Causes of income inequality in the US?

Question

I read an article in BusinessWeek that talked about income inequality in the US.The article attributed the difference to the Intel chip that came in 1971. Since that time big hi-tech companies have grown in US, which caused income growth among wealthy people and also didn't lead to a relatively large growth in jobs because a lot of work was outsourced to places like China.To what extent is this explanation valid in the US... or is it insignificant in accounting for the income differences between the rich and the poor?

Answer 1

This is a fascinating topic.

You have to distinguish between income inequality and wealth inequality.

Income inequality has increased in the US, as measured by the Gini Index.

There are several studies that explain the reasons of income inequality. I suggest that you visit the following websites:

* Pew Center: https://www.pewresearch.org/topics/income-inequality/

* Center on Budget and Policy Priorities: https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality

* US Census Bureau: https://www.census.gov/topics/income-poverty/income-inequality.html

* OECD: https://data.oecd.org/inequality/income-inequality.htm

If you do not want to read, watch these two videos:

- Income Inequality: https://www.cnbc.com/2019/06/05/5-reasons-income-inequality-has-become-a-major-political-issue.html

- Wealth Inequality: https://youtu.be/QPKKQnijnsM

Rod