 $18.15
2010  $       8.16  $                 11.37 $18.68
2011  $       7.91  $                 11.24 $18.71
2012  $       7.75  $                 11.18 $18.81
2013  $       7.64  $                 11.24 $18.87
2014  $       7.52  $                 11.32 $18.97
2015  $       7.51  $                 11.54 $19.07
2016  $       7.41  $                 11.68 $19.10
2017  $       7.25   $                 11.62 $19.33 
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Note: Growth in average wages measures anverage wages of production workers. Inflation measured using the CPI-U-RS and the CPI projection for 2017 from CBO (2017). Productivity is measured as total economy productivity net depreciation.

Source: EPI analysis of the Fair Labor Standards Act and amendments. Total economy productivity data from the Bureau of Labor Statistics Labor Productivity and Costs program. Average hourly wages of production nonsupervisory workers from the Bureau of Labor Statistics Current Employment Statistics.

Decline in union membership mirrors income gains of top 10%: Union membership and share of income going to the top 10 percent, 1917–2015

Year Union membership Share of income going to the top 10 percent
1917 11.0% 40.3%
1918 12.1% 39.9%
1919 14.3% 39.5%
1920 17.5% 38.1%
1921 17.6% 42.9%
1922 14.0% 42.9%
1923 11.7% 40.6%
1924 11.3% 43.3%
1925 11.0% 44.2%
1926 10.7% 44.1%
1927 10.6% 44.7%
1928 10.4% 46.1%
1929 10.1% 43.8%
1930 10.7% 43.1%
1931 11.2% 44.4%
1932 11.3% 46.3%
1933 9.5% 45.0%
1934 9.8% 45.2%
1935 10.8% 43.4%
1936 11.1% 44.8%
1937 18.6% 43.3%
1938 23.9% 43.0%
1939 24.8% 44.6%
1940 23.5% 44.4%
1941 25.4% 41.0%
1942 24.2% 35.5%
1943 30.1% 32.7%
1944 32.5% 31.5%
1945 33.4% 32.6%
1946 31.9% 34.6%
1947 31.1% 33.0%
1948 30.5% 33.7%
1949 29.6% 33.8%
1950 30.0% 33.9%
1951 32.4% 32.8%
1952 31.5% 32.1%
1953 33.2% 31.4%
1954 32.7% 32.1%
1955 32.9% 31.8%
1956 33.2% 31.8%
1957 32.0% 31.7%
1958 31.1% 32.1%
1959 31.6% 32.0%
1960 30.7% 31.7%
1961 28.7% 31.9%
1962 29.1% 32.0%
1963 28.5% 32.0%
1964 28.5% 31.6%
1965 28.6% 31.5%
1966 28.7% 32.0%
1967 28.6% 32.0%
1968 28.7% 32.0%
1969 28.3% 31.8%
1970 27.9% 31.5%
1971 27.4% 31.8%
1972 27.5% 31.6%
1973 27.1% 31.9%
1974 26.5% 32.4%
1975 25.7% 32.6%
1976 25.7% 32.4%
1977 25.2% 32.4%
1978 24.7% 32.4%
1979 25.4% 32.3%
1980 23.6% 32.9%
1981 22.3% 32.7%
1982 21.6% 33.2%
1983 21.4% 33.7%
1984 20.5% 33.9%
1985 19.0% 34.3%
1986 18.5% 34.6%
1987 17.9% 36.5%
1988 17.6% 38.6%
1989 17.2% 38.5%
1990 16.7% 38.8%
1991 16.2% 38.4%
1992 16.2% 39.8%
1993 16.2% 39.5%
1994 16.1% 39.6%
1995 15.3% 40.5%
1996 14.9% 41.2%
1997 14.7% 41.7%
1998 14.2% 42.1%
1999 13.9% 42.7%
2000 13.5% 43.1%
2001 13.5% 42.2%
2002 13.3% 42.4%
2003 12.9% 42.8%
2004 12.5% 43.6%
2005 12.5% 44.9%
2006 12.0% 45.5%
2007 12.1% 45.7%
2008 12.4% 46.0%
2009 12.3% 45.5%
2010 11.9% 46.4%
2011 11.8% 46.6%
2012 11.2% 47.8%
2013 11.2% 46.7%
2014 11.1% 47.3%
2015 11.1% 47.8%
ChartData Download data

The data below can be saved or copied directly into Excel.

Sources: Piketty and Saez 2014, Gordon 2013, and Bureau of Labor Statistics Current Population Survey public data series

Data on union density follows the composite series found in Historical Statistics of the United States; updated to 2014 from unionstats.com. Income inequality (share of income to top 10 percent) from Piketty and Saez, “Income Inequality in the United States, 1913–1998,” Quarterly Journal of Economics vol. 118, no. 1 (2003), 1–39. Updated data for this series and other countries, is available at the Top Income Database. Updated 2016.

Restrain top 1% growth

CEO-to-worker compensation ratio, 1965–2016

Year CEO-to-worker compensation ratio based on options realized
1965 20.2
1966 21.3
1967 22.6
1968 23.9
1969 23.6
1970 23.3
1971 23.0
1972 22.8
1973 22.5
1974 23.8
1975 25.3
1976 26.8
1977 28.4
1978 30.1
1979 32.0
1980 34.0
1981 36.1
1982 38.4
1983 40.8
1984 43.4
1985 46.1
1986 49.0
1987 52.1
1988 55.4
1989 58.9
1990 71.3
1991 86.3
1992 104.4
1993 111.8
1994 87.3 
1995 122.6
1996 153.8
1997 233.0
1998 321.8
1999 286.7
2000 376.1
2001 214.2
2002 192.1 
2003 234.9
2004 263.1
2005 314.6
2006 344.1
2007 347.5
2008 238.3
2009 196.6 
2010 230.3
2011 232.7
2012 281.5
2013 291.8
2014 298.7
2015 286.1
2016 270.5
ChartData Download data

The data below can be saved or copied directly into Excel.

Notes: CEO annual compensation is computed using the “options realized” and “options granted” compensation series for CEOs at the top 350 U.S. firms ranked by sales. The “options realized” series includes salary, bonus, restricted stock grants, options realized, and long-term incentive payouts. The “options granted” series includes salary, bonus, restricted stock grants, options granted, and long-term incentive payouts. Projected value for 2016 is based on the change in CEO pay as measured from June 2015 to June 2016 applied to the full-year 2015 value. Projections for compensation based on options granted and options realized are calculated separately. “Typical worker” compensation is the average annual compensation of the workers in the key industries of the firms in the sample.

Source: Authors’ analysis of data from Compustat’s ExecuComp database, the Bureau of Labor Statistics’ Current Employment Statistics data series, and the Bureau of Economic Analysis NIPA tables

Source: Piketty, Saez, and Stantcheva (2012)

Source: Piketty, Saez, and Stantcheva (2012)

Source: Piketty, Saez, and Stantcheva (2012)

Thank you!

Economic Policy Institute: epi.org