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Date: 2025-07-02 Page is: DBtxt001.php txt00001660

Income, Society and Economy
Income stagnation

Income stagnation has become endemic in the USA ... the facts are clear, but what exactuly is the cause.

COMMENTARY
The two graphs shown below are very clear. There has been income stagnation for the past 10 years.

The reasons are many. The economy is a vast complex system, and the results documented on these graphs is the result of many interacting factors. These include:

  • Technology that is now enabling remote operations
  • Technology that is enabling more complex operations without worker intervention
  • Management that operates under what I refer to as the rules of the Capitalist Market Economy
  • More educated people for the global work-force
Over time, imbalances in the system result in uncontrolable instability. For a very long time both the investor community and the consumer have been able to benefit from 'easy money', but this has created a bubble which is now deflating. Demand is now contracting rather than expanding so less manufacturing is required ... a vicious cycle of lower economic activity is in play.
Peter Burgess

The Gini Coefficient for the OECD as a whole has increased in the period 1975 to 2008 ... but both the United States and the UK have had very much larger increases in the Gini Coefficient. The Gini Coefficient is a measure of income inequality. A big part of the inequality was established in the period 1980 to 1995 and has been relatively stable since then in the UK, and becoming somewhat worse in the USA from 1995 to 2005.

The following graphic shows that in the period 1947 to 1973 incomes increased substantially for all groups, with the lower incomes progressing rather faster than the higher paid groups. This changed and in the period 1979 to 2009 the lowest paid group lost ground while the highest paid group progressed ver well,

Peter Burgess
November 2011
The text being discussed is available at
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